British Telecommunications Plc v Adamson & Ors

For the purpose of determining the reason for dismissal, the tribunal must identify the facts known or beliefs held by the employer which caused the dismissal. The employer’s own description of its reason, or an error of law in that description, is evidential but not conclusive.

A finding that employees were dismissed for redundancy was permissible where the transferee had concluded that its requirements for employees to perform the relevant work had ceased or diminished, even though it wrongly believed that Transfer of Undertakings (Protection of Employment) Regulations did not apply. Pension rights may be excluded from automatic transfer by regulation 10, but compensation may reflect pension terms which the tribunal finds the transferee would have honoured.

Following a service provision change from Atos Origin IT Services (UK) Ltd to British Telecommunications Plc, an Employment Tribunal held that the claimants transferred to BT under TUPE. BT did not take them into employment because it considered, incorrectly, that TUPE did not apply and that it had sufficient existing staff to perform the work.

At the remedy hearing, BT conceded automatic unfair dismissal. The Tribunal found that the effective reason for dismissal was redundancy and awarded compensation which included pension loss assessed on the basis that BT would probably have provided benefits no less favourable than those previously enjoyed. BT appealed those two findings.

1. Appeal dismissed. The Employment Tribunal was entitled to find, as a matter of fact, that redundancy was the effective reason for the dismissals.

2. Applying the approach in Abernethy v Anderson, Mott and Hay, the reason for dismissal consists of the facts known to the employer or beliefs held by it which caused the dismissal. An employer’s stated reason is evidence of the true reason, but may be inaccurate through a mistake of fact, language or law.

3. BT had concluded that the claimants were surplus to requirements and that its requirements for employees to perform work of the relevant kind had ceased or diminished. The Tribunal permissibly held that those circumstances met the definition of redundancy in section 139 of the Employment Rights Act 1996. BT’s erroneous belief that TUPE did not apply did not alter the causative reason for dismissal. Evidence from a witness who was not in post at the material time could not displace that conclusion.

4. Although pension rights did not transfer automatically by virtue of regulation 10 of the Transfer of Undertakings (Protection of Employment) Regulations, the Tribunal had evidence that BT customarily honoured the full remuneration packages of incoming transferred employees. It was entitled to find that BT would probably have provided pension terms no less favourable than those formerly enjoyed by the claimants. There was no error of law in the resulting pension-loss award.

• Employment Appeal Tribunal: BT’s appeal from the Employment Tribunal’s reserved remedy judgment, sent on 11 July 2011, was dismissed.
• Employment Tribunal: A pre-hearing review judgment, sent on 6 January 2011, held that the service provision change fell within TUPE. No appeal was brought from that judgment. The subsequent remedy judgment found redundancy and assessed pension loss.