THE INDUSTRIAL TRIBUNALS 
 
CASE REFS:    1248/11  
1249/11

CLAIMANTS:	1.	John Gerard McCann
	2.	Jonathan McCann

RESPONDENTS:	1.	Vector Facilities Management Ltd
		t/a Aramark Workplace Solutions

	2.	Wallace Contracts (Northern Ireland) Ltd

DECISION

The unanimous decision of the tribunal is that:-

(i)	The respondents have failed in their duty to consult with the claimants under Regulation 13 of the Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006 and we order the respondents to pay to each of the claimants the sum of £2132.62, as set out at para 3.11 of this decision.

(ii)	The claimants were constructively dismissed by the first-named respondent and we order the first-named respondent to pay the first-named claimant the sum of £19,595.17 as set out at para 3.15 of this decision and to pay to the second-named claimant the sum of £15,884.18 as set out at para 3.15 of this decision.

Constitution of Tribunal:

Chairman:	Miss E McCaffrey

Members:	Mr J Kinnear
	Mr A Crawford

Appearances:

The claimants were represented by Mr B Copeland.

The first-named respondent was represented by Mr T Sheridan, Peninsula Business Services Ltd.

The second-named respondent was represented by Mr C Hamill, Barrister-at-Law, instructed by Worthingtons Solicitors.

1.0	ISSUES

1.1	The issues for the tribunal to decide arose out of a service provision change following a decision by BT Plc to outsource facilities maintenance from the 
first-named respondent (“Vector”). The claimants at that time were employed by Vector.  Tenders were sought from various contractors including the second-named respondent (“Wallace”) who were the successful tenderers.  The issues which arose from the events around the service provision change in early 2011 were as follows:-

	(1)	Did Vector and/or Wallace fail to consult the claimants (or their representatives) in relation to any changes in  service provision, contrary to their obligations under Regulation 13 (and in particular, regulation13(2)(d)) of the Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006 (“the SPC Regulations”)?

	(2)	Did Wallace fail to give Vector the necessary information to allow it to discharge its duty to consult with the claimants contrary to Regulation 13(4) of the SPC Regulations?

	(3)	Did Vector fail to discharge its duty to provide employee liability information to Wallace contrary to Regulation 11 of the SPC Regulations?

	(4)	Did either Wallace or Vector fail to provide the relevant information to the claimants as required by Regulation 13(5)?

	(5)	Was the consultation which occurred between Vector and the claimants and between Wallace and the claimants sufficient to discharge the duty of Vector and Wallace respectively under Regulation 13 of the SPC?

	(6)	Were there any “special circumstances” which rendered it not reasonably practicable for (i) Vector or (ii) Wallace to perform its obligations under Regulation 13(9)?

	(7)	Given that Regulation 15(9) provides that the transferee shall be jointly and severally liable with the transferor in respect of any compensation ordered in relation to failure to consult under Regulation 13 of the SPC Regulations, is it appropriate for the tribunal to apportion liability in connection with such an award under the Civil Liability (Contribution) Act 1978?
 
(8)	(i)	Did the changes to working conditions proposed by Wallace constitute a substantial change which would result in a material detriment to the claimants contrary to Regulation 4(9) of the SPC Regulations?

		(ii)	If so, were the claimants entitled to treat their contract of employment as having been terminated and to treat themselves as having been dismissed by the employer contrary to Regulation 4(9)?

(9)	If the claimants were constructively dismissed by Vector, did they contribute to their dismissal?  If so, should the award in favour of the claimants be reduced and by how much?

2.0	THE FACTS

2.1	We had the benefit of receiving evidence from both the claimants, from Mr Danny McAuley of Vector, from Mr Graeme Wallace (Managing Director) and Mr Richard Hillis (Operations Manager) of Wallace.  Various documents in relation to the history of the matter were also opened to us.  In light of the evidence we have heard we make the following findings of fact.

2.2	The claimants were employed as Facility Operatives by Vector carrying out a mixture of work, but primarily employed on the maintenance of BT sites (telephone exchanges and transmitters) throughout the northern half of Northern Ireland.  When not involved on those maintenance duties  -  which included grass cutting, hedge cutting, cleaning up weeds and clearing the sites of any debris  -  they were usually engaged in work indoors at Telephone House in Belfast carrying out furniture removal, painting and general maintenance duties.  The claimants carried out landscaping and maintenance work on 106 out of 147 BT sites in Northern Ireland.  John McCann worked for Vector from 1 April 2002 until 31 March 2011 and was aged 56 at the date of termination of his employment.  His salary was £304.66 per week gross, £282.53 per week net.  His son, Jonathan McCann, worked for Vector from 10 April 2006 until 31 March 2011.  He was aged 28 at the date his employment ended and he too earned £304.66 per week gross, £282.53 net.  The claimants gave evidence that their work schedule involved them travelling from their respective homes at Crumlin, Co. Antrim to sites across Northern Ireland ranging from Larne in the east to Sheriff’s Mountain on the north-west side of Londonderry in the west.  The sites varied in size and in the work required.  Some required simply grass cutting, others required hedge cutting and maintenance around the site including cleaning the site.  They varied in size from a few hundred square metres (or even less) to the largest site at Aghalee which was over 5,000 square metres.  The claimants worked as a team and estimated that on average they worked on two sites per day, although they indicated that the larger sites sometimes required a full day.  The arrangement that they had with Vector was that they were paid for daily travel time of 45 minutes (each way) during their 40 hour working week.  If they were at a site some distance from home they finished earlier than 4.30 pm (their usual finish time) in order to reach home about the same time.

2.3	They used company vans which were kept at their home and they had use of this van outside of working hours.  Private health insurance was also provided for the claimants through BUPA and this was of particular interest to Mr John McCann who had had some health problems for a couple of years before the proposed service provision change.  Sites in the southern part of Northern Ireland were covered by Mr Ivan Crozier, who lived near Armagh and who covered the sites in the southern part of Northern Ireland as a one-man team.

2.4	In January/February 2011 a decision was taken by BT Plc to outsource facilities maintenance from Vector.  Tenders from various contractors were sought, including a tender from Wallace, which was the successful contractor.  It is accepted that on 25 February 2011 a meeting took place between the claimants, Mr Crozier and Danny McAuley, Vector’s Account Director in relation to the BT contract.  Mr McAuley confirmed that he had had no previous experience of TUPE transfers.  The meeting was attended by Danny McAuley and Margaret Tate on behalf of management, with Ann McMahon (as note taker).  The note of the meeting confirms that “the TUPE process” was explained to the claimants and Mr Crozier, they were advised that their jobs would transfer to Wallace from 1 April 2011 and that their terms and conditions (for example, leave, salary, etc) would carry over to the new company.  They were also told that redundancy did not apply in this situation as their jobs still existed.  They were told that they had a choice as to whether or not they transferred to the new company but if they did not choose to do so there would be no job available with Aramark (the trading name of Vector).

2.5	The handwritten notes of this meeting do not set out any other details of any explanation in relation to “the TUPE process” and it is not clear how much more explanation was given.  On the same date, letters were sent to the claimants from Vector confirming that there would be a transfer of their employment to Wallace.  The most relevant parts of the letter are as follows:-

		“It is a requirement of the Transfer of Undertakings Regulations that Wallace Contracts maintain the continuity of employment of existing employees engaged in work at that site.

		In summary, therefore, it is our view that your employment with Wallace Contracts will be continuous thus protecting your employment, holiday, sickness and all other terms and conditions of your employment and affording you the security that your service has earned under the legislation.

		In order that Wallace Contracts can correctly observe your terms and conditions of employment, we propose to forward to them sufficient information of your employment as such as contractual details relating to relevant dates of employment.  Pay details, copies of your contract statement and employee handbook. (sic).

		Should you have any questions to put to me I am more than happy to arrange a meeting with you to discuss this matter in greater detail.

		Yours sincerely

		Danny McAuley.”

2.6	The claimants met Graeme Wallace (Managing Director of Wallace) and Richard Hillis (Wallace’s Operations Manager) on 2 March 2011 to discuss the proposed move.  Mr Wallace referred in his evidence to an agenda which had been prepared for the meeting which was effectively an aide mémoire for him.  He confirmed that at the meeting he discussed with the claimants and Mr Crozier the fact that in Wallace, road salting and landscaping work were “hand in hand”.  The claimants would be expected to do some salt spreading during the winter for which they would get time and a half pay.  He also went on to tell them that he had had a look at some of the sites and that they would be moving landscaping work done by Wallace, for which they currently used sub-contractors, over to the claimants.  He indicated at that meeting that he would expect them to cover an average of four sites per day.  He also discussed the issue of travel time with them and told them that their existing staff were paid when they started work until they finished work, not for travel time.  He did indicate that there would be some flexibility if they were travelling to sites some distance away in that they would be allowed to start work at 8.15 or 8.30 am rather than at 8.00 am.  The claimants’ account of this was that he would require them to be on site at 8.00 am, otherwise they were not working and they were “no use to him”.  The claimants also indicated that they had full use of the vehicles for private use at weekends and out-of-hours.  Mr Wallace indicated that he had told the claimants that their insurance company would not cover for out-of-hours use or for a non-employee to drive the vehicle so they would have to look into this.  Mr Hillis’ evidence to the tribunal was that Wallace had two sites; one in Belfast and one in Bangor and they normally required staff to keep their vans at a secure location.  Normally, tradesmen kept the vans at the sites and collected the van each day.  He did mention there were a number of senior staff who were allowed to keep vehicles at home, depending on the role they were performing and whether they might be required to be called out at night.  He was not aware of the claimants being told that they would be required to keep their van at the depot, but this was the claimants’ clear recollection.

2.7	Also on 2 March, the claimants and Mr Crozier viewed Vector’s equipment with Mr Wallace and Mr Hillis, as Wallace had an option to buy this equipment.  Both the claimants and Mr Wallace and Mr Hillis confirmed that much of the gardening equipment was “past its best” and Wallace intended to buy new equipment.  Mr Wallace indicated to the tribunal that the equipment to be purchased would be much more powerful and therefore able to carry out grass cutting, for example, much more quickly than the previous equipment, hence his expectation that the claimants could complete four sites a day.  It was not clear as to whether the exact details of the equipment being purchased were clarified to the claimants.  The same day (2 March), Ann Wickens who was the personnel officer with Wallace, sent an 
e-mail to Ann McMahon at BT, asking for details of employment records for the claimants and Ivor Crozier.  She specifically requested employee training records, BUPA level of cover, confirmation that all holiday pay was paid up-to-date and that all payments for redundancy or pension were up-to-date.  She indicated that Wallace would only be responsible for the claimants from 1 April.  A further e-mail was sent on 16 March requesting the information again as it had not been provided.  Ann McMahon replied, indicating that the request had been passed to the HR Department.  On 18 March Alan Arkins, Payroll Manager with Vector, sent details of annual leave through to Ann McMahon and asked her to confirm that it was correct.  On 21 March, Ann Wickens again e-mailed Ann McMahon asking for the information she had requested.  Her e-mail stated:-

		“Our Operations Manager has been asking again this morning if your HR Department has come back to us.  These men are due to start with us on 1 April and we want to make sure we have everything from our end which we require.

		I have been asked if you can forward us a copy of their contract with terms and conditions.”

2.8	On 23 March at 11.55 Ann McMahon sent an e-mail to Ann Wickens attaching copies of training records and, finally, on 24 March at 8.23 am Ann McMahon forwarded the contracts for the claimants and Mr Crozier to Ann Wickens by e-mail.

2.9	In the meantime, the claimants had become aware that Mr Crozier had approached Mr Wallace at the meeting on 2 March to ask if they would consider him transferring to them as a self-employed sub-contractor, rather than as an employee.  There was a conflict of evidence between the claimants and Richard Hillis as to whether the approach for them also to “go self-employed” had come from the claimants or from Mr Hillis.  The claimant, Jonathan McCann, was adamant that the approach had come from Richard Hillis, whereas Mr Hillis indicated that the approach had come from the claimants.  From our point of view it is not fundamental to the issues which came first.  What is clear is that there was a telephone discussion between Mr Hillis and Jonathan McCann when the matter was discussed.  Jonathan McCann expressed an interest in going self-employed because, as he put it, he thought there might be more money for him and his father.  On that basis, Mr Hillis asked him to put this in writing and on 15 March a letter was sent to Mr Hillis, signed by both claimants and confirming they wanted to “go ahead as sub-contractors with your company.”

2.10	Jonathan McCann and Mr Hillis met at the Aghalee site in mid-March, as Jonathan McCann had outlined to Mr Hillis that there were some difficulties with vandalism on the site and to clarify why it took so long to maintain.  That meeting took place one evening, after the end of the working day.  Jonathan McCann asked Mr Hillis at that meeting if he had had time to consider a proposal for them to go self-employed and Mr Hillis indicated that it was still “under review”.  Mr Hillis sent an e-mail proposal to Jonathan McCann on 22 March 2011 at around 9.30 am and it is marked as “read” on 23 March 2011 at 9.22 am.  That proposal indicates that on the basis that the claimants would average four sites a day and carry out three visits to each site in the summer and one winter visit.  The contract would take approximately 21 weeks.  They also indicated that Wallace would require the claimants’ van to have Wallace Contracts livery to the same specifications as their own fleet, and a tracker would have to be fitted to the van for the purposes of data recording and to meet Health and Safety Regulations.  Wallace Contracts would supply all weeding moss control chemicals and other sites would be included should these continue in the contract.  Wallace offered the claimants £29,000.00 per year for that work.  In addition, they suggested that some other work would also be allocated to the claimants’ work programme at a cost of £8,000.00.  So the total contract value was £37,000.00 per year.  The e-mail finished:-

		“Given the proximity of the commencement date for this contract of 1 April we must ask for reply by COB this Thursday to allow us sufficient time to implement the necessary actions for you either becoming self-employed or coming over as direct WC Employees.  If you have any queries, please contact me directly.  Regards, Richard.”

	No response was sent by the claimants. It was their evidence that when they saw this offer they considered they would be much worse off, given that they would have to supply all their own equipment and transport costs.  The Wallace viewpoint was that the claimants would be able to carry out work for other clients and that their contract would take up only the equivalent of 21 weeks in the year.

2.11	Richard Hillis sent a further e-mail to the claimants on the evening of 23 March asking for a schedule of the visit cycle of the sites they currently visited for BT.  At 12.30 on 25 March, he sent a further e-mail to the claimants, pointing out that he had not received a reply to his e-mail of 22 March, despite the fact that he had asked for a reply by close of business the previous day.  He indicated that he had left several messages on both claimants’ mobile telephones and was having difficulty making contact with them.  He went on to say,

		“Given the fact that we commence the BT maintenance contract on Friday, 1 April, we would only hold the offer made below open until 9.30 on Monday morning.  After this time we will be placing the order for our own equipment and will process the necessary paperwork to transfer you across from Aramark to the direct employment of Wallace Contracts, commencing at 8.00 am on Monday 1 April 2011.  Regards, Richard.”  

	The claimants did not respond to this e-mail or to any other messages.  Although Mr Hillis’ e-mail clearly referred to the claimants transferring to Wallace as direct employees, no information was given to them at this time regarding the issues raised at the meeting on 2 March, including payment for travel time, the number of sites they would be expected to cover per day, private use of the van and health cover, or where the vans would be required to be stored.

2.12	Subsequently, the claimants requested a meeting with Danny McAuley.  Mr McAuley made a note of this meeting which he said occurred on Monday, 28 March 2011.  Mr John McCann’s evidence was that the meeting occurred on 24 March, but he was unclear as to exactly when it occurred.  Mr McAuley’s note is undated and it is not clear when he made the note.  On balance, we are satisfied that the meeting occurred on 28 March.  The gist of the conversation however was that the claimants indicated that they were not going to transfer to Wallace, and that they were seeking a redundancy payment from Aramark.  Mr McAuley explained to them that this was not an option as the job was still required: BT needed their sites landscaped and this would be carried out by Wallace going forward.  There was some discussion about the issue of redundancy.  Mr McAuley repeated that the claimants were in a different situation to some other Vector employees who had been made redundant, because the BT contract was still there, but under a different contractor.  Mr McAuley notes John McCann as saying they had sought legal advice and that they were entitled to redundancy.  He requested that Mr McAuley would meet with their adviser the next day.  Mr McAuley told them that he would be unable to meet the following day but if they had a grievance they should follow it up in writing and he would pass it on for consideration.

2.13	On the morning of 29 March, Richard Hillis e-mailed Ann McMahon indicating that Graeme Wallace had been advised by Danny McAuley that John and Jonathan McCann would not be transferring to Wallace on 1 April.  He asked for a list of the full addresses of all the Northern Ireland BT sites as they would need to identify the sites from the McCann’s route geographically.  He asked for her urgent response.  The same day, Ann Wickens e-mailed Graeme Wallace and Richard Hillis sending them details of BUPA Select cover for the claimants and dealing with the issue of how Vector had treated private use of vans for the claimants.

2.14	On 29 March, the claimants had received their P45 from Vector, having been told by Mr McAuley that they would finish their employment with Vector on 31 March.  The claimants sent a grievance letter to Vector the same day.  They alleged unfair dismissal from the company without proper notice, consultation or any discussion.  They also believed that they had been treated less favourably than other employees who had been made redundant the previous week.  They asked for more information in relation to the reasons for their dismissal.  

2.15	There was due to be a leaving party for the claimants and a Ray McBriarty on 31 March 2011.  Mr McAuley met the claimants together with Ann McMahon as note taker on 31 March at 12.00 noon shortly before the party.

2.16	Mr McAuley reiterated to the claimants that their jobs were still there but with Wallace Contracts.  The claimants said that they would not be moving to Wallace Contracts and that their legal adviser thought they had a good case for redundancy.  Mr McAuley indicated his concern that if they did not start with Wallace Contracts they would not have a job.  Both the handwritten and typewritten note of this meeting indicated that the claimants’ legal adviser was aware that TUPE applied but that he had told them “not to say anything” until they received a reply in writing.  The claimants also confirmed that they had been given the option to go 
self-employed or “straight employees” to Wallace.  Mr McCauley gave them a telephone number to allow them to contact the HR Department.  Ms Siobhán Dervan of the HR Department wrote to both the claimants on 1 April refuting the idea that they had been dismissed and pointing out that their role had been outsourced to Wallace Contracts after 1 April.  She indicated that the claimants had received their P45 due to the fact their employment had transferred to Wallace as of 1 April and that they would no longer be employed by Vector.

2.17	On 1 April at 16.53, Richard Hillis sent an e-mail to Danny McAuley in relation to any changes of employment contract which had been discussed with the claimants.  As far as relevant to the issues in this case, Mr Hillis indicated that they had discussed the issue of insurance for the vehicles for private usage and that Wallace had indicated they did not know whether they would be able to facilitate this when the claimants “came across”.  They indicated that they had been awaiting details of the existing contracts to clarify whether private usage was permitted.  They indicated that all company vehicles were fitted with Telematics tracking for lone working, Health and Safety and for data recording.  Mr Hillis’ e-mail also referred to the “self-employed” proposal and the lack of contact from the McCanns following that proposal being made.  He went on to say,

		“We have had no opportunity to discuss any specific employment contract details of Wallace Contracts as neither of the McCanns engaged in further conversation or meetings with ourselves”.

2.18	Following this a meeting was arranged on 8 April 2011 with the claimants, their adviser (Mr Copeland), Mr Hillis (on behalf of Wallace), Siobhán Dervan (by conference call), Danny McCauley, Margaret Tate and Ann McMahon in attendance as note taker.  The typewritten notes of that meeting are lengthy but in essence there was concern expressed by Mr Copeland on behalf of the claimants as to why they had been selected for “TUPE”, as he referred to it.  There was a long debate about the failure of the claimants to revert to Mr Hillis in relation to the 
“self-employed offer” and then concerns were raised by Jonathan McCann on the perceived increase in workload had they transferred to Wallace and concerns regarding allowances for travelling time.  Mr Hillis said on a couple of occasions that they had not had the opportunity to discuss terms and conditions with the claimants for moving to Wallace as employees.  He also indicated that confusion seemed to have arisen over the expression of interest in self-employment.  Mr Copeland requested redundancy payments for the claimants and it was again made completely clear to the claimants that they were not redundant and would not be entitled to a redundancy payment.  Both Siobhán Dervan and Danny McAuley reiterated that TUPE applied and that the claimants’ employment would transfer to Wallace.  Danny McAuley at one point indicated, “Nothing has changed.  Your positions are still there under TUPE to Wallace.”  Mr Copeland pressed on a number of occasions during that meeting for a redundancy payment to be made to the claimants but this was turned down empathically by Vector.  

2.19	Towards the end of the discussion, Jonathan McCann raised the question as to whether it was still open to them to transfer to Wallace as employees.  Mr Hillis said he would have to check as advertisements had been placed and this would leave Wallace with a problem of how to withdraw from that.  Mr Hillis was to clarify the position and revert to the claimants.  He wrote to both the claimants on 12 April to indicate that the claimants had indicated before the transfer of BT contract to Wallace that they did not wish to transfer.  Accordingly, their contract of employment terminated at the date of transfer and they had not transferred to Wallace.  

2.20	Following this, both claimants were out of work for a period of time.  Each of them indicated that they had made efforts to find employment but were able to produce only limited information on this to the tribunal.  They were pressed by Wallace’s representative as to why they had not considered setting up in business on a 
self-employed basis as gardeners, but Mr McCann Senior in particular indicated that he simply would not have the resources to do this. We accept the outlay involved in this would have been prohibitive from the claimants’ point of view.

2.21	Mr John McCann indicated he has been in receipt of Job Seeker’s allowance after his employment ended.  He had sought other work, but had been unwell for a period of time from approximately November 2012 until March 2013 and had been certified as sick.  He subsequently found a temporary job with Newtownabbey Borough Council carrying out gardening duties for six months from April 2013 and this was due to end at the end of September 2013.  While in that employment his gross pay for a month was £1,234.86 and his take home pay was £1,056.60, which is roughly £150.00 less per month take home pay than with the first-named respondent.  Jonathan McCann had not been successful in finding any alternative work.  He had received benefits, which he described as unemployment benefit for 26 weeks and then did not receive any benefit, as his partner was working.  We did not hear any evidence as to the amount of benefit which each claimant received, but their claim forms refer to Jobseekers’ allowance.  At the relevant time, the rate of Jobseekers’ allowance was £67.50 per week and rose to £71.70 from April 2012.  (source SSA website).

3.0	THE RELEVANT LAW AND DECISION

3.1	The law which relates to service provision change, where activities cease to be carried out by one person/body and are then carried out by another, is to be found in the Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006.  As is noted in the explanatory note to the regulations, the regulations are to be read in conjunction with the Transfer of Undertakings (Protection of Employment) Regulations 2006 which make provision for the treatment of employees and related matters on the transfer of an undertaking or business.  The two processes are often referred to colloquially as “TUPE transfers”.  The regulations for both processes are broadly similar.  This means that quite frequently, case law in relation to such issues as consultation and information in the context of a TUPE transfer will also be relevant in the context of a service provision change. 

	This is a complex and dynamic area of the law and so we set out below the legal structure which applies to this case. We have found it helpful to refer to 
Wynn-Evans, “The Law of TUPE Transfers” (OUP, 2013).  We invited the representatives of the parties to make submissions on the issues which arose in the case, but unfortunately we derived little assistance from their contributions.  In particular, they failed to clarify the full extent of the duty to inform and consult under Regulations 11 and 13.

	(1)	Duty to inform and to consult representatives.

		Under Regulation 11 of the SPC Regulations, a transferor employer must notify a transferee employer of “employer liability information” for employees who are to be assigned under a service provision change in writing or “by making it available to him in a readily accessible form”.  Under Regulation 11(2), employer information means:-

		(a)	Age and identity of the employee;

		(b)	Those particulars of employment that an employee is obliged to give an employee pursuant to Article 33 of the 1996 Order;

		(c)	Information of any (i) disciplinary procedure taken against an employee, (ii) grievance procedures taken by an employee within the previous two years in circumstances where the Employment (Northern Ireland) Order 2003 (Dispute Resolution) Regulations (Northern Ireland) 2004 apply.  Information must also be given in relation to any claims brought by the employee against the transferor within the previous two years or any claims which the transferor has reasonable grounds to believe may arise.

	The information to be provided under Article 33 of the 1996 Order is the information which must be in the employee’s written terms and conditions of employment.  These include details of when the employment began, pay, terms and conditions of employment, holiday entitlement, sick pay provision, pension schemes and various other matters, including a brief description of the work which the employee is required to do.

	Regulation 11(6) stipulates that a notification under this Regulation shall be given not less than 14 days before the Service Provision Change or, if special circumstances make this not reasonably practicable, as soon as reasonably practicable thereafter.

3.2	The duty to inform and consult representatives elected by the employees, arises under Regulation 13.  The relevant parts of this stipulate as follows:-

	“13	(1)	In this Regulation and Regulations 14 and 15, references to affected employees in relation to a service provision change, or to any employees of the transferor or the transferee (whether or not assigned to the organised grouping of resources or employees that is the subject of the service provision change) who may be affected by the change and may be affected by measures taken in connection with it and references to the employers shall be construed accordingly.  

		(2)	Long enough before a service provision change to enable the employer of any affected employees to consult the appropriate representatives of any affected employees, the employer shall inform those representatives of –

			(a)	the fact that the change is to take place, the date or proposed date of the change and the reasons for it;

			(b)	the legal economic and social implications of the change for any affected employee;

			(c)	the measures which he envisages he will, in connection with the change, take in relation to any affected employees or, if he envisages that no measures will be so taken, that fact; and

			(d)	if the employer is the transferor, the measures in connection with the change which he envisages the transferee will take in relation to any affected employees who will become employees of the transferee after the change by virtue of Regulation 4 or, if he envisages that no such measures will be taken, that fact …

			(4)	The transferee shall give the transferor such information at such a time as will enable the transferor to perform the duty imposed on him by virtue of paragraph (2)(d).

			(5)	The information which is to be given to the appropriate representatives shall be given to each of them by being delivered to them, or sent by post to an address notified by them to the employer, or (in the case of representatives of a trade union) sent by post to the trade union at the address of its head or main office …

			(9)	If in any case there are special circumstances which render it not reasonably practicable for an employer to perform a duty imposed on him by any of paragraphs (2) to (7) he shall take all steps towards performing that duty as are reasonably practicable in the circumstances …”

3.3	Regulation 14 provides for the employers to facilitate an election of representative(s) for the employees who will consult with the employees on their behalf.

3.4	The relevant case law is extremely helpful in clarifying the extent of the obligation to provide information and to consult under Regulation 13(2)(d).  The information to be provided to affected employees is a wide concept.  It is generally assumed to cover dismissals or changes to terms and conditions or other variations in terms of working patterns, working methods or the location which can affect the employees in question.  In Institution of Professional Civil Servants  v  Secretary of State for Defence [1987] IRLR 373, CH, Millett J described the term “measures” as “a word of the widest import” which includes any action, step or arrangement, while “envisages” simply means “visualises” or “foresees”.  Despite the width of these words, it is clear that manpower projections may not be measures; although positive steps to achieve planned reductions in manpower levels otherwise than through natural wastage would be.  While general and unspecific intentions to review the situation may not be measures which the employer envisages and will therefore not give rise to the obligation to consult, some relatively clear plan or proposal which has been formulated or which the employer has in mind to implement would give rise to the obligation to consult, even if the plan is not finalised or definite. 

	The breadth of the duty is emphasised in Todd  v  Strain and Others [2011] IRLR 11 EAT, where the transferor employer had failed to notify staff of administrative changes in relation to pay dates brought about by the transfer of the business occurring mid-month.  Mr Justice Underhill noted that,

		“The regulations do not prescribe that any effect must be disadvantageous in order to trigger the requirement to consult… it is not difficult to imagine how any changes in pay arrangements with which employees are familiar, and all the more so in the context of the change of employer, is liable to be unsettling; and part of the purpose of the duty to consult will surely be to enable transitional arrangements of the kind adopted here to be explained to employees and for them to be reassured, if this will be the case, they will not in any way be prejudiced by them”.

3.5	In this case, the relevant staff of neither Wallace nor Vector had had experience of a service provision change.  The whole process seems to have been somewhat haphazard.  There were two particular issues which caused difficulties and confusion.  The first was the failure of Vector to provide information in relation to employee liability to Wallace within 14 days prior to the proposed Service Provision Change on 1 April as they should have done under regulation 11.  The information which they should have provided by roughly 15 March, was not in fact provided until 24 March and therefore delayed Wallace’s ability to respond to the claimants in relation to the changes they envisaged regarding working conditions for the claimants.  The other issue which undoubtedly caused some confusion was the consideration of the claimants moving to “self-employed” status.

3.6	The SPC regulations place the obligation on the transferor to provide information to the representatives of the affected employees of the measures it envisages the transferee will take in connection with the transfer to its employees.  Regulation 13(4) in turn requires the transferee to provide the necessary information to the transferor “at such a time as will enable the transferor to perform its duty to inform the appropriate representatives of the measures which the transferee envisages taking in respect of the transferring employees.”  This will require detailed consideration by the transferee of the measures it intends taking.  In this case, Vector appears to consider that it has discharged its obligations by setting up a meeting for the affected employees with Wallace.  Wallace provided some information to the transferees as to the changes it proposed making at the meeting on 2 March, but this information was incomplete.  It is clear that Wallace envisaged the claimants and Mr Crozier assuming a greater workload then had been previously the case.  However, they explained to the tribunal that this was because they would provide better equipment which would be able to get through the work more quickly.  It seems to us on the balance of probabilities that the claimants were advised that Wallace would be buying new equipment.  It is not clear that they were definitely told that they would be provided with equipment which would be markedly more efficient than the equipment they have previously used.  We are satisfied that Wallace advised the claimants that they would be required to be on site at 8.00 am or shortly afterwards in the case of sites some distance from home and that they would not be paid for their travelling time.  Initially, they were told by Wallace that they would not have private use of the vans at weekends and after hours and, given that their other staff had to collect their vans at the Belfast depot or the Bangor depot, we are satisfied that the claimants were also (at least initially), advised that they would in all likelihood be asked to collect their vans from the depot each day.  We accept that Wallace indicated that they would check out the insurance position in relation to this, but it is also clear that they never reverted to the claimants to discuss this matter further. 

	Regulation 13(5) provides that information to be passed to the employee’s representative for the purposes of consultation is to be delivered to them or sent to them by post.  As Wynne-Evans notes, although it is not expressly provided that the information is to be in writing, that is the clear implication of the wording of regulation 13 (5).  At no time in the process adopted by Vector and Wallace did either of them write to the claimants in relation to the changes envisaged by Wallace in their working conditions as employees.  The only correspondence, apart from the initial letter from Vector telling them they were transferring to Wallace, was Mr Hillis’ letter setting out the proposal for self-employment.

	The obligation in relation to this matter is clearly on the transferor, on the basis of information provided by the transferee.  It should also be noted that under Regulation 13(6), consultation is expressly required to be conducted “with a view to seeking… agreement”.  Under Regulation 13(7), the employer is required “in the course of those consultations” to consider any representations made by the appropriate representatives, to reply to them and if it rejects any of those representations, to state his reasons for doing so.  We note the comments made by Mr Justice Underhill in Todd  v  Strain, indicating that part of the purpose of the duty to consult must surely be to enable transitional arrangements to be explained to employees and for them to be reassured that they will not in any way prejudiced by them.

3.7	Regulation 14 provides for the employers to facilitate an election of representative(s) for the employees who will consult with the employees on their behalf.  Mr Copeland also referred to the obligation to have a representative of the employees elected which the transferor employer here failed to do.  In the circumstances, and particularly given that there was a small number of employees involved and that individual consultation was perfectly feasible, we do not consider this to be a major issue in this case, if all other steps in relation to consultation had been carried out fully and effectively.

3.8	Taking questions 1-5 together, we consider that Wallace and Vector failed to comply properly with their duty to consult with the claimants. It was not a complete failure, but it was at a level which compounded the misunderstandings which developed.  Vector had a duty to pass on relevant employee information to Wallace under Regulation 11 SPC, which it did not comply with within the 14 day timescale required in SPC.  Indeed the contracts for the claimants were only forwarded on 29 March, 2 days before the proposed transfer date.  This led, at least in part, to Wallace failing to pass on to the claimants- either directly or via Vector, as required by regulations 13 (2)(d) and 13 (4) – their proposals for “measures” which would affect the claimants.  In particular, the measures which concerned the claimants were the requirement that they would be on site each day at 8 am or shortly after, rather than being paid for 45 minutes travelling time (each way) within each working day, health insurance, being asked to store their vans at Wallace’s depot and linked with that, the indication that they would no longer have private use of the company vans and would have a tracker fitted to the van. 

	We appreciate that the issue of the claimants working for Wallace as self-employed contractors may have diverted the attention of both the claimants and Wallace from their obligations under the SPC Regulations.  It was however a red herring and should not have prevented Wallace from working with Vector to comply with its duties under the SPC Regulations. We also note that at least twice Mr Hillis said in his emails to the claimants that they could transfer as employees, but he did not set out Wallace’s proposals about the issues of starting time, workload, health insurance and private use of vans which had previously been raised.  At no time did either Wallace or Vector write to the claimants as required by regulation 13(5) to confirm their final view on these proposed measures and to invite consultation.  The meeting of 5 March had raised these issues, but Wallace were to revert to the claimants to discuss them and did not do so.  Mr Hillis said in an email to Danny McAuley that they had not had the “opportunity” to discuss terms and conditions of employment with the claimants.  He had not made any opportunity, nor had he (or Vector) sent an email or a letter to the claimants, setting out what they proposed.  It was not discussed either before the transfer date or at the meeting on 8 April.  Accordingly, we find that there was a failure on the part of both Vector and Wallace to comply with their consultation obligations under Regulations 11 and 13 SPC.

	(2)	The “Special circumstances “ defence

		Regulation 13(9) provides that if there are special circumstances which render it not reasonably practicable for an employer to perform a duty imposed on him by paragraphs 13(2)-3(7), he shall take such steps towards performing that duty as are reasonably practicable in the circumstances.  Wynn-Evans makes it clear that special circumstances apply to an event which is “unforeseeable” and outside the normal run of commercial events, and not simply to lack of time.  Mr Hamill invited us to consider that Wallace could avail of this defence, because he considered they had done everything they could and the responsibility for failure to consult fell to Vector, which had failed to pass on employment details to Wallace promptly.  It is clear, however that this is not the proper use of the special circumstances defence. Wynn-Evans makes it clear that the type of situation envisaged is not simple failure to act, but a failure which occurs because of something which is outside the normal course of business, such as the insolvency of the company concerned.  We find that this defence is not applicable in this case.

	(3)	Compensation

		Regulation 15 provides a remedy in relation to failure to consult by way of a complaint to the industrial tribunal.  The tribunal may order the transferor to pay appropriate compensation to any employees specified in the award.  Regulation 15(9) provides that the transferee shall be jointly and severally liable with the transferor in respect of compensation ordered.  The “appropriate compensation” is defined in Regulation 16(3) as such sum not exceeding 13 weeks’ pay for the employee in question as the tribunal considers just and equitable, having a regard to the seriousness of the failure of the employer to comply with his duty to consult.

3.9	If a breach of Regulation 13 is established, then the tribunal is obliged to make a declaration to that effect and award compensation to the affected employees against the transferor or the transferee as the case may be.  While the legislation stipulates that the appropriate compensation shall be a sum “not exceeding 13 weeks pay”, the tribunal must award the sum which it considers “just and equitable” having regard to the seriousness of the failure of the employer to comply with his duty.  In this context a week’s pay is not subject to the statutory cap, which at the relevant time was £430.00 per week.  The principles to be applied by the tribunal are those in the analogous legislation relating of TULRCA 1992.  The relevant principles were set out by Lord Justice Peter Gibson in Susie Radin  v  GMB and Others [2004] ICR 893, CA.  In that case he noted that the purpose of the award was to provide a sanction for breach, not to compensate employees for consequential loss.  He noted that the employment tribunal had a wide discretion as to what was just and equitable and that the employer’s default might vary from the technical to a complete failure to inform and consult.  In Todd  v  Strain, the Employment Appeal Tribunal reduced the award made by the Employment Tribunal for breach of Regulation 13 from the maximum of thirteen weeks’ pay per employee to seven weeks pay on the basis that the failure was not at the most extreme end of the scale so as to justify a maximum award.  They specifically contrasted the employer’s conduct in the case of Sweetin  v  Coral Racing Ltd [2006] IRLR 252, EAT where there had been no information or consultation at all with that in Todd, where as least a meeting had been held with a significant proportion of the workforce and some basic information given out including that the transferee would not be reducing staff while changing some terms and conditions.

3.10	In relation to the issue of joint and several liability, it is noted that the transferee is jointly and severally liable with the transferor in respect of certain awards of compensation in respect of breach of the information and consultation obligations imposed by Regulation 13.  Mr Hamill invited us to consider apportioning liability under the Civil Liability (Contribution) Act 1978.  His submission in this respect is wrong, according to the case law.  It is clear from the decisions in London Borough of Hackney  v  Sivanandan [2011] IRLR 740, EAT and a further decision of the Employment Appeal Tribunal in Brennan and Others  v  Sunderland City Council and Others, that an Employment Tribunal has no jurisdiction to determine claims for contribution under the Civil Liability (Contribution) Act 1978.  The EAT noted in Brennan that the 1978 Act is concerned only with claims justiciable in the ordinary Courts.  The legislator had simply failed to consider the question of contribution in the context of liability for unlawful discrimination and since the right to contribution is a creature of statue, the EAT was not in a position to repair that omission.

3.11	Given our finding at para 3.9 above, we declare that there has been a breach of the duty to consult and that it would be just and equitable in this situation to make an award of 7 weeks’ pay to each of the claimants.  We order the respondents to pay to the claimants the sum of £2132.62, representing 7 weeks’ gross pay (£304.66  x  7  =  £2132.62) and we affirm that the respondents are jointly and severally liable for this award.

	(4)	The effect of Service Provision Change on the claimants’ contracts of employment

		The relevant regulation is Regulation 4 of the SPC Regulations.  This provides as follows:-

			“4	(1)	Except where objection is made under paragraph 7, a service provision change shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the service provision change, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee…

				(7)	Paragraphs (1) & (2) shall not operate to transfer the contract of employment and the rights, powers, duties and liabilities under or in connection with of an employee who informs the transferor or the transferee that he objects to becoming employed by the transferee…

				(8)	Subject to paragraphs (9) and (11), where an employee so objects, the service provision change shall operate so as to terminate his contract of employment with the transferor that he shall not be treated, for any purpose, as having been dismissed by the transferor.

				(9)	Subject to Regulation 9, where a Service Provision Change involves or would involve a substantial change in working conditions to the material detriment of a person whose contract of employment is or would be transferred under paragraph (1), such an employee may treat the contract of employment as having been terminated, and the employee shall be treated for any purposes having been dismissed by the employer…”

3.12	As an additional claim to the claim in relation to failure to consult, the claimants allege that they had been unfairly dismissed by the employer contrary to Regulation 4(9) of the SPC Regulations.  Wynne-Evans comments on Regulation 4(9) that it creates the possibility of a claim effectively of constructive dismissal based on substantial and materially detrimental changes to working conditions, separate from the “traditional” common-law test based on repudiatory breach of contract.  It is significant, however, that while the regulation classifies a resignation under Regulation 4(9) as a dismissal, the tribunal still needs to satisfy itself that an employer has acted unreasonably and there must be a substantial change in working conditions which is detrimental to the employee.  In Tapere  v  South London and Maudsley NHS Trust [2009] IRLR 972, the Employment Appeal Tribunal considered the question of “working conditions” in the context of European Case Law and in particular Merckx and Neuhuys  v  Ford Motors Belgium SA [1996] IRLR 467, where salesmen were transferred to a new dealership at a different workplace without any guarantee as to client base or sales figures so that there was a potential adverse impact on their commission.  They noted that in Tapere the employee was required to relocate to a new place of work which she considered detrimental, not least in terms of increased travel time.  In Nationwide Building Society  v  Benn and Others (UKEAT/0273/09), the claimant employees were moved from the Portland Building Society to the Nationwide Building Society.  Job responsibilities and roles were downgraded as they were assimilated into their new posts.  The new bonus scheme in which they participated was substantially less beneficial in their previous scheme.  The EAT upheld the decision of the Employment Tribunal that the material changes in the jobs which the claimants were to perform and in one case, a reduction in bonus, quickly led to the conclusion that the claimants had been dismissed by application of Regulation 4(9).

3.13	In University of Oxford  v  Humphries (2006) IRLR 183 (CA), an employee terminated his contract in advance of a relevant transfer because the terms of employment which the transferee intended to impose on him would have been significantly to his detriment.  The Court of Appeal held that the right to object to the transfer is separate from the free-standing right to terminate employment without notice in response to a substantial detrimental change to working conditions.  The claim which was being made in that case by the employee prior to transfer could lie only against the employer at the relevant time, i.e. the transferor.  Although this case was decided in 2000, the SPC Regulations 2006 do not address this issue and do nothing to remove liability from the transferor in the circumstances where, as Wynn-Evans notes, it is arguable that it is the transferee which creates the problem.  The issue of a change of location, involving increased travelling time was specifically considered by the Employment Appeal Tribunal in Abellio London Ltd  v  Musse and Ors and Centrewest London Buses Ltd [2012] IRLR 360 EAT.  The employees concerned worked on a bus route which was transferred to Abellio by way of service provision change.  Abellio intended to relocate the drivers to its Battersea depot, which would involve one or two hours additional travel each day for the affected staff.  The employers were held by the Employment Tribunal to be entitled to terminate their employment on the basis that the change of location was a substantial change of their working conditions to their material detriment.

3.14	In this case, as we have noted above at paras 2.6 and 2.7, Wallace had indicated that they intended to make some changes to the working conditions of the claimants.  In particular, it was envisaged that they would have to be on site and at work at 8 am, their start time, rather than being allowed 45 minutes travel time at each end of their working day to get to the sites for which they were paid.  They had been told there would be flexibility of 15 or 30 minutes to get to the more distant sites, but that was all.  They had also been told that they would probably have to keep their vans at Wallace’s premises and would not be allowed to use them for private use, or indeed have them to travel to and from the depot.  This was for insurance reasons and the claimants were never advised of any change to this position.  A query had also been raised about health insurance and the claimants were never given any confirmation that their health insurance would remain as before.  We are satisfied that the employer acted unreasonably in failing to ensure that Wallace were fully aware of the claimants’ working conditions and we believe that the changes envisaged by Wallace were not properly clarified or negotiated with the claimants.  Applying the case law as set out in Abellio, we are of the view that changes which effectively would extend the claimants’ working day by up to 1.5 hours and would also deprive them of the benefit of a company vehicle constitute substantial changes to the material detriment of the claimants contrary to Regulation 4 (9).  We find that these changes are such that the claimants were entitled to resign in respect of them and claim unfair dismissal.  Given that Vector was their employer at the time, we must find that Vector is liable for any award we make in favour of the claimants (University of Oxford v Humphries).

3.15	(5)	Contributory fault

		Before setting out our calculation of the award, we must also take into account any deduction we should make for contributory fault and for the claimants’ efforts to mitigate their loss. It is clear to us that at least part of the confusion in this matter stemmed from the claimants’ request to be considered for self-employed status with Wallace and their failure then to respond to the offer put to them by Hr Hillis on behalf of Wallace.  Their failure to reply in any way simply added to the confusion, rather than clarifying the offer which had been made, which may have lessened their feeling that they were being “insulted”.  The position was exacerbated by the claimants’ insistence that they were entitled to a redundancy payment, which they were not.  The advice they had been given was seriously flawed in this respect.  On this issue it seemed to us from the evidence we heard that it was Jonathan McCann who was keener on the self-employed option than his father, and who pushed most on the redundancy payment.

		The other matter we need to consider is the issue of mitigation of loss.  There is an obligation on a claimant to make proper efforts to find alternative work, to reduce his loss.  While we do not consider that it was feasible for the claimants to set up their own business, it would have been possible for them to look for alternative work.  John McCann clearly had made considerable efforts to find other work, and we acknowledge that he was coping with dyslexia, which made form filling challenging.  He was also certified as sick from November 2012 until February 2013.  He then sought and obtained employment as a gardener, although it was temporary in nature.  We have decided that it would be appropriate to reduce the compensatory award to Jonathan McCann by 60% and to John McCann by 40% in light of these considerations.

		We order the first-named respondent to pay the following sums to the claimants.  We make no award for future loss as the claimants were dismissed in March 2011.

		John McCann

		Aged 56 at the date of dismissal and had 9 years’ service.

		Basic award

		Gross weekly pay £304.66

		£304.66  x  9  x  1.5  =  		   £4,112.91

		Compensatory award

		Net pay £282.53

		From 1 April 2011 to 10 September 2013  -  128 weeks

		£282.53  x  128  =   		 £36,163.84

		Loss of statutory rights 		      £500.00

		Less earnings 
		April  -  September 2013  -  £1,056.60  x  6  =   	  £6,339.60

		Period unfit for work 

		November 2012 to February 2013  -  16 weeks’
		@ £282.53 per week =      	  £4,520.48

		Sub-total                  	£10,860.08

		Compensatory award before reduction       		 £25,803.76

		Apply 40% reduction            		 £10,321.50

		Balance Compensatory Award:	£15,482.26

		Total award for unfair dismissal    		 £19,595.17

		The Recoupment Regulations apply.  The first-named claimant received Jobseeker’s allowance from 1 April 2011 until 1 April 2013 and this is the protected period.  The amount of the compensatory award which relates to this period is £19,095.16 and the compensatory award exceeds this by £500.01.

		Jonathan McCann

		Aged 28 at date of dismissal and had 4 complete years’ service.

		Basic award

		Gross pay £304.66  x  4  x  1  =		   £1,218.64

		Compensatory Award

		Net pay £282.53  x  128 weeks (as above)		 £36,163.84

		Loss of statutory rights                                 		      £500.00

		Apply 60% reduction                    		 £21,998.30

		Balance Compensatory award     		 £14,665.54

		Total award for unfair dismissal    		 £15,884.18

		The Recoupment Regulations apply.  The second-named claimant received benefits from 1 April 2011 until 30 September 2011 and this is the protected period.  The amount of the compensatory award which relates to the protected period is £4,407.46 and the compensatory award exceeds this by £11,476.72.

This is a relevant decision for the purposes of the Industrial Tribunals (Interest) Order (Northern Ireland) 1990.

Chairman:

Date and place of hearing:      11-13 June 2012 and 9-10 September 2013, Belfast.

Date decision recorded in register and issued to parties: