Employer transferring business need not give accurate advice

[TrueBlueTerrier]

Employer transferring business need not give accurate legal advice

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Court of Appeal

Published October 16, 2009

Royal Mail Group Ltd v Communications Workers Union

Before Lord Justice Waller, Lord Justice Hughes and Lord Justice Rimer

Judgment October 14, 2009

An employer had to simply inform employees’ representatives of its considered view on the legal implications for the employees prior to a transfer of part of its business to another. The employer did not have to warrant the legal accuracy of its opinion.

The Court of Appeal so stated when dismissing the appeal of the Communication Workers Union against a decision of the Employment Appeal Tribunal (Mr Judtice Elias, President, Mr P. Gammon, Mr H. Singh) ([2009] ICR 357) allowing the appeal of Royal Mail Group Ltd from the judgment of an employment tribunal on June 17, 2008.

The Royal Mail Group transferred certain Post Office businesses to W.H. Smith. The appeal tribunal found that, although some automatic transfers of employees’ contracts would take place under the Transfer of Undertakings (Protection of Employment) Regulations (SI 2006 No 246), the group genuinely believed that no automatic transfers would take place and held that the obligation on it as employer was fulfilled if it informed the employees’ representatives as to its genuine belief of the legal implications of a transfer to any affected employees.

Mr Adrian Lynch, QC and Ms Judy Stone for the employers; Mr David Reade, QC, Mr Mohinderpal Sethi and Ms Sarah Watson for the union.

LORD JUSTICE WALLER said that the appeal raised an important issue relating to the scope and nature of the statutory obligation on employers to inform and consult appropriate representatives of any affected employees with regard to the effect of a proposed relevant transfer under regulation 13 of the 2006 Regulations.

When an employer transferred a business to another, regulation 4 provided for circumstances in which employees’ contracts were automatically transferred to the transferee.

Regulation 13 obliged the employer to provide information to the appropriate representatives of the employees, or in certain circumstances to the employees. Amongst the information that had to be provided was that under regulation 13(2)(b) which obliged an employer to inform the appropriate representatives of the legal, economic and social implications of the transfer for any affected employees.

The language of regulation 13 was not the language of strict liability or warranty. The opening paragraph showed the purpose:

“(2) Long enough before a relevant transfer to enable the employer of any affected employees to consult the appropriate representatives ... the employer shall inform those representatives..." It seemed to his Lordship a powerful point that it was not simply in relation to measures that consultation was contemplated.

Regulation 13(2)(b) obliged the employer to describe what he genuinely believed to be the legal social and economic implications of the transfer for any affected employees.

The employer was not in breach simply because the law and thus the legal implication was ultimately declared to be different.

The appeal would be dismissed.

Lord Justice Hughes and Lord Justice Rimer agreed.

Solicitors: CMS Cameron McKenna LLP; Simpson Millar, Wimbledon.

[pinstripe]

So Royal Mail with their hundreds of lawyers that trawl through legal text books looking for clauses to revoke Industrial Action, or resurrecting 200 year old laws so they can stop employees pay, can't get their fact straight. But it's all right, they thought they were correct, they weren't, but they thought they were. Where were their high powered layers then? Too busy union busting?
I'll bet a penny to a pound, if that had been Joe Bloggs and not RM, the outcome would have been different.