Brightman & Others v Cornwall Care Ltd [Industrial Tribunal, 11 April 1997]
An Industrial Tribunal in Truro, Cornwall, has ruled that dismissals and offers of revised Contracts of Employment six months after a transfer of an undertaking were related to the transfer and therefore unfair and ineffective.
The case sends a clear message to the employer that merely delaying implementing transfer related changes by six months in an attempt to distance the changes from the transfer, and avoid the effect of the Regulations, will not necessarily be successful.
The case arose out of the transfer in April 1996 of 18 of the 20 Cornwall County Council run residential care homes to Cornwall Care Limited, a registered charity created and supported by the county council.
The Council had been aware since 1992 of the need to reduce the wage bill at the homes if they were to remain competitive with similar services provided by the private sector. In early 1994 the Council advised the unions that wage cuts were necessary and finally made a decision in December 1994 that the homes would be transferred out to Cornwall Care.
On reviewing the viability of the homes it was recognised by both the council and Cornwall Care Ltd that wage cuts would be necessary even after the transfer. In January 1996 the unions were consulted in relation to the April 1996 transfer and were told that changes to terms and conditions would have to be made.
The transfer took place and Cornwall Care continued to consult with the unions in relation to the changes in the terms and conditions until the decision in Wilson v St. Helens Borough Council [1997] IRLR 320 resulted in the Union, UNISON, withdrawing from the consultation process.
Cornwall Care then dismissed with notice all employees with effect from the 30th September 1996 and offered immediate re-employment on new terms and conditions. All staff went onto the new terms and the union members submitted claims to the Industrial Tribunal on the basis that their dismissals were automatically unfair by reason of their connection with the transfer and that the variation in their terms and conditions were ineffective.
The tribunal found that the transfer had only taken place to allow negotiations on the changes which the Council were unwilling to implement themselves. The tribunal found that the subsequent dismissals resulted from the failed negotiations and therefore had to be related to the transfer.
In coming to its decision the tribunal found that it had a choice between the conflicting decisions of Wilson v St. Helens Borough Council and Meade & Baxendale v British Fuels Limited [1996] IRLR 543 which held that employees were free to negotiate new terms after a dismissal without offending the Regulations. The tribunal preferred the Wilson decision as falling within the spirit of the TUPE Regulations.
The outcome of the Appeal in the Wilson case will however be a major factor in assessing the importance of the present case. Latest reports suggest that the case will be referred to the European Court for a decision - which could take up to 2 years.