Metroline Travel Ltd v D'Auvergne & Ors

A tribunal determining whether a transferred employee remains entitled to a contractual payment must identify the relevant contractual terms and the mechanism by which any qualifying facility becomes “recognised”. A later agreement recognising a facility may implement an existing contractual mechanism rather than vary the employee’s transferred terms.

Where the alleged recognition mechanism is contained in a collective agreement, the tribunal must determine whether its relevant provisions were intended and apt to be incorporated into individual contracts. It must make the necessary factual findings before deciding that a contractual entitlement has been altered or remains payable.

Five bus drivers transferred from Arriva to Metroline with route 168 under Transfer of Undertakings (Protection of Employees) Regulations 2006. Their former employer had paid a meal relief payment when they took meal breaks at Hampstead Heath. Before the transfer, Metroline had agreed with its recognised union that Hampstead Heath was a recognised relief facility and that no such payment was due.

The Employment Tribunal held that the drivers retained a contractual right to the payment and that Metroline had made unlawful deductions under section 13 of the Employment Rights Act 1996. Metroline appealed. The central issue was whether the contractual mechanism for recognising a relief facility had been identified and, if it derived from a collective agreement, whether it was apt for incorporation into the individual contracts.

1. Appeal allowed and matter remitted. The Employment Tribunal erred in law because it did not identify the contractual terms governing recognition of a relief facility. Without doing so, it could not decide whether Hampstead Heath had been recognised pursuant to the existing contracts or whether the employer had impermissibly changed transferred terms.

2. The prior payments and payslips could support an inference that, until about 2010, the parties did not treat Hampstead Heath as a recognised facility. That evidence did not resolve the decisive contractual question: how a facility became recognised.

3. The contract might define recognition, prescribe objective criteria, or provide a mechanism such as agreement between employer and recognised union. If the latter mechanism formed part of the transferred contracts, a later recognition by Metroline and a union could be the application of unchanged contractual terms rather than a variation of them.

4. If the recognition provisions were contained in a collective agreement, the Tribunal had to determine whether the individual employment contracts were intended to incorporate them and whether those provisions were apt for incorporation. The distinction drawn in Malone could not be conclusively applied without first identifying the relevant provisions and their contractual setting.

5. The Tribunal had also given inadequate reasons for its conclusion that the drivers had a continuing contractual entitlement to payment for breaks at Hampstead Heath. Grounds (iv) and (vii) succeeded; the remaining grounds required further factual findings or were not pursued. The case was remitted for reconsideration in accordance with the EAT’s judgment.

• Employment Appeal Tribunal: allowed Metroline’s appeal and remitted the matter to the Employment Tribunal for reconsideration: [2020] UKEAT 214_19_3001.
• Employment Tribunal: decision of 15 March 2019 held that the drivers had a contractual entitlement to meal relief payments at Hampstead Heath and that non-payment was an unlawful deduction from wages.