Dean v. Latona Luxury Ltd

Where an employer takes over a going-concern business and communicates total continuity of employment, including protection of wages and accrued holiday, that communication may constitute an offer to employ staff on their existing contractual terms. An employee may accept the offer by continuing to work. An employment tribunal must take material documentary evidence into account when determining the contractual terms. An uplift for breach of the statutory grievance procedure may apply to all relevant sums awarded. A failure to provide a compliant statement of terms will ordinarily justify the statutory award where exceptional circumstances are absent.

The claimant had worked for Wrenwell Hotels Ltd before its assets were transferred to Latona Luxury Ltd. The transfer did not operate as a transfer of employment under regulation 8 of the TUPE regulations. Latona nevertheless sent a staff announcement stating that there would be total continuity and that wages, accrued holiday and holiday arrangements would be protected.

The claimant continued working for Latona for about a year, then claimed unpaid wages based on an entitlement to triple time for bank-holiday work. The Employment Tribunal rejected that claim, having overlooked the letter, but awarded holiday pay, an uplift and two weeks’ pay for failure to provide written terms. The appeal concerned the unpaid wages and the consequential calculation of the uplift.

1. Appeal allowed in part. The Employment Tribunal had overlooked the staff announcement of 11 July 2006, which was material evidence of the contractual terms governing the claimant’s employment.
2. The announcement stated that there was total continuity in running the going-concern business and that wages and accrued holiday arrangements were fully protected and would be honoured. It did not indicate that future employment terms would be entirely different. Properly considered, it was an offer of employment on the claimant’s pre-existing terms, accepted by his continuing to work for Latona.
3. On that basis, the claimant was entitled to the unpaid bank-holiday wages. The EAT awarded £756. The existing award of £27 for holiday pay was affirmed.
4. The Employment Tribunal had found a substantial failure to deal with the claimant’s grievance. The 50 per cent uplift required by section 31 of the Employment Act 2002 therefore applied to both the unpaid wages and holiday pay, producing an uplift of £391.50.
5. The two-week award under section 38 of the Employment Act 2002 was left undisturbed. The letter did not comply with the statutory requirements and the circumstances were not exceptional. The total judgment was £1,714.50.

• Employment Tribunal: The Tribunal reviewed and revoked an earlier default judgment, awarded holiday pay, a 50 per cent uplift and two weeks’ pay, but rejected the claim for unpaid wages.
• Employment Appeal Tribunal: The appeal was allowed to the extent of awarding the unpaid wages and applying the 50 per cent uplift to them. The other awards were affirmed or left undisturbed.