`		Appeal No. EAT/741/93

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 25 April 1994

	Before

	THE HONOURABLE MR JUSTICE MORISON

	MS S R CORBY

	MS M EXLEY

MRS L RUBY & OTHERS	APPELLANTS

SUTCLIFFE CATERING NORTH LTD	RESPONDENTS

	Transcript of Proceedings

	JUDGMENT

Revised

	APPEARANCES

For the Appellants	MR BRUCE CARR
	(OF COUNSEL)
	Messrs Rowley Ashworth
	247 The Broadway
	Wimbledon
	London SW19 1SL

For the Respondents	MR ANTHONY KORN
(OF COUNSEL)
Messrs Dibb Lupton
Broomhead
125 London Wall
London EC2Y 5AE

	MR JUSTICE MORISON:	The Appellant employees are a group of nineteen canteen workers who made a complaint to an Industrial Tribunal, which was presented to the Tribunal on December 17 1992, alleging that the Respondent employer, Sutcliffe, had made unauthorised deductions from their wages, contrary to the Wages Act 1986.  In essence what they complain of is Sutcliffe's failure to implement a pay increase to which they allege they are contractually entitled.  The action of which they complained took place, according to the IT1, every month and continuing.  At the Industrial Tribunal the employees were represented by Mr Gilbertson, a District Secretary of their Union the AEU, and Sutcliffe was represented by Mr Head, their Human Resources Manager.

	The Tribunal had before it oral evidence on behalf of the employees, certain contemporary documentation and written representations by each party.  We observe that in the written representations on behalf of the employees, it is said that when the employers refused to pay the disputed increase, the AEU referred the matter to their legal department.  Although Mr Gilbertson is not a lawyer the claims were presented with the benefit of, and presumably in accordance with, legal advice.  The factual background to the dispute may be shortly stated.  

	The employees worked within the catering department of Vauxhall Motors factory premises at Ellesmere Port.  At Vauxhall's main plant at Luton there are also catering workers.  Vauxhall had contracted out its catering and vending activities at Ellesmere Port to ARA Services Limited, by whom the employees were employed, until the end of  September 1991, when the contract was put out to tender and the Respondents won the bidding.
 
	At Luton, Vauxhall itself employed the staff doing such comparable work.  At Ellesmere Port the AEU was recognised for bargaining purposes of the contracted out staff.  In 1984 they entered into a collective agreement with ARA, which is the called the Consolidated Agreement 1984, and that agreement applied to all hourly rated permanent catering employees employed in the catering establishment of Vauxhall at Ellesmere Port, Cheshire.  It is to be noted that the objective of the Consolidated Agreement so far as pay was concerned was to increase the hourly rates of pay of the ARA employees at Ellesmere Port, so that by a three stage process they would achieve a basic rate equivalent to and no less favourable than the hourly rate of Vauxhall's catering staff at Luton.

	Parity was in practice maintained until 1990 following each of the subsequent annual pay reviews.  Bargaining at Luton in relation to the general level of wages and conditions was in 1990 done collectively between Vauxhall and four Trade Unions, including the AEU.  In that year, a new agreement was entered into with Vauxhall called the Vauxhall New Employee Agreement 1990 (the 1990 Agreement).  This agreement sought, amongst things, to deal with the fears of the employees representatives that Vauxhall might abuse the agreement they had relating to Vauxhall's use of outside contractors.  In appendix 4 to the 1990 Agreement there was a provision which related to the catering workers employed at Ellesmere Port.  

	When ARA sought to rely on the clause in Appendix 4 to the 1990 Agreement, during the wage round in September 1990, the AEU objected, taking the point that the 1990 Agreement was not incorporated and could not have been incorporated into the contracts of employment of people employed by ARA, since ARA were not a party to it.  Accordingly, parity was maintained.  That remained the position until 1991 where there was a re-tendering and ARA ceased to be and Sutcliffe became the catering contractor at Ellesmere Port.  Sutcliffe were informed that their bid had been successful in early August and various negotiations took place between the parties, that is the AEU and Sutcliffe, relating to the recruitment of staff, their rates of pay and procedural and recognition matters.  

	On about October 25 1991 the AEU signed a new Procedural and Recognition Agreement with Sutcliffe.  Whilst this document recited the rate of pay which currently applied there appeared to be nothing in the agreement itself about parity, either 100% as the Union wanted, or 90% as Sutcliffe wanted.  On September 17 1992 at a meeting between representatives of the Union and employers, Sutcliffe proposed new rates of pay which represented a 4% increase over what they had previously paid.  The effect of this increase, together with other increases awarded to equivalent staff employed by Vauxhall at Luton was to achieve the 90% parity which Sutcliffe had been contending for.  This led to the Tribunal applications.

	The Tribunal directed itself to the issue raised before it by the parties: namely, whether the employees were entitled under their contracts with Sutcliffe, to 100% parity with Luton.  They found, on the basis of the arguments presented to them, in favour of Sutcliffe, that is on the basis that new contracts had been entered into in August/September 1991.  Accordingly, on the point as it was presented to the Tribunal it has not been argued that the Tribunal were wrong.  However, the employees wish to argue before us that the circumstances in which the change of outside contractor took place, amounted to a transfer of an undertaking within the meaning of TUPE, and that therefore the contracts of employment between Vauxhall and ARA continued in existence after the transfer by operation of law and thus the employees were entitled to 100% parity with the workforce at Luton who were doing comparable work. 

	That matter was not argued below and we are satisfied that we cannot deal with that argument today, as it will require the analysis of evidence.  Whether there was a transfer within the meaning of the regulations is largely a matter of fact and degree once the correct legal tests have been applied.  We have only limited original jurisdiction and are not properly equipped to deal with evidential matters.  At any such hearing the Tribunal will wish to consider whether it is correct to say that under the arrangements with ARA the employees were contractually entitled to 100% parity with Luton.  They may always have achieved parity after September 1985, but the Tribunal will wish to consider the contractual issue with care, because the premise on which a claim will be based is that the ARA contract required the employers to increase their pay in line with Luton.  We express no view one way or the other on this issue.     

	Normally speaking this Tribunal will not allow parties to argue before it points which they could, and should, have taken before the Industrial Tribunal.  The reason for that, as has been explained in argument, is that there is high premium on finality to litigation.  But here there are still outstanding grievances and on any view the claims will continue and it would be open to the employees, if we were simply to dismiss this appeal, to start fresh proceedings, claiming exactly the same matters in effect as they have been attempting to obtain for themselves through the originating process already filed with the Tribunal.

	Having considered the arguments that have been presented to us that there is some advantage for the employers to be gained by our dismissing this appeal and allowing those fresh applications to take place, we have come to the conclusion that those arguments are not of any substance.  We take the view that there would be no prejudice suffered by the employers if we were to remit the matter, rather than dismissing this appeal as it stands.  We have addressed our minds to the question as to whether it would be sensible to remit the matter to the same Tribunal or whether in the circumstances it would be better to have a complete new hearing.

	We have come to the conclusion, again having heard the argument between the parties, that should the same Tribunal be available the matter should be remitted to the same Tribunal. That will save some time because they are aware of the background to this case and this will enable them more speedily to resolve the remaining issues between the parties.  It seems to us very likely that the Industrial Tribunal, having had the matter remitted to them, will take the view that there should be a preliminary directions hearing so that it can discuss with the parties the way the cases are to proceed.  There may be jurisdiction or other issues which they will first have to consider.  It may be that they will think that it is sensible that the IT1 and IT3 documents should be amended so as to ensure that all proper issues are raised before them.  They may wish to consider the question of discovery in relation to the transfer of undertaking point.  It seems to us that those are matters best left for the wise decision of the Industrial Tribunal rather than for us trying to anticipate in advance what would be a sensible order.  Accordingly, we will remit this matter to the same Industrial Tribunal so that it can now consider the claim put forward on behalf of the employees that the contract between ARA and themselves was transferred across and represent the terms and conditions on which they are employed by Sutcliffe.  That will enable the employer to take any point that he wants including arguments as to incorporation and as to waiver or assent or affirmation.

	Finally, we would like to say that no criticism is to be attached to the Industrial Tribunal for the way they dealt with this matter.  They are not required to seek out points for the parties.  The parties were properly represented as we see it and it was open to the Applicants to have relied on the Transfer of Undertakings Regulations before the Industrial Tribunal.  At the time when the hearing took place the Rask decision had already been reported and it seems to us that the employers have been prejudiced by the way in which the employees have elected to pursue their claim.  If there had been a full hearing before the Industrial Tribunal that which the employees had raised the question of the Transfer of Undertaking Regulations then this appeal would not have been necessary.  

	Accordingly, as it seems to us, the costs involved in the hearing of this appeal have been caused entirely as a result of the way in which the Applicants originally decided to present their case whilst they now wish to resile from.  It seems to us the proceedings before us today were indeed unnecessary and been brought about entirely by reason of the decision taken by the District Secretary as to the way in which he conducted this case on behalf of the Applicants.

	Accordingly, in accordance with Rule 34(1) of the Employment Appeal Tribunal Rules 1993, we take the view that it does appear to us that these proceedings were unnecessary and we are entitled to order the party at fault to pay the whole or such part of the costs of another party as it thinks fit.  We think that the whole of the costs of the Respondent of this appeal should be paid by the Applicants, by that we mean that we think in the circumstances that there can be no question of the Applicants personally bearing those costs, but they should be paid for by the AEU who have been conducting this case and funding this litigation on their behalf.  We are not in a position to assess the sum to be paid, and we therefore direct under Rule 34(2) that the amount of the costs be assessed in default or agreement  by the taxing officer in accordance with Rule 34(2).