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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Henry & Ors v London General Transport Services Ltd [2000] UKEAT 1397_97_3011 (30 November 2000) URL: http://www.bailii.org/uk/cases/UKEAT/2000/1397_97_3011.html Cite as: [2000] UKEAT 1397_97_3011

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APPEARANCES

 

For Mr C Henry and others	MR JASON GALBRAITH-MARTEN (of Counsel) K Zaman Ali & Co Solicitors 441A Brixton Road London SW9 7DG
For London General Transport Services Ltd	MR IRVINE MACCABE (of Counsel) Messrs David Wagstaff & Co Solicitors Treviot House 186-192 High Road Ilford IG1 1LR


 


MR JUSTICE LINDSAY (PRESIDENT):

1. We have before us two appeals and a cross-appeal. They are concerned with problems arising where a Union agrees some changes with an employer which appear to render the employees' terms and conditions of employment less favourable than the employees have been used to, where the majority of the employees affected agree to the new terms and where all of them are paid on and work those new terms but where a minority, a good deal later present IT1s claiming that they were suffering unlawful deductions from their wages because (they say) the new terms had never been agreed but rather had been unilaterally imposed.
2. Before we turn to the facts or the law we first look at such a position more generally. It is, of course, not uncommon for companies to recognise, if they are to obtain particular contracts or, in more extreme cases, even stay in business, that economies need to be made, some or all of which will lead to reduction in the numbers employed or to adverse changes to the rates or terms of employment or to both such reductions and such changes. Perhaps because of a growth in competitive tendering or in management - or management and employee - buy-outs (MEBOs), it has become common for employers, often with a view to tendering for critical contracts, to seek to establish, sometimes over only a short time frame, what lesser terms and conditions of employment other than the existing ones would be acceptable to whatever large workforce is concerned.
3. In such situations the involvement of one or more Unions is not only helpful but essential; the alternative prospect of the negotiation of hundreds or thousands of individual agreements, even if possible to be done in blocks, would be so cumbersome and potentially so divisive that deals vital to the continuation of employment could in the meantime be lost. In our view the law, if it is possible to do so consistently with principle, should recognise the exigencies of commercial life and do nothing to discourage collective bargaining in such cases. Moreover, where a majority of employees have approved new and less advantageous terms of employment and have thus made sacrifices so that their employer could obtain work or stay in business and keep up the employment of its existing staff, there can be an unattractive moral dimension where some only, a minority, of the workforce later claim that they are still entitled to be paid at the former and higher rate. In a sense the minority would in such a case be seeking to take advantage for themselves of the continuing employment that had been safeguarded or procured by the sacrifices made by their fellows in the majority. It would be easy to imagine any such situation leading to a degree of divisive bitterness amongst the majority, a state hardly conducive to good industrial relations.
4. Yet, against such practical need for a speedy and reliable collective response, there is a need also to ensure that individuals are adequately informed and adequately consulted and that the less attractive terms are not imposed unfairly or without a real opportunity to protest against or reform or refuse them. As in so many areas of the law, a balance needs to be struck. The appeals and cross-appeals before us may, very broadly, be said to be concerned with whether the Employment Tribunal erred in law in arriving at the particular balance which it struck.

THE PRINCIPAL FACTS

5. As for the facts, in late 1994 the London General Transport Services Ltd (which we shall call "the Company") employed some 1500 persons as staff (although there seems to be some dispute as to whether that was 1500 staff or 1500 persons as "platform" staff, namely bus drivers and perhaps also - it matters not for immediate purposes - conductors). The staff worked out of different garages. For present purposes we are concerned only with the Company's Putney platform staff and its Stockwell platform staff.
6. Before us, Mr Maccabe appeared for the Company and Mr Galbraith-Marten for the applicant-employees. Neither had appeared below.
7. The T & GWU had, during the days of the closed-shop, been the only Union for platform staff at the Company and that Union had thereafter been the only Union recognised by the Company in relation to platform staff. As the Employment Tribunal said:-

"There had been at least one annual round of negotiations and in some years other negotiations had also taken place. These had resulted in agreements which had been both beneficial and detrimental at different times to the staff."

8. From 1993 at the latest the privatisation of the Company had been a real possibility and the Company's then management, with a view to a MEBO, formed a company, Mokett Limited, as a vehicle to consider, and if possible make a bid for the issued share capital of the Company. To judge from the witness statement of Mr Elms, Operations Director of the Company, on a subject on which it does not seem that he was cross-examined, it was thought that the purchase of the shares in the Company would be a good investment for all those taking part but that, in order to secure the future survival of the Company in the event that the MEBO was successful, it was necessary to change the terms and conditions of the platform staff. Changes to the employees' terms and conditions were going to be necessary. The Company had substantially to reduce costs to meet the repayment requirements of the financial institutions that were to back the MEBO.
9. Thus it was that by the Summer of 1994 the Company's management had entered into negotiations with the T & GWU. The Tribunal held that it had appeared that the T & GWU were supportive of a management buy-out. The Tribunal held:-

"The T & GWU held work place meetings at which the terms of the proposed agreement were on the Agenda. No ballot of staff was held although ballots had on previous occasions been held and furthermore, not all the staff were able to attend the meetings as they worked on a shift/rota basis and therefore it was impossible for staff to attend at one mass meeting."

10. On the 12th August 1994 an agreement called "the Framework Agreement" was signed by Mr Elms as Commercial Director on the behalf of the Company on the one hand and by Mr Mahon, District Officer, on behalf of the T & GWU. The agreement was conditional upon Mokett's management buy-out bid being successful. We shall need to return in more detail to the terms of the Framework Agreement.
11. The Tribunal held:-

"The T & GWU informed the Respondent that the majority of staff had consented to the terms of the Framework Agreement."

There is no suggestion in the conclusions of the Tribunal or, as it would seem, in the written evidence or in the Chairman's Notes of evidence, that it was untrue that the majority of staff had consented to the terms of the Framework Agreement or that the T & GWU was acting other than bona fide in informing the Respondent as it had.

12. The Tribunal held that, having secured the Framework Agreement, the vehicle for the MEBO, Mokett Limited, then put in a bid for the shares in the Company. It was known that there was a rival bidder but Mokett's bid was successful. On the 2nd November 1994 Mokett acquired the share capital of the Company; the change in the Company's ownership was notified to staff but the staff, of course, continued to be employed by the Company. In December 1994 the Company's staff newsletter entitled "In General" explained the buy-out deal and the extent of borrowing. It also made the point that changes in working practices would have to be made as it was going to be vital that profits were improved sufficiently to pay back the banks.
13. The new terms and conditions which had been agreed between the Company and the Union in the Framework Agreement were introduced at different stages; so far as concerns Stockwell Garage they applied from the 5th November 1994 and as to Putney Garage from the 7th January 1995. Different staff members were affected in different ways by the new terms but all of the Applicants suffered, inter alia, reductions in remuneration of differing amounts as a result of the change in their terms and conditions of employment.
14. Prior to the changes becoming effective a notice had been displayed at the respective places of work of the staff, a notice outlining the changes in pay and conditions for platform staff. The principal changes, held the Tribunal, were to rates of pay, hours of work, holidays and holiday pay, sick pay and overtime pay. All of the staff were asked to sign individual statements of changed terms and conditions but of the Applicants only one was known to have signed such a statement. The Tribunal held that on the 7th November 1994 the Company received a petition signed by in excess of 130 staff at the Stockwell Bus Garage expressing, as the Tribunal found it to be, "Their dissatisfaction with the new terms and conditions but stating that they would continue to work under protest".
15. A second petition was presented to the company on the 17th December 1994 from staff at the Stockwell Bus Garage, again signed by some 130 staff (including some who had signed the first petition) and saying that they had not voted for the new terms and conditions and, as the Tribunal held it to be, asking for a ballot. No ballot was held. We shall need to return to the Stockwell petitions later in more detail.
16. In July 1995, the Tribunal held, some 127 staff at the Putney Garage signed a petition complaining about the new terms and conditions being imposed upon them without their consent but that petition was not delivered to the Company until the latter half of September 1995.
17. As for the launching of proceedings the Tribunal said:-

"All of the Applicants had issued Industrial Tribunal proceedings making complaints of unlawful deductions from wages. The vast majority of these were presented in November and December 1996. Two were presented in 1995 and the remainder in the first few months of 1997."

The Tribunal observed that not all of the Applicants had signed one or other of the petitions.

18. So far as concerned their claims for unlawful deductions from wages, the 33 applicants who worked out of the Putney Garage failed. As to them the Tribunal said that it was satisfied that by continuing to work without protest from January 1995 until September 1995 (when their petition was presented) they had elected to affirm the amended terms and conditions of employment. However, the 61 who worked out of Stockwell succeeded. But both those classes together, only of the order of 94 individuals or so, represented, as it would seem, only a little more than 6% of the 1500 staff, the balance of whom, as it would seem, had, reluctantly or otherwise, accepted the terms of the Framework Agreement. A little confusingly, whereas all the applicants who had worked out of the Putney Garage were described as being signatories to the Putney petition, there is no comparable finding in relation to the applicants who worked out of the Stockwell Bus Garage, some of whom, presumably, therefore had not signed any petition. The Tribunal's observation that not all applicants had signed one or other of the petitions presumably therefore relates to some members of the Stockwell staff.
19. It was common ground that the "old" terms and conditions of the platform staff had not included any term that automatically or in any other stipulated way incorporated terms and conditions from time-to-time agreed with the Union. Nor was it the case that the Framework Agreement itself was expressly referred to in any individual's contract of employment.

THE TRIBUNAL'S DECISION

20. The Applicants' IT1s came on for hearing on 3 days in October 1996 before the Tribunal at London (South) under the Chairmanship of Mr R. Peters. With few exceptions the complaints of breach of contract were rejected as being outside the Employment Tribunal's jurisdiction (because at the date of presentation of the IT1s the claimants were still in the Company's employ). There is no appeal as to that. As we have mentioned, the complaints from the Putney Staff as to deduction of wages failed, but those of the 61 who worked out of Stockwell succeeded.

THE APPEALS

21. The Company presented a Notice of Appeal, later amended, and the Applicants a cross-appeal. Mr Galbraith-Marten did not argue that the Tribunal's conclusion as to the affirmation of the new contracts by the Putney staff was wrong and, although argument ranged beyond these next subjects, the chief arguments we received were directed to the following subjects, namely, in summary:-

(i) On the cross-appeal, whether the terms of the Framework Agreement were such as to be capable of incorporation into employees' individual contracts; and on the appeal;

(ii) As to where the onus of proof lay when the Tribunal was determining what the employers' contractual terms were for the purposes of deciding whether the Applicants were or were not suffering deductions from their contractual rates of pay;

(iii) The rôle of custom and practice in relation to the incorporation into the individual Applicants' contracts of terms agreed between the Company and the Union by way of the Framework Agreement; and

(iv) Whether the Stockwell Applicants had accepted the new and less advantageous terms (in particular by reason of their working to them and accepting the lower rates of pay) over the period of almost two years from their introduction to the presentation of the IT1s or whether they had, by way of protest, kept alive their ability to insist on employment under the "old" terms.

We shall take these points in turn.

THE CROSS-APPEAL

22. The Framework Agreement was made between the Company and the T & GWU on the 12th August 1994. Its front page announces that it concerned "Changes to pay and conditions of service for platform staff in the event of the MEBO bid being successful". It contemplated that, if and when the MEBO bid was complete, further discussion would take place as to a detailed time-scale for its implementation. It stated that the new pay and conditions would be largely based on the existing negotiated contract pay and conditions structure. It then had detailed headings such as "Hours of work", "Consolidated rates of pay", "Holidays and holiday pay" and as to sick pay, overtime, rostering and other subjects, all including detailed provisions of the kind described by the respective headings. It concluded:-

"It is recognised that this Framework Agreement is not fully comprehensive and deals only with the principle [sic] areas of change. However, some areas which have not been changed have been included for the sake of clarity."

And it mentioned the need for a later review of all existing operating agreements.

23. At the Employment Tribunal the Applicants argued that its nature was such that it was not suitable for incorporation into contracts of employment. The Tribunal rejected that argument. It held that:-

".... apart from some minor headings the Framework Agreement was dealing in the main with terms and conditions of employment which could be expected to be in individual contracts of employment therefore the Framework Agreement in the main was capable of incorporation into the individual contracts."

24. The employees' cross-appeal (which is on behalf of both Putney and Stockwell applicants) first asserts that the Tribunal erred in failing to deal with their two principal arguments, namely that the agreement was provisional and incomplete and that it was not made for a legitimate purpose.
25. It was, perhaps, remiss of the Tribunal not to mention these arguments but they were, in our view, bound to fail. The Framework Agreement was conditional (on the Mokett MEBO offer being accepted) but that did not deny it the character of being a contract intended to bind and capable of binding its parties once the clear condition was satisfied, as it was. Nor did the fact that it contemplated further discussions deny it full contractual force so far as it went. As for its not being made for a legitimate purpose, a recurring theme on the employees' part at the Employment Tribunal had been that the Framework Agreement truly benefited Mokett and its directors (some of whom were directors of the Company) and that that factor in some way vitiated the agreement. That an agreement between A and B may benefit C or even have been intended to benefit only C is not in itself an objection such as to deny the agreement contractual force and validity and in any event the Framework Agreement benefited at least one of its parties, the Company, in the sense that it purported to effect substantial economies in its wages bill. How far it benefited the Union's members could only be gauged by comparing their position under it with what it would have been without it but we have been entirely unable to see any possible ground upon which it could have been ruled to have been void or voidable as made for some improper or illegal purpose.
26. Moreover, the provisions made in the Framework Agreement were of a character apt to be incorporated into individual contracts - consider Alexander -v- Standard Telephone and Cables Limited No (2), [1991] IRLR 286. The provisions related to matters of "Present day-to-day relevance to the employer and employee, as, for example, wage rates and hours of work ...." - Alexander at paragraphs 27 and 31. The cross-appeal fails. We are not, though, to be taken to be saying that the Framework Agreement was in fact incorporated into the employees' individual contracts; we are merely holding that the Tribunal did not err in law in saying that its terms were such that it was capable of being so incorporated.

ONUS OF PROOF

27. In Miller -v- Hamworthy Engineering Ltd [1986] IRLR 461 C.A. the Court of Appeal dealt with a case in which the terms of Mr Miller's employment depended entirely upon the construction of documents; Fox LJ twice makes that point, in paragraphs 12 and 47. He described the contract as "Plain and admitted" and "admitted" - paragraphs 12 and 46. It is in those two paragraphs also that he makes observations which, as it would seem, the Employment Tribunal relied upon; thus in paragraph 12 he says:-

"There being still in existence a plain and admitted contract of employment between the parties as to salary, it seems to me that if an employer is refusing to pay to an employee that salary, he must justify that refusal by reference to some express contractual arrangement, I do not think there is any dispute about that."

Those last words suggest that onus had not been contested. In paragraph 46 Fox LJ said:-

"I come to the point where I started, namely, that there is here an admitted contract of employment under which a salary was payable. If the provision as to payment of salary in that contract is to be displaced, the Defendants must show some agreed variation of the contractual terms binding upon the Plaintiff."

In point of construction Fox LJ held that the contract there in question did not authorise the reduction of salary (by reason of short-time working) which the employer had asserted to have been contractually justified. We do not read the Court in Miller as having intended to lay down some broad principle as to the burden of proof other than (if at all) in relation to the category of case before it, namely as to cases where there was a plain and admitted contract, in writing, the true construction of which the employer was refusing to perform but which the employee was willing and able to work to. By contrast, in the case at hand the Company asserted that the applicants were being paid "in accordance with his/her contract of employment (as affirmed)" and that there had, many months prior to the IT1s, been a wholesale change from previous terms and conditions to the ones extant and being worked to by the applicants when their IT1s were presented. The agreed facts included that the new terms for the Stockwell Garage staff had applied from the 5th November 1994. All but one of the IT1s was presented no earlier than November 1996. There is no mention by the Employment Tribunal of the applicants having been willing and able to continue to perform and attending at the times appropriate in order to perform their "old" contracts. Unlike the position in Miller, there was no question of picking through the clear terms of a contract to see if what was being done was, under those clear terms, justified, but rather the question was more directed to finding what the terms of the contract of employment truly were, a question which, in our view, is more fairly approached neutrally as to burden of proof, without the Tribunal insisting on there being an onus either on the applicants (as such) or upon the respondent (as asserting a contract other than the "old one"). Indeed, we conclude that in a case such as the one before us such a neutral approach is in law the correct one.

28. It was not, though, the approach adopted by the Employment Tribunal, which described itself as satisfied that the burden was on the company to establish how the contracts of employment were varied so as to have permitted the reduction in remuneration which had taken place. The Tribunal, in other words, adopted an approach which goes some way to begging the question, the most material question the Tribunal should have asked itself, as to what the current terms of employment were at the points of time at which the alleged unlawful deductions in wages had taken place - see Burke -v- Royal Liverpool NHS Trust [1997] ICR 730 EAT at 737 F. Later the Employment Tribunal again referred to the burden of proof and the repeated references to the subject indicate the importance which the Tribunal attached to it. The very fact that the Tribunal turned to burden of proof first, as they did, rather than treating it, as it so often is, as a last and make-weight consideration, accords with the Tribunal's having attached real importance to it. Such a marked departure from neutrality as to burden was in our judgment an error of law which, to judge from the importance the Tribunal seems to have attached to burden, cannot be dismissed as insignificant.

CUSTOM AND PRACTICE

29. The Tribunal held that, whilst there had been a tradition of collective negotiation between the Company and the T & GWU, the Framework Agreement proposed fundamental changes and it was not satisfied that the tradition was sufficient to establish that such fundamental changes were incorporated into individuals' contracts by virtue of the collective bargaining. The burden was on the Company to establish that but that burden had not been satisfied.
30. As to the law relating to the rôle of custom and practice in employment law, the Tribunal made, as it seems to us, four potentially significant holdings, namely that:-

(i) In relation to the incorporation into a contract of employment of a term by way of a custom and practice, the custom and practice so relied on must be reasonable, certain, and notorious;

(ii) that where that is shown in relation to the custom and practice, the term thus supported is incorporated on the assumption that it represents the wishes of the parties;

(iii) that strict proof is required of the custom and practice and that the burden of such proof is upon the party seeking to rely on the consequential incorporation of the term into the contract;

and, as it would seem:-

(iv) that there is some relevant distinction generally to be made between a custom and practice enabling changes to be made and one enabling "fundamental" changes to be made in a man's terms and conditions of employment.

31. As for the certainty of the custom and practice alleged by the employer, the term so alleged thereby to be incorporated in the case at hand, if fully spelled-out, would, to judge from paragraph 23 of the Extended Reasons, have been something on these lines, namely that a term of condition of employment representing a change in the staff's terms and conditions in respect of which the T & GWU had reached agreement with the employer, which had been notified to the staff and which that Union bona fide believed (and so informed the employer) had attracted the support of the majority of the staff affected, would, without more, thereafter become a term or condition of the employment of all the staff so affected, whether members of the Union or not. Such a term seems to us certain enough and the Employment Tribunal does not appear to have declined its incorporation on the ground of uncertainty.
32. As for reasonableness, given the large number of staff concerned, the occasional commercial need for a speedy decision on changes in employment rights and practices and the consequential difficulty in conducting individual negotiations and given also the settled history of the Union's negotiating rôle over a number of years, it would be hard to describe such a term as unreasonable and the Employment Tribunal did not do so.
33. As for notoriety, the employees' chief witness Mr Ibekwe said (as recorded in the Chairman's Notes):-

"Respondent always negotiated terms and conditions with T & GWU as long as I can remember."

which seems to have been a reference to as far back as 1988. There had, said Mr Ibekwe, been frequent ballots as to such changes in terms in the past. Mr Elms, the Company's Operations Director, in his written evidence in chief had said that it had been the company's practice over many years to negotiate changes to terms and conditions (both beneficial and detrimental to staff) with the T & GWU. He was not cross-examined on the point. In cross-examination he said that there was one major negotiation each year and on some years several more and that he had not believed that there was a period when workers were not informed of Union agreements. Whilst Mr Ibekwe's evidence in chief included that the T & GWU was recognised by the employer for collective bargaining purposes but not by the employees, there does not seem to have been any evidence that anyone was unaware, let alone that any body of applicants or other employees were unaware, that changes in terms and conditions were from time-to-time made in a manner consistent with the custom and practice alleged. One would surely expect that the men would have noticed both that their rates of pay, for example, or other terms of conditions had changed from time-to-time and that they had not individually agreed to such changes. There was plainly material on which the Employment Tribunal could have found that the custom and practice as asserted by the employer was notorious. We thus cannot say that the Tribunal, holding against the incorporation of the new terms, must have held as it did because of a shortfall in the facts.

34. As for a term incorporated by way of custom and practice being taken to represent the wishes of the parties or the presumed intention of the parties, that may be the notion on which such an incorporation rests but, if the required general notoriety is proven, then one does not undermine that foundation (and hence the incorporation of the term) by showing that some individuals sought to be charged with the term did not know of the practice or that he or she did not intend or wish it - see e.g. Chitty on Contracts Vol. 2 paragraph 13-018. Once the reasonableness, certainty and notoriety is sufficiently proven, the Tribunal has to presume that all relevant parties had so wished and intended.
35. Moreover, on the related third point, it is hard to see why the required reasonableness, certainty and notoriety have to be proved "strictly", if by that was meant to some standard higher than that of the balance of probabilities. Chitty on Contracts cites no such a requirement, nor any authority for it. The only authority which the Tribunal relied on to that end was Singh -v- British Steel Corporation [1974] IRLR 131 where, in one line at p. 135 (and without supporting authority) it is said:-

"Custom requires strict proof by those seeking to set it up."

It is plain that Courts and Tribunals should not lightly find a custom to exist but a requirement that the three ingredients of reasonableness, certainty and notoriety are proved on the conventional balance of probabilities is in our judgment a sufficient bar to ensure that customs will not too lightly be taken to be present. We have found no reason to require "strict proof". The Tribunal indicated that it was satisfied that strict proof was required; it is not clear what they meant to add by the addition of the word "strict".

36. The Tribunal asked itself:-

"Did all parties understand and expect that all agreements negotiated between the Respondent and the recognised Trade Union would become terms and conditions of employment without further agreement or formality?"

But, as we have indicated above, it is no disproof of the efficacy of a custom and practice (in relation to its ability to cause the incorporation of a term of contract) that not all parties understood and expected that it would have that effect. Moreover, it was no necessary part of the company's argument that all agreements negotiated between the Respondent and the recognised Trade Union would become terms and conditions of employment because the agreement which the employer was alleging was one in respect of which it had been held by the Tribunal that the T & GWU had held work-place meetings, where it was impossible for staff to attend at one mass meeting and where that Union had informed the company that the majority of staff had consented to the terms in question. Moreover, as we mentioned earlier, there was no suggestion anywhere that the T & GWU did not bona fide believe that the majority of staff had consented to the terms or that it was untrue that the majority had so consented. Yet further, it was no necessary part of the custom and practice which the company was asserting that, merely upon agreement being reached between the Company and the Union, would a term become a term and condition of employment "without further agreement or formality" because, as we have already noted, in the case at issue there had been work-place meetings such as to lead the Union, as it seemed, to a belief, which we must take to have been bona fide held, that the majority of staff had consented to the terms. Moreover, the Tribunal held that, prior to the changes to pay and conditions of service becoming effective, a notice was displayed at places of work which outlined the changes to the pay and conditions of the platform staff. In these respects we hold that the question which the Tribunal there asked itself was, in the respects we have noticed, the wrong question and that to that extent the Tribunal erred in law.

37. As for the idea that some changes or proposed changes are fundamental and others not and that there may be a custom and practice sufficient so as to be able to effect the one but not the other, it is not to be rejected out-of-hand as, despite the vagueness or variability of the term "fundamental", the law is familiar enough with the question of whether, for example, a breach is or is not "fundamental". But the context in which that is usually asked is as between two or few more parties. The notion of what is "fundamental" when one is dealing with 1,500 individuals is more difficult to grasp. To give the word "fundamental" one type of meaning, perhaps a popular meaning, a change in a rate of pay may be trivial to one and crucial or "fundamental" to another. A change in hours or as to privileged free public transport may be significant or "fundamental" to someone who has a long distance to travel to work but insignificant to someone who lives next to his workplace. If, to avoid that type of uncertainty, one takes a more legalistic and, doubtless, more correct meaning for the word "fundamental" in this context and regards, for example, any change in rates of pay or hours as of themselves "fundamental" changes - see e.g. Cantor Fitzgerald International -v- Callaghan [1999] IRLR 234 C.A. - then the Tribunal would, before being satisfied that the custom and practice had been inadequately proved, have had to enquire into whether the changes effected in the past ("both beneficial and detrimental at different times to the staff") had included changes (as surely was probable) in rates of pay or hours. The reference by the Tribunal to "fundamental" changes impales the Tribunal on the horns of a dilemma; on one, the popular approach to fundamentality, the test is hopelessly variable and vague and, on the other then, in order to rule out fundamental changes as beyond the reach of the custom and practice in issue, the Tribunal would have had to raise the questions (as it did not) as to whether the changes effected over the years since 1988 had, indeed, included changes to rates of pays and hours and (even if they had not) whether any of the 1995 changes were sufficiently un-fundamental to have been duly authorised within the custom and practice alleged.
38. In our judgment the Tribunal erred in law by distinguishing in the very general manner in which it did between a practice sufficient to effect changes and a practice sufficient to effect fundamental changes.
39. Before we leave custom and practice, we must notice Mr Galbraith-Marten's argument that even if there had here been some custom as to the incorporation of collectively agreed terms into individuals' contracts, the custom had invariably involved a previous ballot and that here there had been none. Unfortunately the Tribunal's reference to ballots is ambiguous; they say:-

"No ballot of staff was held although ballots had on previous occasions been held ...."

and they then continued, as we have cited above under our heading of "The Principal Facts". It is not clear from that whether on every occasion in the past there had been a ballot, or whether, if that had been the case, it had been because in the past a ballot had been possible because those concerned had been able, as they were not on this occasion, to attend at one mass meeting. Moreover, given that work place meetings were held and that the T & GWU was able to advise the Company that the majority of the staff had consented to the terms of the Framework Agreement, it could be that no ballot was held as the view of the majority had already been fairly obtained without one. Indeed, in circumstances in which the views of a majority of employees could be and had been ascertained without a ballot and where one mass meeting could not be usefully convened, it could be argued to be an unreasonable custom that would nonetheless insist on a ballot. The Tribunal did not describe the want of a ballot to be fatal; if they had had that in mind they would, in the passage we have cited, have said "without a ballot" rather than, as they did, "without further agreement or formality" and would not have needed to focus as they did on the onus of proof as to custom and practice.

40. Indeed, as Mr Maccabe points out, Mr Galbraith-Marten's argument as to ballots leads the employers' case into difficulty. If the absence of a ballot was crucial, as Mr Galbraith-Marten argues, then it could be said that the Tribunal failed the well-known test, seen in Meek -v- City of Birmingham [1987] IRLR 250 C.A., that a party, here the Company, should be able to see from the four corners of the Tribunal's decision why it lost, which, if it lost by reason of there being no ballot, it cannot do because the Tribunal makes no such finding.
41. We do not find the employees' argument as to the absence of a ballot helpful to their cause.

ACCEPTANCE OF THE NEW TERMS

42. The first of the two petitions signed by some of the Stockwell platform staff, dated the 2nd November 1994, placed on record the signatories' dissatisfaction with the new terms (which they said were unworkable) and requested immediate talks to examine and if necessary amend those new terms and concluded:-

"Pending such talks we are prepared albeit under duress, to work the new rota as from the 5th November next."

43. The second Stockwell petition, of the 8th December 1994, complained that the signatories had not voted on the new terms, that they had demanded a ballot and that, whilst they had understood that there were two short-listed bidders (for the shares of the Company) they had, despite requests, received no proposals from the other bidder, the bidder other than Mokett.
44. As to the Stockwell petitions, the Tribunal said:-

"It is clear by signing those petitions that such applicants were clearly indicating to [the Company] that they did not accept the new terms ... and that they were only continuing to work under protest."

A number of points arise. Firstly, as Mr Maccabe points out, the second petition makes no mention of work being done only under protest. Those signatories who signed only that petition gave no indication of working only under protest (at all events, no such indication as is described by the Tribunal). The Tribunal would therefore have needed to distinguish between those who signed the former petition, the latter, or both, which they did not. Secondly, the working "under duress" of which the first petition spoke was only "pending such talks"; there is no finding by the Tribunal that there were or were not such talks or, if there were none, why that was so. Nor is there any finding whether those who signed both the first and the second petitions had, by the time they came to sign the second, abandoned the protest (if such it was) expressed in the first petition and had changed their view to that expressed in the second.

45. Moreover, it may be significant that the first petition signatories spoke of being prepared ("albeit under duress") to work the new rota; on the face of things it was, if anything, a protest only against a rota as opposed to a protest in relation to the new and lower rates of pay. Nor do the Tribunal's Extended Reason show any awareness of the apparent consequence of their reasoning. If a mere once-recorded protest (even if one or both petitions were capable of being so read) sufficed to save the employees from an acceptance by conduct of the new terms, that would lead to an ability later to assert the terms of the "old" contract without limit of time save for the bar provided by the Limitation Acts. The Stockwell petitioners, as far as one can tell from the Tribunal's Extended Reasons, worked the new rotas (despite initially saying they were unworkable), received the new rates of pay, are recorded as making no further or renewed protest, failed even to insist upon attending to work only the "old" timetable and did so without formal complaint or proceedings from the 5th November 1994 until the launch of the Employment Tribunal proceedings almost two years later in November and December 1996. There was not even a finding that despite the employees working the new hours and terms during that period, the Company knew and continued to know that the Stockwell employees continued to harbour a real protest against those new terms and would claim the right to assert that the "old" ones still applied.
46. Rigby -v- Ferodo Ltd [1987] IRLR 517 H.L. which the Tribunal found to be of considerable assistance, is really of little assistance as in that case it had been accepted in the Court of Appeal and in the House of Lords that estopel, waiver and acquiescence had failed on the facts at first instance - see p. 518 paragraph 14 and in the Court of Appeal [1987] IRLR 61 at paragraphs 20 and 21. Whether or not the conduct of an innocent party amounts to affirmation or acceptance of a new contract is a mixed question of law and fact - consider W.E. Cox (Toner) International Ltd [1981] IRLR 443 at paragraph 16 - but it can be an error of law to concentrate on some aspects to the exclusion of others - Cox, paragraph 16. Here, in our judgment, the Tribunal erred in law by misunderstanding the import of the Stockwell petitions and by relying as heavily as it did in regarding the petitions as sufficient of themselves to exclude acceptance, despite almost two years working of and payment under the new provisions. We are not saying that no Tribunal properly instructing itself could have come to the conclusion to which this Tribunal did come on the question of acceptance of the new terms and provisions; what we do say is that the Tribunal erred in law in adopting the route which they took to the conclusion at which they arrived

CONCLUSION

47. We have held the cross-appeal to fail and have held there to be the errors of law we have described as to the onus of proof, as to custom and practice and as to acceptance of the new terms. But this is not a case where we can say that only one conclusion was possible, still less that any party has ground for saying that it has lost confidence in the Tribunal that heard the case. Accordingly we remit the matter to the same Tribunal as before. The attention which Mr Maccabe and Mr Galbraith-Marten have brought to the case has led to focus on issues and possibilities not raised at the first Tribunal hearing and in the circumstances we think that a fair hearing on the remission would be one in which parties, if they choose to do so, will be able to rely not only on evidence already given but on fresh evidence adduced at the remitted hearing. We so order. If any party feels it desirable to apply to the Employment Tribunal as to directions as to further evidence or otherwise they are at liberty to do so.
48. We mentioned at the outset that there were before us two appeals and a cross-appeal. So far, we have dealt only with one and the cross-appeal. As for the remaining appeal, it is concerned only with quantification of loss. At an early stage in the hearing the parties agreed that that appeal could await this decision. Accordingly we did not hear argument upon it. We invite the parties, now that this decision is available to them, to discuss between themselves how best to deal with the remaining appeal. If application needs to be made to us in relation to the remaining appeal, it would be best in the first place that it should be attempted in writing.