Appeal No. EAT/1037/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 19 September 2002

Before
MR RECORDER UNDERHILL QC
MR P DAWSON OBE
MR J C SHRIGLEY

MR L C KOSBAB & OTHERS	APPELLANTS

LONDON UNITED BUSWAYS LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellant	MR NECKLES
TU Official
Public Transport Staff Consortium (PTSC)
31B Mervan Road
Brixton
London
SW2 1DP	

MR RECORDER UNDERHILL QC

1.	This is the Preliminary Hearing of an appeal against the decision of an Employment Tribunal sitting at London South dismissing the claims brought by the seven Appellants.  We will describe the claims in more detail in due course.  In order to understand the issues it is helpful to set out the background facts in a little more detail than they appear in the decision of the Employment Tribunal.

2.	The Appellants are or were employed by the Respondents as bus drivers.  Prior to 5 February 2000 they worked at the Respondents’ West Ramp Depot at Heathrow Airport.  The services operated out of West Ramp comprised the Respondents’ Airbus Services and a group of services known as Feltham Gateway.  The Airbus Services had in the past included two routes to and from London, A1 and A2, and the hotel shuttle; but Route A1 and the hotel shuttle had in the past year or so both been discontinued.  
 
3.	The Respondents at all material times worked on the Feltham Gateway Services.  Airbus had clearly been in decline for some time.  In 1996 and 1997 a series of agreements had been reached between the Respondents and the recognised trade union, the Transport and General Workers Union, to bring about a reduction in the establishment of dedicated Airbus drivers, who enjoyed better terms and conditions than other drivers employed by the Respondents.  Those agreements were summarised in a document described as the Displaced Airbus Drivers’ Agreement, which we will call the DADA.  This is dated 19 February 1998.  It was issued to ex-Airbus drivers who continued to work at West Ramp but no longer primarily on Airbus work.  The DADA was formally incorporated in the contracts of employment of such drivers, who included each of the Appellants: it constitutes Appendix B to their statutory statement of terms, which appears in all their cases to have been reissued in February 1998 for that purpose.  
4.	In January 2000 the Respondents announced that they were negotiating the sale of the remaining Airbus route, A2, and that they would be leaving West Ramp altogether: the Feltham Gateway services would be operated from Hounslow.  A2 drivers would, unless they objected, be automatically transferred to the purchasers under TUPE, but the Feltham Gateway drivers would of course have to relocate to Hounslow.

5.	It is clear, and the Tribunal so found, that the Respondents reached an agreement with the Transport and General Workers Union as to the terms covering that relocation.  It is necessary to follow the correspondence and minutes of meetings.  In his initial letter to Mr Jackson, the Passenger Trade Group Secretary of the Transport and General Workers Union, Mr Lott, the Respondents’ Operations Director, in announcing the sale said as follows:

“London United will retain the Feltham Gateway routes which will transfer to Hounslow Heath on the Garage’s terms and conditions.  I propose that the agreement recently reached regarding displaced Airbus staff be extended to include staff now transferring to Hounslow Heath.  Please find the details attached.”

And he enclosed with that letter a document headed ‘Transfer of Feltham Gateway Drivers to Heathrow Heath’.  That is the first draft of a central document in this case to which we will be referring in a moment and which we describe as the ‘January document’.  It is not identical to the final draft.  The phrase in Mr Lott’s letter ‘the agreement recently reached regarding displaced Airbus staff’ might sound like a reference to the DADA; but it is clear from the documents to which we refer below that the reference was to much more recent agreements arising out of the closure of the A1 and Heathrow Shuttle services.

6.	There then followed a formal meeting on 12 January 2000 between the Respondents and the Union of which the minutes are in the bundle and are referred to by the Tribunal.  The minutes include a statement by Mr Lott that:

“The Feltham Gateway staff would transfer in accordance with the recent agreement reached by the T&GWU and Mr Cahill when the A1 and Hotel Shuttle Services were withdrawn.”

And later in the meeting he is recorded as saying this:

“Previously when staff have transferred to a new location, they receive a disturbance allowance, which is based on an agreed formula, and protection of earnings, the difference in average rostered earnings for 12 months.  Last October/November, a number of Airbus staff were moved to the garages and the normal process was adopted, disturbance allowance and protection of earnings.  Meetings were held to discuss the other issues and as a result, lump sum payments were agreed to further compensate staff and to provide a loyalty bonus.  As the agreement was made only a few months ago, and as it was fully negotiated, Mr Lott said the same compensation would apply.”

The minute shows one of the union representatives, Mr D’Cruz, asking a point of detail in relation to those arrangements.

7.	On the following day, 13 January 2000, Mr Carey, the Respondent’s General Manager, wrote to the employees affected, referring to the fact that he had been having discussions with the Union.  He referred to the effect of TUPE for those employees working on the A2 service.  In relation to the remaining staff, he stated that:

“Staff that transfer to any London United garage will do so under the terms and conditions applicable at that location.  Staff will receive the disturbance allowance, protected earnings and lump sum payments as negotiated.”

A similar statement appears in a letter to Mr D’Cruz of the same day, and that letter attached the final version of the agreement headed ‘Transfer of Feltham Gateway and A2 Drivers to London United Garages’.  We describe that as the ‘January document’.  It is the same document that the Tribunal referred to in its Reasons as the document appearing at pages 173-174 of the bundle.

8.	The January document essentially provides for three kinds of benefits.  It provides for a disturbance allowance; for protection of earnings; and for a lump sum payment by way of loyalty bonus.  It is to be observed that the DADA also provided at clauses 3-4 for a protected earnings formula.

9.	The Union and the Respondents met again on 20 January 2000 and it was made clear again that the package for the Feltham Gateway drivers was to be “the one that was negotiated by the T&GWU and Mr Cahill only weeks ago”.  The Respondents made the point that they had amended it following the previous meeting by increasing the weekly protected earning allowance for Hounslow Heath, and it was made clear that the Respondents were not prepared to improve the offer further.  Further on in the same minutes Mr Lott is reported as stating again that:

“ staff transferring to Hounslow Heath or other locations would be on the terms and conditions of that location.  This was the same as the drivers who were transferred out of Airbus 4-6 weeks ago.  Mr Jackson (for the Union) confirmed the same package was being offered.”

10.	The correspondence and meetings continued with the Union on a number of issues relating to the changes.  There was a further meeting on 27 January 2000 but the question of the package for the Feltham Gateway drivers was not revisited.  On 1 February the Respondents wrote to all the affected employees including the Appellants in the following terms:

“I am writing to confirm that following the sale of Airbus to the National Express Group on 4 February 2000 you will transfer with the Feltham Gateway services to Hounslow Heath on the following day.  You will appreciate that the priority must be to have sufficient staff to operate the T123 and T4 therefore, if you have expressed an interest on your option form in working at another London United garage, this will be affected as soon as resources allow and in Airbus seniority order.

I enclose the terms and conditions applicable to Hounslow Heath and also the agreed special payments to displaced staff affected by the Airbus sale.”

The enclosure was what we have described as the ‘January document’.

11.	It is clear from that sequence of events that there was ample evidence, to put at its lowest, on which the Tribunal could find that agreement was reached with the Trade Union as to the terms which would apply to the Feltham Gateway transfer and that that agreement was in the terms of the January document.  The Tribunal made an express finding to that effect at paragraph 13 of the Extended Reasons, the last two sentences of which read:

“The Respondent agreed that it should apply to the new situation in February 2000.  The Tribunal found that the new rates agreed with the TGWU in January 2000 are shown, for example, at page 173-4 of the bundle.”

That is as we have said a reference to the January document.

12.	There is one oddity here with which we need to deal.  The sentences preceding those quoted in para 11 above read as follows:

“The union also considered that the recently agreed basis for the payment of disturbance allowances, protection of earnings and lump subs should apply.  This agreement was called the “Displaced Airbus Driver’s Agreement” an example of which appears at page 269 of the bundle.  It had been agreed in February 1998 to accommodate drivers who had been moved at that time due to a downturn in services.”

Reading the two passages together, it would appear that the Tribunal was finding that what was agreed in January 2000 was that the DADA should apply.  That however cannot be correct, or in any event cannot be the full story, because, as the documents that we have referred to demonstrate, what was agreed in the meetings and correspondence of January 2000 was based on a much more recent agreement arising out of the closure of the A1 and Heathrow Shuttle Services, and the Tribunal’s own reference to the January document shows that it in fact appreciated this.  The anomaly may in fact be more apparent than real.  It is legitimate to regard the January document as a further development or refinement of the DADA which of its nature called for detail working out on particular issues.  In any event it is perfectly plain what the Tribunal intended to find, since - to anticipate a passage to which we refer below - in paragraph 56 of the Extended Reasons it referred to the DADA having been amended by the January document.

13.	The Appellants are all drivers who transferred to Feltham Gateway.  The Respondents applied to them the terms of the January document.  They did not apply to them the terms of the DADA, at least so far as they were inconsistent.  The Appellants complained that this was unlawful.  The basis of their complaint appears to be essentially two fold.

14.	First, the Appellants complained that nothing occurred to incorporate the January document into their contracts of employment.  The way that it appears to have been put before the Tribunal was that individual employees were not invited to ballot or even consulted by their Trade Union about the agreement of the January document.  It is indeed clear that they are very disgruntled with the Transport and General Workers Union.  All the Appellants have left that Union and have joined the Public Transport Staff Consortium, whose General Secretary Mr Neckles represents them today.  

15.	Secondly, the Appellants complained that in any event the January document, even if contractual, does not in any way amend the terms of the DADA but simply gives additional rights.  The principal argument appears to have been that the January document was intended to apply only to a “displacement” and not to a “relocation”: what had occurred in the present case was a “relocation” because entire routes had moved from West Ramp to Hounslow Heath.

16.	On the basis of those arguments all the Appellants claimed arrears, being the alleged differences between the sums that they were in fact paid and what they say that they would have been entitled to had the DADA been applied.  (The Tribunal was unable to conclude on the evidence before it whether there were in fact any such differences but that issue does not arise on this appeal.)  Two of the Appellants in addition claimed unfair constructive dismissal: they resigned and claimed that they were entitled to do so because the denial of their contractual entitlements under the DADA constituted a fundamental breach of contract.

17.	As regards the first of the two principal bases of the Appellants’claims ie as outlined in para 14 above, the Tribunal found as follows in paragraphs 56-57 of the Extended Reasons:

“56.	  The Tribunal concluded that the Displaced Airbus Drivers’ Agreement had been amended by the inclusion of allowances set out in the Agreement negotiated with the TGWU, an example of which is at page 173 of the bundle (that is the January document).  This was the agreement that providing for protection of earnings and so on.

57  The Tribunal concluded that these additions had been negotiated and agreed by the Respondent with the trade union.”

That was a finding which was in our view plainly open to it, if not indeed inevitable on the documentary evidence to which we have referred.  Mr Neckles, in oral submissions before us - they are not in his Grounds of Appeal - suggested there was no evidence of any agreement.  That seems to us to be unsustainable.

18.	The Tribunal held in paragraph 58 that the absence of a ballot was not relevant.  That seems to us to be correct.  The contracts of employment, as the Tribunal found them, provided either explicitly or by necessary implication that the employees’ terms and conditions would be negotiated collectively with the Transport and General Workers Union.  The employees were in consequence bound by any agreement so made whether the Union had conducted a ballot or not.

19.	As to the second basis of the Appellants’ attack, the Tribunal explicitly rejected the argument that the January document was not intended to apply in the present circumstances.  At paragraph 19 of the Extended Reasons it said as follows:

“The Tribunal rejected the Applicants’ contention that the word “displacement” was different from the word “relocated”.  The Applicants suggested that because they were relocated to Hounslow Heath rather than displaced there, they should have retained their Airbus terms and conditions.  The Tribunal found that these words have the same meaning in these particular circumstances.”

Again, we regard that conclusion as legitimate and indeed obviously correct.  It was plain from the documents to which we have referred that the agreement which the Tribunal found to have occurred was made precisely in order to apply to the present situation.  Once it is accepted that the January document applies to the present situation it must plainly follow that it overrides any provisions of the DADA which might be said to be inconsistent with it.  It is, as the Tribunal found, an amendment of that document.

20.	In the Appellants’ Grounds of Appeal a number of points are taken with which we should briefly deal.  The Grounds are under three heads with a number of sub points.

21.	Firstly, at paragraph 2 of the Grounds the Appellants contend that the Tribunal misdirected itself in law when applying the evidence to the law.  Five points follow.

22.	The first is that the contract between the parties was that the DADA was applicable at the material time.  That is true as far as it goes, but the question for the Tribunal was whether it was amended by the January document.

23.	Next, it is submitted that the agreement on its true construction provided that in the event of any displacement arising “there was clearly to be sought and obtained consent of the Trade Union concerned (TGWU)”.  It is not in fact clear to us that the agreement does so provide, but in any event, if it did, on the findings of the Tribunal the consent of the TGWU was obtained.  

24.	The third and fourth points go together.  They are essentially that some “further formality” was required before any amendment covering a particular displacement took effect.  This is not altogether easy to understand but it is certainly not the law that a collective agreement between trade union and employers needs to be embodied in any particular form.  It is a question of fact, just as with any other form of agreement, whether an agreement has been reached and as to its terms.  The Tribunal here plainly found on ample evidence that agreement was reached.  Under the same head it is said that the Trade Union concerned “had serious and continuous reservations as to the process of displacement.”  We have seen no evidence of such concerns by the Trade Union, though there were concerns by individual members who produced a petition.  But even if there were such evidence it would not affect the point: the Tribunal was entitled to and did find that agreement was reached.

25.	The final point made under this head is simply a statement, that if the DADA remained in place and un-amended a failure to give effect to its terms would be a breach of contract.  That is true but is beside the point.

26	We turn to the next head.  We need not make reference to all its individual sub points.  The essential submission being made is that on its true construction the January document does not replace or amend the DADA in any respect.  We have already addressed this argument in general terms.  We need only add that the January document plainly covers similar ground to the DADA as regards the payments to be made.  To the extent that they overlap, the findings of the Tribunal mean that it is the January document and not the DADA which is the governing agreement.

27.	The final head relates to the constructive dismissal claims of the two Appellants who resigned, Mr Sidhu and Mr Smith.  Once it is established that the application of the terms of the January document did not constitute a breach of contract no question of constructive dismissal can arise.

28.	In those circumstances, despite the helpful submissions of Mr Neckles in helping us to get to grips with what the issues in this case really were, we do not believe that this appeal can succeed and it must be dismissed.