Case roundup

This week’s case roundup

Consultation was ingood time
MSF v Refuge Assurance Plc & another All England Direct (209)
February 2002 EAT

RA and UFI operated as two separate companies and many of their employees
were members of the MSF. Between May and July 1996 RA and UFI were in merger
talks which potentially would reduce staff numbers by around a quarter.

An Integration Steering Group was established to oversee the merger and in
February 1997 the proposed plans were put to the MSF and other unions. By the
time the merger was concluded, 1,777 employees had been made redundant.

In March 1998 the MSF brought an unsuccessful tribunal claim for failure to
consult for the purposes of redundancy. The tribunal held the RA and UFI had
consulted in good time and had complied with Section 188 of the Trade Union and
Labour Relations (Consolidation ) Act 1996.

MSF appealed, arguing that the duty to consult was triggered by nothing more
than a contemplation of collective redundancies and that the Act should be construed
in accordance with Directive 75/129 on collective redundancies.

The appeal was dismissed. Applying the requirements of the Directive would
distort Section 188 by imposing additional obligations. On a straightforward
construction of Section 188, there had been no error of law by the tribunal and
consultations had taken place in good time. There is an inference that Section
188 may not comply with the Directive. However, this is a Government issue.

What is a relevant transfer?
Ministry of Defence -v- (1) Carvey & Ors (2) Rentokil Initial
Security Ltd

Carvey and his colleagues were employed by Rentokil as unarmed security
guards at an MOD site but were dismissed by Rentokil when the MOD brought
security back in-house and used an armed security unit.

Carvey claimed he had been made redundant by Rentokil or alternatively, had
transferred to the MOD which had dismissed him unfairly. At a preliminary
hearing the tribunal found that the security service was an ‘economic entity’
which had transferred even though Rentokil’s undertaking was labour intensive
and no assets or employees transferred. The MOD appealed.

The EAT reviewed domestic and ECJ case law and held that while there was an
economic entity it had not been transferred. There was no ‘ECM motive’ (an
intention to avoid the application of Tupe by intentionally not taking on the
employees ) and the MOD’s termination of Rentokil’s contract was motivated by
genuine reasons unrelated to Tupe; specifically, overriding economic reasons
and a desire to employ armed guards.

All relevant circumstances had to be taken into account as a whole and not
individually in isolation and an ‘ECM motive’ was only one factor rather than a
decisive factor.

This is an example of how difficult the current law is. While the conclusion
may give encouragement to some employers, it should be treated with caution.

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