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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Cumbria County Council v Dow & Ors (No 2) [2007] UKEAT 0148_06_2505 (24 May 2007) URL: http://www.bailii.org/uk/cases/UKEAT/2007/0148_06_2505.html Cite as: [2007] UKEAT 148_6_2505, [2007] UKEAT 0148_06_2505, [2008] IRLR 109

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		BAILII case number: [2007] UKEAT 0148_06_2505
		Appeal No. UKEAT/0148/06/MAA, UKEAT/0463/06/MAA, UKEAT/0464/06/MAA, UKEAT/0465/06/MAA, UKEAT/0256/07/MAA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 18, 21, 22, 23, 24 May 2007

Before

THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

MRS A GALLICO

MR R LYONS


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(UKEAT/0148/06/MAA) CUMBRIA COUNTY COUNCIL	APPELLANT
MS E DOW and Others	RESPONDENTS
(UKEAT/0463/06/MAA) MRS M F JOSS and Others	APPELLANTS
CUMBRIA COUNTY COUNCIL	RESPONDENT
((UKEAT/0464/06/MAA) CUMBRIA COUNTY COUNCIL	APPELLANTS
1) MS R ELLIOTT and Others (2) MRS M F JOSS and Others	RESPONDENTS
(UKEAT/0465/06/MAA) MRS M F JOSS and Others	APPELLANTS
CUMBRIA COUNTY COUNCIL	RESPONDENT
(UKEAT/0256/07/MAA) CUMBRIA COUNTY COUNCIL	APPELLANTS
1) MRS M F JOSS and Others (2) MS R ELLIOTT and Others	RESPONDENTS

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Transcript of Proceedings

JUDGMENT (NO.2)


 


APPEARANCES

For CUMBRIA COUNTY COUNCIL	MR CHRISTOPHER JEANS (One of Her Majesty's Counsel) and MR PAUL CAPE (of Counsel) Instructed by: Cumbria County Council Legal Services Unit The Courts CARLISLE Cumbria CA3 8LZ
For the UNISON Claimants	MR PAUL EPSTEIN (One of Her Majesty's Counsel) and MS HELEN KNOTT (of Counsel) Instructed by: UNISON Employment Rights Unit 1 Mabledon Place LONDON WC1H 9AJ
For the GMB Claimants	MS TESS GILL and MS BETSAN CRIDDLE (of Counsel) Instructed by: Messrs Thompsons Solicitors The St Nicholas Building St Nicholas Street NEWCASTLE-upon-TYNE NE1 1TH

SUMMARY

Equal Pay Act - Out of Time

Contract of Employment - Variation

The issue before the Employment Tribunal was whether certain equal pay claims were brought in time. This depended upon whether alterations in terms and conditions were simply variations of an existing contract (in which case they were) or whether they involved the termination of one contract and the creation of another (in which case they were not). There were ten sample claims. In some cases there were new written contracts agreed and in others there were contractual offers made but no indication of any acceptance by the employee. The Tribunal found that in most, but not all, cases the claims were in time. The EAT upheld appeals with respect to two of the claims. Discussion of how to determine whether a contract is merely varied or whether there is a termination of the old contract and the creation of a new one.


 



See also: Cumbria County Council v Dow & Ors (No 1) [2007] UKEAT 0148_06_2405 (24 May 2007)


THE HONOURABLE MR JUSTICE ELIAS (PRESIDENT)

1. This judgment deals with one aspect of the grounds of appeal raised in this case, namely whether claims were brought in time. The proceedings concern a host of equal pay claims made against the Council. The background to the litigation is explained in the related judgment dealing with all the other issues and we will not repeat it here. The limitation appeals raise a discrete issue wholly unconnected with the other grounds of appeal.
2. The Council identified some 1500 claims which it asserted were either out of time, or in respect of which the claimant could not claim equal pay for the full period of her employment with the Council. Many of those claimants had continuous service for the material time, but there had been a change to their terms of employment in respect of their status, hours or duties which the Council claimed was an event causing time to run under the Equal Pay Act 1970 for limitation purposes. The Tribunal referred to this event as the "trigger point". Ten sample cases were selected to establish the principles for determining when time begins to run. The Council appeals against the finding in six of those cases, and the claimant appeals in one.

The law.

The statutory provisions.

3. The mechanics of the Equal Pay Act are that an equality clause is incorporated into a woman's contract (s1(1)). It has effect in a number of circumstances in which the woman is employed in the same employment as the man, namely where they are employed on like work, work rated as equivalent or work of equal value (s1(2)).
4. "Employed" means "employed under a contract of service … and related expressions shall be construed accordingly" (s1(6)).
5. Section 2(4) of the Act specifies the time limits for pursuing such claims in the following terms:

"(4) No claim in respect of the operation of an equality clause relating to a woman's employment shall be referred to an [employment tribunal] otherwise than by virtue of subsection (3) above if she has not been employed in the employment within six months preceding the date of the reference".

6. This sub-section has now been amended by the Equal Pay Act 1970 (Amendment) Regulations 2003 which give effect to European Union law following the Preston litigation on pensions. The amended sub-section applies from 19 July 2003. It is as follows:

"No determination may be made by an employment tribunal in the following proceedings:

(a) on a complaint under subsection (1) above [i.e. complaints by employees, as here] … unless the proceedings are instituted on or before the qualifying date determined in accordance with section 2Z below."

7. Section 2Z(3) defines the "qualifying date" in what is termed "the standard case". It provides:

"In a standard case, the qualifying date is the date falling six months after the last day on which the woman was employed in the employment".

8. There are special provisions for what are termed a "stable employment case", a "concealment" case, or a "disability" case. However none of these exceptions applies here and it is common ground that in all the cases under appeal the previous rule applies unaltered.
9. The same test therefore applies, for present purposes, for complaints in relation to employment ending before 19 July 2003 and in relation to complaints in relation to employment after that date. In both cases time starts to run six months from the day on which the woman was "employed in the employment".
10. The meaning of that phrase has now been definitively determined by the House of Lords in Preston v Wolverhampton NHS Trust (No. 1) [1998] ICR 227. Lord Slynn, with whose judgment Lords Goff, Lloyd, Nolan and Hope agreed, approved the analysis of Otton LJ delivering judgment in the Court of Appeal in that case who said that the time limit runs "from the end of the contract of employment alleged to contain the equality clause in respect of which the claim is made":([1997] ICR 899, 922A).
11. This means that in a standard case even where the relationship between an employer and employee continues, if there are a number of different contracts during the course of that employment, any equal pay claim with respect to a particular contract must be brought within six months of that particular contract terminating. The sample cases with which we are concerned all raise the question, in a variety of factual contexts, whether the contract with respect to which the equal pay claim was made had terminated more than six months before the claims were lodged.

The principles of termination.

12. The key issue, therefore, is to determine the principles for analysing when changes in a contract amount merely to a variation of a continuing contract and when they involve a termination of the contract and the creation of a new one. Certain principles are not in dispute.

(i) A contract may be terminated expressly or impliedly. It may be terminated by dismissal, resignation or by mutual consent.

(ii) Implied mutual consent will be the most common form of termination where the individual enters into a new contract with the same employer.

(iii) The issue is ultimately one of intention. In Marriott v Oxford and District Co-Operative Society Ltd (No 2) [1969] 1 WLR Lord Parker referred to the judgment of the House of Lords in Morris v Barron & Co [1918] AC 1 and said this:

"The question whether added new consensual terms are a mere variation of an original contract or constitute a new contract and a rescission of the old is a matter which has always given rise to some difficulty. One goes back, albeit the case was dealing with the sale of goods and the Statute of Frauds, to Morris v Baron and Co. [1918] A.C.1. Lord Finlay L.C., in his speech emphasised that the answer to the question is always one of intention: was the intention to make a new contract, in which case the old contract was rescinded, or was the intention merely to treat the old contract as in being but with certain variations. At page 12 he said:

"The evidence in the present case points to the conclusion that

the parties intended not merely to vary the original contract but

to set it aside and substitute another for it, giving a mere option

to take delivery of the parcel undelivered.""

(iv) Not infrequently agreements to alter the terms of the contract will be made orally without any documentation between the parties (although the employee should subsequently be given a note of the change: see s.4 of the Employment Rights Act 1996). In practice nothing will be said about whether the intention is to create a new contract or not. In those circumstances the test for determining whether the contract has been terminated or merely varied is that set out by Lord Parker CJ in Marriott:

"… an important consideration is the nature of the alleged variation. In order to amount to a rescission it must be so fundamental that nobody could claim that the original contract was still in being. On the other hand, the new terms may be on such minor matters that really the only common sense of the case is that the original contract is in being, subject to slight variations. In other words, each case must depend upon the circumstances of the case."

(The decision itself was reversed in the Court of Appeal [1979] 1 QB 186, but without any doubt being cast on this passage.)

13. That dictum in Marriott has been followed in numerous other decisions in which changes have been made but the relationship has continued. These include Hogg v Dover College [1990] ICR 39 (hours and salary significantly reduced; held to amount to a termination); Preston v Wolverhampton NHS Trust (No. 3) [2004] ICR 993 (there could not be a variation of a contract which had been terminated); and Degnan v Redcar and Cleveland Borough Council [2005] IRLR 504 (where the EAT (Burton P) referred certain cases back to the employment tribunal because it had not given adequate reasons for determining that certain promotions constituted merely a variation and not a new contract.)

14. In Hogg the employers sought unilaterally to vary the contract; in Degnan the change was by agreement. The relevance of that is simply that a unilateral change may constitute a dismissal whereas an agreed change will not; it does not otherwise affect Lord Parker's analysis. The intention of the parties has to be determined objectively; the subjective perceptions of the parties are not relevant.

13. The one issue of principle in dispute in this case is the significance of the fact that in some cases the terms were changed followed the issuing by the employers of a document headed "contract of employment" which in terms stated that "this contract of employment supersedes any previous contract of employment", and the fact that in some cases they were signed.

The Tribunal's analysis.

14. The Tribunal set out its approach as follows (para 3.4):

"We have concluded that the proper approach to deciding these cases is to consider the full factual background in each case and among the factors which we considered it relevant to take into account in deciding whether there was a fundamental variation, as required, were the following:

(i) What were the terms express or implied in the original contract of the claimant?

(ii) What terms were there which permitted a change in working conditions for example as to pay, mobility, or flexibility?

(iii) Did such changes require the consent of either party to the contract or could such changes be enforced by one party without the consent of the other?

In the present cases there was no evidence of any enforced changes.

(iv) In what manner were such changes recorded by the respondent?

(v) What were the parties' perceptions of the importance of such changes?"

15. Notwithstanding factor (v), they confirmed that they agreed with Mr Jeans that the question had to be judged objectively and not by reference to the subjective intentions or beliefs of the parties. They then confirmed that they did not consider that issuing of a document purporting to be a new contract of employment was decisive:

"We did not consider that the mere fact of the issuing of new contractual documentation of necessity meant that in every such case something less than a fundamental change in the contract as in Hogg v Dover College was sufficient to constitute a new contract and the termination of an old one. That in our view is elevating the factor of the issue of contractual documentation too high. The fact of the issue of new contractual documentation is in our view a factor to be considered and is to be given appropriate weight."

16. The Tribunal there refer to the mere issuing of a contact. However, as we shall see, they considered that the written contract was only of evidential significance, even when it had been signed by the employee.
17. Mr Jeans submitted that the approach was flawed. First, he said that the scope of any clause permitting unilateral changes to terms and conditions was irrelevant. We do not accept that; if an alteration is imposed which falls within the four corners of the contract then there is not even a contractual variation, merely the exercise of a power conferred under the contract. Even where the change falls outwith a power to vary, we agree with the Tribunal that the extent of the contractual power of unilateral variation is potentially material to the question of how fundamental a proposed change really is.
18. Second, Mr Jeans contends that factor (v) is immaterial. The perceptions of the parties have no significance. We agree, and indeed the Tribunal itself appears to have recognised that when it said that the test was an objective one.
19. Finally, and most significantly, Mr Jeans submitted that it was a fundamental error for the Tribunal to say that the existence or otherwise of a written contract was merely a factor in the overall assessment. Mr Jeans submits that contractual freedom means that the parties can make a new agreement whenever they like. If they choose to make alterations in the contract by termination and a new contract, the court should give effect to that. It is not legitimate for the court to refuse to give effect to the mechanism chosen by the parties on the basis that the same result could have been achieved by a simple variation. Indeed, he goes further and submits that the mere issuing by the employer of a new contract will suffice to bring about a termination of the original contract.
20. The claimants submit that the Tribunal had properly directed themselves on this matter. The contractual documentation was simply one factor for the Tribunal to consider and give such weight as it considered appropriate. These findings were all issues of fact and the EAT should only interfere in the very exceptional circumstances where the finding could properly be described as perverse. None of these cases remotely fell into that category.
21. The claimants pointed out that in Marriott and subsequent cases it has been explained that the answer to the question – new contract or variation? – is highly fact sensitive. They also rely upon certain observations of Lord Hoffman in Carmichael v National Power plc [2000] IRLR 43 (para. 29) in which he said that the Employment Tribunal is entitled to determine "whether the parties intended a document or documents to be the exclusive record of the terms of their agreement". That question, he said, is one of fact.
22. The majority (Elias P and Mrs Gallico) agree with Mr Jeans that where it is clear from the contractual documents that the parties have agreed to effect changes by a fresh contract, that must be decisive. The courts must give effect to their chosen mechanism. However, we do not accept that the mere fact that an employer issues a document which purports to be a new contract will suffice. That would be to allow the employer unilaterally to dictate the mechanism to be adopted, which is inconsistent with fundamental contractual principles. Both parties must consent to this mechanism being adopted.
23. In our judgment, nothing in the Marriott line of cases prevents an express written agreement on this issue being determinative. In Marriott and the succeeding cases the courts were not looking at situations where the parties had specifically produced documentation showing that they had agreed a particular mechanism for change. They were focusing upon a quite distinct question, namely, whether it could be inferred from contractual changes alone that the contract had been terminated.
24. Nor, in our view, is the observation of Lord Hoffman in the Carmichael case on the point. His Lordship was looking at a very different question, namely the employment status of an individual. In that context the written contract may not, indeed generally will not, tell the whole story, and where that is the case, the court must not just focus on the written document. But here the point in issue is one of intention, which is expressly covered by the terms of the agreement itself. It would not in our view be legitimate to look at the surrounding circumstances to negate what the parties have plainly agreed in writing. The factual matrix may be highly material where the issue is one of construing the meaning of the written terms, but that is not the issue here. There is no issue on the meaning of the contract itself. Furthermore, there is nothing contrary to public policy in the parties agreeing to give effect to even relatively minor changes by the termination and new contract route. It is arguably administratively tidier and it will be extremely rare where the issue is one of any significance.
25. We will consider the application of these principles once we have set out the facts of the individual cases.

Individual cases: the Tribunal's analysis.

26. The Tribunal distinguished between three categories of cases. First, there were those where there was a change in the number of hours of worked; second, those where the job altered; and third, those where the job changed from being a relief post to one that had become permanent.

Change of hours.

27. Three of the sample cases under appeal fall into this category, namely Loughran, Slack and Elliott.
28. Loughran – She worked for the Council from 1981 as a cook. She received a notification of appointment on 22 ½ hours per week as from 30 March 1992. On 20 August 1996 she was issued with a notice of termination of employment in respect of her hours, which were then 33 ¼. She received a new notification of appointment in respect of the same job as part time cook, working again 22 ½ hours. That was to take effect as from 22 September 1996 following the birth of her second child. It is not clear when the hours have been increased in the interim. On 20 August 1996 she received a letter which said this:

"I have been informed by Mr Green that with effect from 2 September you will be reducing your hours of work from 33 ¼ per week to 22 ½. I have notified the Financial Services Unit accordingly. A contract of employment will be forwarded to you in the near future."

On 31 August she signed a contract indicating the date of commencement as being 2 September. She signed to confirm that she accepted the appointment on the terms and conditions stated. Subsequently in 2000 she asked for hours to be increased again. The supervisor agreed to roster her to accommodate the extra hours. She signed the change of roster on 22 May 2000 and commenced the extra hours from 31 May. She received a contract incorporating the statement of written particulars on 12 July 2001, some fourteen months after the change, following her request for a job description. The Tribunal concluded that this was a consensual variation and not a fundamental variation. In their view it "fell far short" of a termination.

29. Slack – She started work as a cook on 39 hours in January 1971. It seems she first received a contract on 25 March 1997. On 28 March 1999 there was a variation of a contract as a result of a local Collective Agreement, reducing the hours to 37 hours per week. In January 2000 for personal reasons she asked for a further reduction in hours. As a consequence on 16 February 2000 a notification of appointment document was issued indicating a reduction from 37 to 30 hours in her normal working week. The date of change was recorded as being 1 April 2000. New contractual documentation was issued reflecting the change in hours and the fact that she was working four days rather than five. In other respects the job was the same. She signed a new contract on 29 February 2000 which included the clause saying that it superseded all earlier contracts. The Tribunal noted that in practice she often worked a 37 hour week because of standing in for another cook while off on holiday or sick. The Tribunal concluded there had been no termination. They said this:

"The only possible argument that there has been a termination as at 1 April 2000 is that the respondent issued a new contract which she signed as acceptance of the appointment. This is a factor that when looked at against all the other factors, we are perfectly satisfied there was no termination of her old contract and no issue of a new one. This is merely in reality a consensual variation."

30. Elliott – She first started at the Edington Centre on 1 October 1996 on a 28 hour week. Her contract of employment was issued to her some four and a half months after she started on 14 February 1997. Her hours were 28 per week and she worked Mondays-Thursdays. She wished to reduce her hours from 28 to 21 and to work a three-day week. She made that request on 15 May 2000, to start from Monday, 12 June. A notification of appointment document was issued to her recording that change. The contract letter was issued on 25 May, with a commencement date of 12 June, as she had requested. It contained the clause about superseding earlier contracts. It was signed on 30 June. The Tribunal treated this too as a consensual variation and considered it "entirely unrealistic" to interpret a trigger point as having occurred on that date.

Change of posts.

31. The appeal here relates to two individuals, Ms Storey and Ms Dow.

Storey – She worked at Elizabeth Welsh Residential Home as a domestic on what were termed "varied" normal working hours. On 14 June 1996 her appointment was confirmed, following her probationary period. On 5 January 1999 she was appointed to the post of general assistant at the same residential home on 25 hours per week. A notification of appointment document was issued recording changes to her status from domestic to general assistant. That was the only documentary evidence which the Tribunal had, but they were informed by Ms Storey that she was given a written contract on 15 June 2000, after she had asked for one, but there was no evidence that she had signed it. However, the Tribunal did not see this contract or any other documentary evidence and they concluded, following the approach in such cases as Marriott, that although the nature of the duties changed in certain respects, these fell a long way short of the variation of a kind necessary to constitute a termination of a contract. The duties to some extent involved greater caring responsibilities, but that was akin to the promotion by consent which occurred in the Marriott case.

32. Dow – She also was a care assistant in a residential home. She was initially described as a relief care assistant and was given a temporary employment contract on 1 September 1992. She received a document on 10 October 1994 headed 'Temporary Employment Contract', which commenced on that date and terminated on 31 March 1995. She was issued with a written contract in March 1997, recording she was on White Book terms but with APT&C remuneration. She had been allocated 24 hours a week. She did not sign the acceptance of appointment clause in the 1997 contract. A further change was made on 11 December 1999. She was appointed initially for three months to a temporary appointment as night care assistant. Mrs Dow said that it would have been permanent but the former job holder had been promoted but wanted an opportunity to decide whether or not she wished to remain in her new job or revert to the night care job. Mrs Dow was issued with a contract on 22 February 2000 with a start date of 11 December 1999. On 12 August 2000 she made a formal written application for the permanent post and her appointment was confirmed by the issue of a contract letter on 5 October indicating a commencement date as night care assistant on 25 August 2000 but it was never signed by her. The Tribunal stated that they found this a difficult case to determine. There were some changes in job duty but relatively few. The terms remained substantially the same; there was a marginally higher hourly rate to reflect additional responsibility and unsocial hours. The Tribunal took the view that these factors outweighed some contrary indications suggesting a termination, namely that the Council had issued contractual documentation and that Mrs Dow had formally applied for a permanent post.

Change from relief to permanent or multiple changes.

35. Mrs Hodgson.

The Council here challenges the ruling with respect to Ms Hodgson. She obtained work initially in 1998 as "relief care assistant/night care assistant and relief cook". The Tribunal took this to be a single contract covering three jobs. On 3 November 1998 a notification of appointment document was issued. In May 1999 she signed a document referring to 8 permanent hours on a four-weekly rota and up to 39 hours as a relief care assistant. On 13 July 2000 she was issued with a written contract for 8 hours as a day care assistant, with effect from 1 November 1998 but she refused to sign it. A night care contract was issued on 7 August 2001, but recording a start date on 11 June 2001. A further change occurred on 1 December 2001 when her night care hours went up to 66½ per two-week rota. A fresh contract was again issued after that change was implemented, namely on 14 February 2002. The Tribunal noted that there was a conflict in the witness statements which had not been resolved by any oral evidence. The Tribunal was not satisfied that the variation of hours to 66½ per fortnight constituted a new contract.

Discussion.

33. The task in each case is to determine the intention of the parties. This involves establishing whether there is evidence objectively to show that there was an agreement as to the mechanism to be adopted. If the change is not of a fundamental nature, the only proper inference is that there was a variation unless we are satisfied that there was, objectively viewed, an express agreement that the mechanism to be adopted was the termination and new contract route.
34. In determining that issue, the reasoning of the majority is as follows. First, in our judgment, where there is clear evidence that both parties have signed what is stated in terms to be a new contract, that is conclusive evidence that the termination route has been chosen. We do not accept that other factors can detract from the plain language of the agreement. This was the position in the case of Ms Slack, who signed a new contract on 29 February to take effect on 1 April.
35. However, in only one other case was the contract signed by both parties, namely in the case of Ms Elliott. Her case varied from the Slack case in that although the contract was provided to the employee prior to the new arrangements being entered into, it was not signed until later. It was issued on 25 May, signed and returned on the 30 June, and the new terms had by then taken effect on the 12 June. Nonetheless, in our judgment the fact that the signature was appended after the new terms had taken effect does not prevent it from constituting the new contract as the agreed mechanism for varying the contract.
36. In all other cases the contract was not provided until the alteration had been brought into effect. In the case of Mrs Loughran it was some 14 months after she had begun to work the new hours, as it was with Ms Story (although the Tribunal never saw that contract.) We see no basis at all for saying that this unilateral act of the employer could constitute a retrospective fresh characterisation of what would otherwise plainly have been a variation of the same contract. In both Mrs Hodgson and Mrs Dow's cases the delay in issuing the document was shorter, new contracts being issued over two months after the change was brought into effect. However, in our view the effect must have been the same. In none of these cases was the contract signed or returned. Nor is it suggested that in any case before the Tribunal the parties orally agreed that the new contract mechanism would be the method adopted for implementing the new terms. It would be surprising if anyone had thought it was of any significance or given it any thought. We do not see any basis for inferring in those circumstances that there has been an agreement that the new contract mechanism has been adopted. The variation was effective prior to the new agreement being given to the employee.
37. We recognise that there is a well established principle that if an employee who is faced with unilaterally imposed new terms actually performs them without protest, then there will come a time when his agreement to those terms will be inferred from that fact. However, the crucial feature is that the employee's conduct must be referable only to his having accepted the new terms: see Jones v Associated Tunnelling [1981] IRLR 481 para 22. If an employee continues to work the agreed new terms after having been issued with a new contract, continuing to work in accordance with those terms is not only referable to an acceptance that the new terms have been achieved by the new contract route; it is equally consistent with the mechanism of change being the variation route. It is, therefore, not legitimate to infer from continuing performance alone that there has been agreement to the new contract route.
38. It follows that the appeals in the cases of Slack and Elliott succeed, but the other appeals lodged by the Council on this point fail.
39. Mr Lyons considers that the Tribunal was entitled simply to treat the written documents as merely one factor to be considered in an analysis of the parties' intentions. He believes that given the relatively modest changes in the terms of Ms.Slack and Ms Elliott, the Tribunal was entitled to conclude that there was no intention to create a fresh contract and that the trigger point was not reached.

The claimants' appeals.

40. Mrs Athersmith.

The facts of her case were that she was originally a relief carer; that is covering for those on sick leave or holidays. Her actual hours were virtually full time and after some months she was given and signed a contractual document accepting a permanent appointment. The new contract differed from the earlier one in that there was no guarantee of any hours in that contract, and no sick pay entitlement. The Tribunal concluded that there was a termination of the contract when the relief contract was ended. They did so on the basis that the change was a fundamental one:

"We consider that there is a very significant difference between a zero hours contract where an employer is not obliged to offer any hours and an employee is not obliged to accept any hours on the one hand, and a contract which guarantees some hours, however small the number."

41. The Tribunal added that a zero hours contract "is more akin to a casual worker, who is not an employee at all unless she can establish a global or umbrella contract."
42. The claimant contends that this analysis was factually incorrect. Both her contracts, relief and permanent were, they submit, zero hour contracts. In each the number of hours to be worked were to be determined by a particular manager having regard to the needs of the service. In view of this they sought a review of this decision.
43. The Chairman accepted that the factual position was as the claimant urged upon him, but nonetheless refused the review on the basis that there were still material differences between the two contracts. Not only was there the question of sick pay entitlement, but the holiday pay was different and the chairman also said that Mrs Athersmith was probably not an employee under the relief contract at all, but only a worker.
44. Mr Epstein QC, for the claimant, contended that given the Chairman's concession as to the inadequacy of the reasons, the initial decision plainly disclosed an error of law because based on a misunderstanding of the material facts. It could not be saved by the subsequent letter refusing the review because the application for review was refused. The gloss on the reasoning was determined only by the Chairman without any lay member involvement.
45. The Council submit that the decision of the Tribunal should stand. They do so for two independent reasons. The first is that since she was offered and signed a new contract which in terms stated that it superseded all earlier contracts. That, submits Mr Jeans, is decisive of the point. The second reason was that in any event the determination that the move from a relief to a permanent contract was a fundamental change in the nature of the relationship was a finding of fact which was open to the Tribunal particularly since Mrs Athersmith herself had given evidence to the effect that she could refuse work as a relief but not as a permanent worker. It could not conceivably be said to be perverse.
46. Had the issue simply turned on the assessment of the facts, we would have upheld this appeal and remitted the matter for reconsideration. Contrary to the submission of Mr Epstein, we would not have substituted a finding that there was no termination. This is not, in our view, a case where the only possible construction of the facts is that there was merely a variation. We note that in Jeffery v Secretary of State for Education [2006] ICR 1062 the EAT held that the transfer from a temporary to a full time contract was in principle capable of being sufficiently fundamental to entitle a Tribunal to conclude that it amounted to a new contract. That case is not, of course, on all fours with this one, but in our view Jeffery at least suggests that the outcome is not obvious.
47. However, in the view of the majority this cross appeal must fail for the first reason relied upon by Mr Jeans. Mrs Athersmith signed an agreement which made the new contract the mechanism for effecting the changed terms. This case is akin to Slack and Elliott above. This was not the basis of the Tribunal's decision, but on the facts they have found it is the only proper conclusion that they could reach as a matter of law. In those circumstances the majority consider that we should uphold the decision even although for a different reason: see Dobie v Burns International Securities (UK) Ltd [1984] ICR 812. Mr Lyons would have remitted the case for reconsideration in line with his view which we have set out. However, for reasons given by the majority, the cross appeal fails.

Disposal.

48. The appeals in the case of Slack and Elliott succeed. Their claims are therefore out of time. The other appeals and the cross appeal fail.
49. The majority recognise that there is a considerable degree of artificiality in distinguishing between these claimants on the grounds that some have signed written contracts and others have not. It is highly unlikely that any of the parties gave any thought whatsoever to the question whether there was a new contract or not; subjectively, it is extremely unlikely that they would have had an intention either to terminate or to vary. To analyse the cases in this way, as we readily recognise, involves adopting legal distinctions remote from the minds of the contractual parties and which make little sense in the world of work. But we are required by Parliament to focus on when a particular contract, rather than the relationship, terminates, and the majority consider that this must be done in accordance with traditional contractual principles. In this case their adoption works against the interests of the unsuccessful claimants, but in other contexts they could benefit from applying the usual contractual rules.