Adefunke Adekoya & Ors v Heathrow Express Operating Company Ltd

An employer’s contractual obligation to provide an employment benefit is not made contingent on the continuing support of a third-party provider merely because that provider operates or supplies the benefit. Any such limitation must be incorporated into the employee’s contract and communicated clearly and unambiguously.

An employment tribunal cannot find that an employee agreed to surrender a contractual right by variation where that case was not pleaded or argued and the evidence does not support agreement. Where material facts and findings remain unresolved on tribunal jurisdiction or compromise, the proper course is remission.

The claimants were made redundant in 2020 after more than five years’ service. They claimed that their contracts entitled them to lifelong discounted leisure rail travel after redundancy.

The Employment Tribunal found that the relevant ATOC terms were incorporated into their contracts and originally conferred that entitlement. It nevertheless dismissed the claims for want of jurisdiction. It held that a reciprocal agreement between the respondent and Rail Staff Travel Ltd was also incorporated and permitted a 2019 withdrawal of the benefit for non-safeguarded staff.

The claimants appealed. The central issues were whether the tribunal could treat the third-party reciprocal agreement or the redundancy process as varying the contractual entitlement, and whether the claims fell within Regulation 3(c) of the Employment Tribunals (Extension of Jurisdiction) England and Wales Order 1994.

1. Appeal allowed. The tribunal’s unchallenged finding that the ATOC terms incorporated a contractual entitlement to continuing travel benefits for employees made redundant after five years’ service remained in force.

2. The tribunal erred in holding that the withdrawal provisions of the reciprocal agreement between the respondent and Rail Staff Travel Ltd were incorporated into the claimants’ contracts. The claimants were not parties to that agreement. Neither their contractual documents nor the incorporated ATOC document referred to it, and they had not received or known of it before the litigation.

3. Although a contract may expressly make an employer’s provision of a benefit contingent on continued third-party support, that limitation must be clearly and unambiguously communicated to the employee. Knowledge that a third party operated the scheme did not incorporate the terms governing that third party’s relationship with the employer. The tribunal therefore could not rely on the 2019 notice from Rail Delivery Group to deprive the claimants of their contractual rights. The principles in Amdocs Systems Group Ltd v Langton [2022] EWCA Civ 1027 applied.

4. The tribunal also could not infer a consensual variation from the redundancy consultation, the respondent’s assertion that the benefit would cease, or acceptance of the redundancy package. Such a case had not been pleaded or argued, and the relevant evidence did not establish that the claimants agreed to give up the right.

5. The tribunal’s conclusion that it lacked jurisdiction under Regulation 3(c) depended on its erroneous conclusion that the entitlement had been varied. The EAT did not determine whether the claims arose or were outstanding on termination, because further factual findings and legal argument might be required. That issue was remitted for rehearing by Employment Judge Apted, if available. The separate issue whether settlement agreements and £750 payments compromised the claims remained for the tribunal.

• Employment Appeal Tribunal—allowed the appeal and remitted the outstanding jurisdictional issue under the Employment Tribunals (Extension of Jurisdiction) England and Wales Order 1994, together with the unresolved compromise issue, to the Employment Tribunal: [2024] EAT 72.
• Employment Tribunal—at a preliminary hearing on 17 and 18 October 2022, dismissed the breach of contract claims for want of jurisdiction after finding that the contractual travel entitlement had been varied.