Gabriel v Peninsula Business Services Ltd & Anor

It is not correct that an employment contract transfers by operation of law without the employee's assent. Rather, at common law a contract of service cannot be novated to a new employer without the employee's express or implied consent. Statutory schemes such as TUPE alter that position when engaged, but they were not invoked here. Where an employee lacked notice and did not assented, the original employer remains liable and procedural grievance requirements tied to a change of employer do not bite.

The appellant was a marketing consultant who worked in a department whose trade and assets were said to transfer from the first respondent to the second respondent on 1 April 2009. The employment judge found the appellant's employment had transferred and dismissed claims against the first respondent as time‑barred under the then statutory grievance procedure. The appellant appealed that preliminary finding. The central issue was whether the employee's contract transferred without her knowledge or consent.

The Employment Appeal Tribunal considered common law authority on transfer without assent, whether any statutory regime (for example TUPE) applied, and the consequences for the applicability of the statutory grievance procedure and limitation. The question was whether the employment judge was wrong in law to find an effective transfer on 1 April 2009.

1. Outcome. The appeal is allowed and the matter is remitted to the Employment Tribunal for substantive hearing against both respondents.
2. The court applied the longstanding common law principle that a contract of service cannot be transferred from one employer to another without the employee's consent. The House of Lords decision in [1940] AC 1014 remains good law on that point and governs the present issue (see paras [10]; [13]).
3. The court considered [1955] 2 QB 437 (Denham) and concluded it is consistent with the same principle rather than permitting a novation by operation of law (see paras [11]–[12]).
4. Applying those principles to the facts found by the Employment Judge, the appellant did not receive the notification of change and gave no express or implied assent to any transfer. The appellant remained employed by the first respondent throughout the period complained of (see paras [8]; [13]–[14]).
5. As a consequence of that legal and factual conclusion, the transitional provisions in Article 3 of the Employment Act Commencement No. 1 (Transitional Provisions and Savings) Order 2008 mean the statutory grievance procedure did not apply so as to defeat the claim. The claim against the first respondent is not time‑barred and may proceed to a substantive hearing (see para [14]).
6. The Employment Judge's permission to proceed against the second respondent stands as there is no cross‑appeal on that point. Issues of joint or several liability between the respondents and the application of sections mirrored in the Sex Discrimination Act 1975 and Race Relations Act 1976 can be addressed at trial if necessary (see para [15]).
7. Remedy: the appeal is allowed and the case is remitted to the Employment Tribunal for full hearing against both respondents (see para [16]).

• Employment Appeal Tribunal: Appeal allowed and remitted to the Employment Tribunal for substantive hearing ([2012] UKEAT 190_11_2302).
• Employment Tribunal (Manchester): Preliminary Hearing before Employment Judge Vinecombe on 29–30 July 2010; written judgment promulgated 19 August 2010; reasons provided 26 August 2010. The Employment Tribunal held the claimant's employment had transferred to the second respondent and dismissed claims against the first respondent as time‑barred.