Khatri v The London Central Mosque Trust Ltd & Anor

An employment contract may be varied by implied agreement established through the parties’ conduct. That principle extends to the identity of the employer. Where documentary evidence is incomplete, an Employment Tribunal may determine the employer by examining the practical operation of the arrangement, including payment records, tax documents, contractual descriptions, managerial control, invoicing and the parties’ own contemporaneous understanding.

An appellate court must read Tribunal reasons fairly and realistically. Reasons need not meet High Court drafting standards. The question on appeal is whether the Tribunal made an error of law, not whether the appellate court would have reached the same factual conclusion.

The claimant began as a teacher employed by the Mosque in 1997. From February 1998 she managed a nursery. A separate nursery company was later used in connection with the nursery’s operation and public funding.

She brought claims of unfair dismissal and race and sex discrimination initially against the Nursery. She later added the Mosque, contending that it remained her employer when her employment ended in 2010. The Employment Tribunal found that the Nursery was her employer.

The claimant appealed, arguing that the Tribunal had failed to identify a legally effective change from the Mosque to the Nursery and had treated payslips and her belief about her employment as determinative.

1. Appeal dismissed. The Employment Tribunal was entitled to find that, by the termination of employment, the claimant’s employer was the Nursery rather than the Mosque.

2. The identity of an employer, like another contractual term, may be changed by an implied agreement constituted by conduct. No express discussion or written agreement changing employer was indispensable. The issue was whether the Tribunal had made an error of law, rather than whether the Appeal Tribunal would itself have reached the same conclusion.

3. The Tribunal was entitled to infer such a variation from the cumulative evidence. The claimant’s nursery payslips and P46 identified the Nursery; she was paid by it; a timesheet and draft terms described a nursery employer; and her original claim named the Nursery as employer. The Nursery invoiced parents, its directors controlled the nursery operation, and the claimant corresponded as its nursery manager.

4. The Tribunal also permissibly considered operational control and the business model. The evidence was consistent with employment by the Nursery despite its close connection with, and integration into, the Mosque’s wider activities. The overlap of personnel and some evidence of a close relationship did not compel the contrary conclusion.

5. The Appeal Tribunal applied the established approach that Tribunal reasons are to be read fairly and need only give the essential factual conclusions and reasoning. On that approach, the Tribunal’s reasons adequately supported its conclusion and disclosed no error of law.

• Employment Appeal Tribunal: dismissed the claimant’s appeal and upheld the Employment Tribunal’s conclusion that the Nursery was the employer.
• Employment Tribunal (Central London): by a decision dated 27 September 2011, determined the identity-of-employer issue in favour of the Nursery.