Eyres v Air Vane Compressors Ltd

An Employment Tribunal must make findings on a proper evidential basis and give reasons which address material issues necessary to determine the dispute. A finding of a consensual termination and re-engagement was unsafe where the tribunal located the agreement at a meeting which neither party said produced it.

An anti-oral variation clause does not prevent parties from varying or terminating their contract orally or by conduct. It remains relevant evidence when deciding whether they in fact agreed to do so. A tribunal must address that evidential issue where it is material.

Following a relevant transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006, the claimant's employment transferred from Excel Compressor Engineering Ltd to the respondent by operation of law. Neither principal appreciated that consequence at the time.

The Manchester Employment Tribunal held that the claimant and the respondent had agreed on 31 July 2015 to end his employment with the respondent and restore his employment with Excel. It dismissed his unfair-dismissal and wages claims because they had been brought against the wrong employer.

The claimant appealed. The central issues were whether the tribunal's finding of an agreement at the 31 July meeting had an evidential basis, and whether it had failed to address the contractual clause requiring variation or agreed termination to be in writing.

1. Appeal allowed. The Employment Tribunal's conclusion that the claimant had ceased to be employed by the respondent was unsafe and its judgment was set aside.

2. The tribunal had resolved the disputed question of agreement by finding that it was reached at the meeting of 31 July 2015. That finding had no evidential basis. It was neither party's case, and the claimant's evidence about that meeting had not been challenged on that basis. Although an agreement might conceivably have been reached at another time, the erroneous finding as to the meeting materially undermined the tribunal's conclusion.

3. The tribunal also erred by failing to engage with the written-formality clause in the service agreement. The authorities showed that party autonomy permits an oral or conduct-based variation or consensual termination despite such a clause: [2016] EWCA Civ 396 and [2016] 3 WLR 1519. The clause was nevertheless relevant evidence. It bore on whether the claimant could properly be found to have agreed to vary or end the contract which had transferred under Transfer of Undertakings (Protection of Employment) Regulations 2006.

4. The Employment Appeal Tribunal could not determine the disputed factual issue itself. The preliminary issue was remitted for a fresh hearing before a differently constituted Employment Tribunal. The earlier misunderstanding and failure to address the contractual point meant that this course was necessary to preserve the claimant's confidence in the process; it caused no material proportionality concern.

• Employment Appeal Tribunal: appeal allowed; the Manchester Employment Tribunal's decision dismissing the claims against the respondent was set aside and the preliminary issue was remitted to a differently constituted tribunal.
• Manchester Employment Tribunal: Reserved Judgment sent to the parties on 14 October 2016. It held that the claimant had reverted to employment with Excel and dismissed the claims against the respondent.