Barrasso v New Look Retailers Ltd

The exclusion of the right to claim unfair dismissal under Employment Rights Act 1996 s.205A depends on the statutory pre-conditions being satisfied when the employee shareholder agreement is made, not on a fresh or continuing affirmation at the time of dismissal.

Employee shareholder status can, however, be brought to an end by a subsequent inconsistent agreement or act. That is a matter of contractual construction and fact, not a rule of continuous statutory re‑affirmation.

Where parties adopt separate instruments dealing with different matters, a later service agreement does not automatically supersede a prior statutory employee‑shareholder agreement, especially if the later document expressly preserves a deed that replicates the waived statutory rights.

The appellant entered a valid employee‑shareholder agreement under Employment Rights Act 1996 s.205A in September 2015 and a separate deed provided contractual means to recover equivalents of unfair dismissal and redundancy remedies. In March 2017 the parties executed a new service agreement that contained a whole‑agreement clause but expressly preserved the September 2015 deed. The claimant was dismissed in February 2018 and sought to bring unfair dismissal proceedings. The Employment Tribunal held the claimant remained an employee shareholder and struck out the unfair dismissal claim. The claimant appealed to the Employment Appeal Tribunal on construction of s.205A and on whether the March 2017 agreement had terminated employee shareholder status.

The central issue was whether employee shareholder status must be affirmed at the date of dismissal or whether a subsequent inconsistent agreement was required to terminate that status.

(2) Employee shareholder status may be terminated by a subsequent inconsistent agreement or other clear act. Whether that has occurred is a question of contractual construction and factual finding. The EAT agreed with the ET that termination of status was a matter for ordinary contractual analysis.

(3) On the facts, the ET permissibly found that the March 2017 service agreement did not deal with the same subject matter as the s.205A agreement and therefore did not supersede it. The express preservation of the September 2015 deed supported the construction that contractual 'reinstatement' of rights was intended to continue by deed and not by restoring statutory rights. The ET's factual findings about the parties' intentions were within its jurisdiction and not perverse.

(4) The Claimant's reliance on section 203 Employment Rights Act 1996, the ECHR or other international instruments did not require a different construction. Those instruments did not show that the legislature intended that employee shareholder status could only be lost by a fresh statutory‑style re‑affirmation at the date of dismissal.

(5) Final order: the ET decision striking out the unfair dismissal claim is upheld and the appeal is dismissed.

• Employment Tribunal (London Central) – Judgment striking out the unfair dismissal claim (Employment Judge J S Burns) (8 January 2019).
• Employment Appeal Tribunal – Appeal dismissed; EAT judgment upholding the ET's construction and factual findings (Her Honour Judge Eady QC) (22 August 2019).