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Chambers & Partners
26/07/2007

Unison v. MP Allen & Ors (2007)

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EAT

The appellant union (U) appealed against a decision on a preliminary issue by the employment tribunal that a number of its employees (X) had lodged their claims within time under the Equal Pay Act 1970 s.2(4). X had been employed by a union (N), which had transferred to U by way of a trade union amalgamation. X lodged claims many years after the transfer, but whilst still employed with U, and alleged that during their employment with N it had breached their pension rights under the 1970 Act. The tribunal held that the claims had been lodged in time under s.2(4) of the 1970 Act because X's employment with N and U had been the same, as their employment contracts and the pension liabilities had transferred to U as property under the Trade Union and Labour Relations (Consolidation) Act 1992 s.105

The issues to be decided were (i) whether the liabilities for the alleged breaches of pension rights had transferred from N to U; (ii) if so, whether X's employment with U was the same as that with N. X submitted that their contracts had transferred to U in their entirety as a consequence of the transfer of property and the transfer of engagements that had taken place in the course of the amalgamation between N and U and that the relevant employment was therefore that with U. U argued that neither provision included the transfer of employment contracts and that it was still the law that an employee could not be compulsorily transferred against his will. It was submitted that for the purposes of s.2(4) time began to run from the date of the transfer when the contract with the transferor was terminated.

HELD: (1) The notion that contracts of employment were an aspect of union property held by its trustees or that the concept had to be reinterpreted following the implementation of the Transfer of Undertakings (Protection of Employment) Regulations 1981 was rejected. The Regulations had not changed the fact that employees were not property. It had restricted the right of employers to refuse to accept employees on transfer but had not compelled employees to transfer against their will. The provisions of the Regulations had themselves defined the extent to which the fundamental principle, namely that a free citizen was entitled to choose his employer and that his services could not be transferred from one employer to another without his assent, had altered, Nokes v Doncaster Amalgamated Collieries Ltd (1940) AC 1014 considered. There was no basis for saying that the construction of the concept of property could have altered when the Regulations had come into force and employment contracts fell outside the definition of property. At the time the Trade Union (Amalgamations, etc.) Act 1964 was passed, it was hard to believe that Parliament had thought that it was overriding the fundamental principle. Parliament in 1964 should not be treated as having by implication interfered with what had been a common law right, Stansell Ltd (formerly Stansell (Builders) Ltd) v Co-operative Group (CWS) Ltd (2006) EWCA Civ 538, (2006) 1 WLR 1704 considered. The Regulations had achieved the preservation of employees jobs while leaving them free to refuse to transfer. The contracts of employees did not transfer merely by virtue of the merger legislation but transferred pursuant to the Regulations, which left pension obligations with the transferor. (2) In any event, employment with the transferor and employment with the transferee had to be treated as separate and distinct employments as they would have been prior to the Regulations, Powerhouse Retail Ltd v Burroughs (2006) UKHL 13, (2006) 3 All ER 193 applied. The fact that the Regulations had affected the contractual position of the parties had not affected the analysis of what amounted to employment within the meaning of s.2(4). In each case where an alleged breach had related solely to employment with transferor, the relevant employment was that with the transferor. Therefore, even X's employment contracts had transferred to U, their claims had to be brought within six months from the termination of their employment with N. In the circumstances, X's claims had been lodged out of time.

Appeal allowed

Counsel for the appellant: Michael Ford

[2007] IRLR 975 : [2008] ICR 114
TRANSFER OF UNDERTAKING,LIABILITY FOR BREACHES,PENSIONS,EQUAL PAY ACT 1970, TERMINATION

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