Although most employees will know the identity of their employer, things can get complicated in the event of a merger and/or a TUPE transfer, as in the case of Crest Packaging Ltd and ors v Bell and ors.
The employment appeal tribunal (EAT) has said that tribunals must look for documentary evidence before deciding the employer's identity, and not make assumptions about the employer's intentions.
Amicus instructed Thompsons to represent its members.
What were the basic facts?
Following the collapse of the Crest group of companies in 2003, almost 300 employees brought claims for outstanding wages and for unfair and wrongful dismissal.
However, before any of the claims could be heard, the tribunal had to decide whether the parent company, or one of two subsidiaries, was their employer. Six employees were chosen as representatives of the 267 claimants, with everyone agreeing to abide by the outcome.
The tribunal chairman (sitting alone) decided that all the test claimants were employed by Crest Packaging Limited, the parent company of the group, and not either of the two subsidiaries. All three companies challenged that decision.
What was the relevant history?
In May 1985, Crest Flexible Packaging Ltd bought two subsidiary companies from Bowater, which it then transferred on to Crest Cartons Ltd shortly afterwards. The parent company of that group became Crest Packaging Ltd.
The first three test claimants, Messrs Parry, Bell and Ingram had originally been employed by Bowater, but were transferred under the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) to Crest Flexible. Mr Ingram was then transferred on to Crest Cartons.
Messrs Breaker, Packham and Stevens, who had all joined the Crest group after May 1985, were issued with statements of terms and conditions which only referred to Crest Packaging. The tribunal chairman decided that the parent company must therefore have considered itself to be their employer.
On that basis, he concluded that it would be irrational for pre-1985 employees to have a different employer from post-1985 ones; that Crest Packaging clearly controlled their terms and conditions of employment; and that it made no distinction between pre- and post-1985 employees.
What did the EAT Decide?
Messrs Parry, Bell and Ingram. The EAT said that the chairman seemed to think that all he needed to do was assess whether Crest Packaging intended to be their employer. Instead of concentrating on what Crest Packaging intended, he needed to look for evidence to back up his conclusion that these three employees had ceased to be employed by Crest Flexible or Crest Cartons, and been re-engaged at some point on new contracts of employment with Crest Packaging.
As he had not done that, the chairman had misdirected himself as to the relevant law and had come to a factual conclusion that was "perversely misguided".
Messrs Breaker, Stevens and Packham In these cases, the EAT said that the chairman did not apply any of the correct legal principles. It criticised his conclusion that the three were employees of Crest Packaging "primarily" because it had issued them with their statement of terms and conditions. They said that he "focused merely on what one party to the supposed employment contract intended or expected, and ignored all evidence pointing to whether or not there was any evidence to show whether the employees intended to, and did, contract with Packaging."
In particular, it said that the chairman paid no "express regard" to the documentary material indicating that one of the subsidiaries was the real employer. Nor did he provide an explanation for all the material produced by Crest Flexible and Crest Cartons, indicating that in fact they were the employers.
The EAT allowed the appeal and remitted the issue of the identity of the employer of each of the six test claimants to a different tribunal for re-hearing.