Tabberer & Ors v. Mears Ltd & Ors

Under regulation 4(4) of the Transfer of Undertakings (Protection of Employment) Regulations 2006, the decisive inquiry is what caused the employer to vary the contract. A transfer may provide the setting in which an employer encounters a contractual term, but context and a temporal link do not establish that the transfer was the sole or principal reason for the variation.

A tribunal may find that the employer acted for an independent reason, such as its genuine belief that an historic allowance was outdated and unjustified. An earlier judgment confirming the contractual entitlement may force the issue or provide context without becoming the reason for the change.

A party cannot ordinarily raise on appeal an objection to an issue which was live before the tribunal and was not then taken.

The Claimants were electricians whose employment had passed through several transfers, the last being a transfer to Mears Ltd in 2008. Their inherited terms included Electricians Travel Time Allowance (ETTA), a payment whose historic rationale had ceased to reflect modern working practices.

After earlier proceedings established that certain electricians had a contractual entitlement to ETTA, Mears gave notice in 2012 that the allowance would cease. The Employment Tribunal at Birmingham dismissed claims for unauthorised deductions. It found that the variation was made because ETTA was outdated and unjustified, not for a reason connected with the transfer. It also found that entitlement depended on submission and authorisation of a claim form.

The Claimants appealed on the connection with transfer issue and on the asserted precondition for payment.

1. Appeal dismissed. The Employment Tribunal was entitled to find that the 2012 contractual variation was not void under regulation 4(4) of the Transfer of Undertakings (Protection of Employment) Regulations 2006.
2. The first task was to identify, as a matter of fact, the employer's reason for the variation. The Tribunal had found that the real reason was Mears's belief that ETTA was an outdated and unjustified allowance in light of long-standing changes in working practices. That finding was open to it.
3. The earlier ETTA litigation was the context in which Mears had to decide whether to retain or terminate an entitlement that had been held to be contractual. It did not itself supply the reason for the variation. The litigation determined contractual entitlement regardless of the transfer, and was therefore TUPE-neutral for this purpose.
4. The fact that Mears first encountered the issue on taking over the employees did not make the transfer the reason for its decision. The perceived problem had existed before the transfer and had confronted earlier management. Regulation 4(4) is not a “but for” test. The transfer was background, rather than the operative cause of the variation.
5. The reference in the notice to fairness for other workers did not require a finding that Mears was harmonising transferred terms. The Tribunal could regard it as concern about retaining an unjustified benefit across different job groups.
6. On the second ground, no issue estoppel arose from the earlier ETTA proceedings because the submission-of-claim condition had neither been raised nor decided there. The issue was live in the present proceedings and had been advanced without objection. The Tribunal's factual findings about forms and authorisation adequately supported its conclusion that ETTA was payable only upon submission of a relevant claim form. The Claimants could not first object to that issue being raised on appeal.

• Employment Appeal Tribunal Dismissed the Claimants' appeal.
• Employment Tribunal, Birmingham In a judgment sent to the parties on 10 May 2016, dismissed the claims for unauthorised deductions relating to non-payment of ETTA.