Judgment - British Fuels Limited v. Baxendale and Another
and
Wilson and Others v. St. Helens Borough Council
  continued

(back to preceding text)
 
     "The directive does not, however, require Member States to provide that, in the event of the employee deciding of his own accord not to continue with the contract of employment or employment relationship with the transferee, the contract or relationship should be maintained with the transferor. Neither does the directive preclude this. In such a case, it is for the Member States to determine what the fate of the contract of employment or employment relationship with the transferor should be.

    The Court added:

     "21. The Court has consistently held (see the judgement in Case 362/89 D'Urso [1991] E.C.R. I-4105, paragraph 9) that the directive is intended to safeguard the rights of workers in the event of a change of employer by making it possible for them to continue to work for the new employer on the same conditions as those agreed with the transferor.

    See also Ny M/lle Kro (case 287/86) [1987] E.C.R. 5465.

    In D'Urso (supra) a company, E.M.G., was placed under receivership and the undertaking was transferred to a new company "Nuova E.M.G" 518 employees including Mr. D'Urso remained in the service of E.M.G. though later their employment relationship was "suspended." D'Urso claimed that their employment relationship continued with Nuova E.M.G. the transferee. Article 2112 of the Italian Civil Code provided that:

     "Where an undertaking is transferred, contracts of employment shall continue to be valid as against the transferee unless the transferor has given the required notice and employees shall retain the rights flowing from the seniority acquired before the transfer."

The Italian court asked:

     "Does the first sub-paragraph of Article 3(1) of [the Directive] provide for the automatic transfer to the transferee of the employment relationships relating to the transferred undertaking and in existence at the time of its transfer?"

The Court replied that by Article 3(1):

     "all contracts of employment or employment relationships existing on the date of the transfer of an undertaking between the transferor and the workers employed in the undertaking transferred are automatically transferred to the transferee by the mere fact of the transfer."

    The Court, however, repeated that whether the contract or relationship of employment existed at the date of the transfer must be assessed on the basis of national law, though it was not possible to derogate from the mandatory rules of the Directive in a matter unfavourable to employees:

     "The implementation of the rights conferred on employees by the Directive may not therefore be made subject to the consent of either the transferor or the transferee... with the sole reservation, as regards the workers themselves, that, following a decision freely taken by them, they are at liberty, after the transfer, not to continue the employment relationship with the new employer. . ." (Paragraph 11)

    In P. Bork International v. Foreningen etc. (case 101/87) [1988] E.C.R. 3057 the question arose as to whether the close down of a factory with dismissal of staff on 22 December 1981 followed by a takeover of the factory with effect from 4 January 1982 constituted the transfer of an undertaking so that the transferee was required to safeguard the rights and obligations arising under the contract of employment in existence at the date of the transfer. The Court repeated that the purpose of the Directive was:

     "to ensure that the rights of employees are safeguarded in the event of a change of employer by enabling them to remain in employment with the new employer on the terms and conditions agreed with the transferor."

    It said:

     "Whether or not such a contract or relationship [of employment] exists at [the time of the transfer] must be assessed on the basis of national law subject, however, to compliance with the mandatory provisions of the directive concerning protection of employees from dismissal as a result of the transfer.  "Accordingly, the employees of the undertaking whose contract of employment or employment relationship was terminated with effect from a date prior to that of the transfer, contrary to Article 4(1) of the directive, must be regarded as still in the employ of the undertaking on the date of the transfer, with the result, in particular, that the employer's obligations towards them are automatically transferred from the transferor to the transferee in accordance with Article 3(1) of the directive. In order to determine whether the employees were dismissed solely as a result of the transfer, contrary to Article 4(1), it is necessary to take into consideration the objective circumstances in which the dismissal took place and, in particular, in a case such as this, the fact that it took effect on a date close to that of the transfer and that the employees in question were taken on again by the transferee.

    Much attention was paid in oral argument in the present case to Foreningen af Arbejdsledere i Danmark v. Daddy's Dance Hall A/S (Case 324/86) [1988] E.C.R. 739. Mr. Tellerup was employed by Irma Catering A/S, the lessee of a restaurant. Being obliged to give up its lease Irma on 28 January 1983 dismissed all its staff with effect from 30 April 1983. Daddy's Dance Hall became lessee of the premises and on 7 February 1983 employed Mr. Tellerup with effect from 25 February 1983 subject to a trial period of three months terminable on fourteen days' notice. On 26 April 1983 Mr. Tellerup was dismissed on fourteen days' notice. Having stressed that the purpose of the directive was to ensure that rights resulting from a contract of employment are safeguarded the Court held that an employee cannot waive the rights conferred on him by the mandatory provisions of the directive even if the disadvantages resulting from his waiver are offset by such benefits that, taking the matter as a whole, he is not placed in a worse position.

    The Court held:

     "16. However, as the Court held in its judgments of 11 July 1985 in (case 105/84) Foreningen af Arbejsdsledere i Danmark v. Danmols Inventar [1985] E.C.R. 2639, Directive 77/187/EEC is intended to achieve only partial harmonization, essentially by extending the protection guaranteed to workers independently by the laws of the individual Member States to cover the case where an undertaking is transferred. It is not intended to establish a uniform level of protection throughout the Community on the basis of common criteria. Thus the directive can be relied on only to ensure that the employee is protected in his relations with the transferee to the same extent as he was in his relations with the transferor under the legal rules of the Member State concerned.

     "17. Consequently, in so far as national law allows the employment relationship to be altered in a manner unfavourable to employees in situations other than the transfer of an undertaking, in particular as regards their protection against dismissal, such an alternative is not precluded merely because the undertaking has been transferred in the meantime and the agreement has therefore been made with the new employer. Since by virtue of Article 3(1) of the directive the transferee is subrogated to the transferor's rights and obligations under the employment relationship, that relationship may be altered with regard to the transferee to the same extent as it could have been with regard to the transferor, provided that the transfer of the undertaking itself may never constitute the reason for that amendment."

    Finally, in Rask (case C-209/91) [1992] E.C.R. I-5755 the Court said:

     "28. Consequently, in so far as national law allows the employment relationship to be altered in a manner unfavourable to employees in situations other than the transfer of an undertaking, in particular as regards their terms and conditions of remunerations, such an alteration is not precluded merely because the undertaking has been transferred in the meantime and the agreement has therefore been made with the new employer. Since by virtue of Article 3(1) of the Directive the transferee is subrogated to the transferor's right and obligations under the employment relationship, that relationship may be altered with regard to the transferee, to the same extent as it could have been with regard to the transferor, provided that the transfer of the undertaking itself may never constitute the reason for that amendment (judgment in Daddy's Dance Hall, paragraph 17)   . . .

     "31. Consequently, the reply to the third question should be that Article 3 of the Directive is to be interpreted as meaning that, upon a transfer, the terms and conditions of the contract of employment or employment relationship relating to wages, in particular those relating to the date of payment and the composition of wages, cannot be altered even if the total amount of the wages remains the same. The Directive does not, however, preclude an alteration of the employment relationship with the new employer in so far as the applicable national law allows such an alteration to be made in situations other than the transfer of an undertaking. Furthermore, the transferee is also bound to continue to observe the terms and conditions of employment agreed in any collective agreement on the same terms applicable to the transferor under that agreement, until the date of termination or expiry of the collective agreement or the entry into force or application of another collective agreement."

The first issue

    On the basis of these authorities Mr. Bean Q.C. for Mr. Baxendale and Mr. Meade contends that the notices of dismissal stated to have effect on 28 August were nullities because the reason for them was the transfer which took place at midnight on 31 August 1992. It follows that the contract of employment (and the employment) continued unchanged save that B.F.L. stood in the shoes of N.F.D. The employees were employed on the same terms. They could be employed on better terms; there could, however, be no "downward variation by consent of the terms by reason of the transfer." This it is said is supported by statements in the judgments of the European Court that the existence of a contract of employment is subject to the observance of the mandatory provisions of the Directive and in particular to Article 4(1) (Wendelboe, Ny M/lle Kro, Bork (supra)). The Directive aims:

     "to ensure as far as possible, that the employment relationship continues unchanged with the transferee, in particular by obliging the transferee to continue to observe the terms and conditions of any collective agreement Article 3 and by protecting workers against dismissal motivated solely by the fact of transfer." (Article 4(1)) (Mickelsen's case).

    He says that Article 3 and Regulation 5 are not to be limited to giving against the transferee claims for damages or compensation which could have been claimed against the transferor, not least since such claims are not always available, e.g. if an employee has not completed a qualifying period.

    Mr. Elias Q.C. for Wilson also contends that the purported dismissal is a nullity on broadly the same grounds and in reliance on the same decisions as Mr. Bean Q.C. The employee on the transfer automatically becomes for all purposes employed by the transferee and if the latter refuses to employ him that constitutes an effective dismissal only if the transferee can establish an eto reason falling within Regulation 8(2). The employees cannot waive their rights to continue employment. Neither the transferor nor the transferee, nor the two acting together, can defeat the object of the Directive and the Regulations by serving notices of dismissal which fall outside Regulation 8(2). There is no justification for limiting the transferee's obligations to the "secondary obligations" of paying compensation or damages.

    Though appreciating the force and skill of their arguments I do not accept them.

    In my opinion, the overriding emphasis in the European Court's judgments is that the existing rights of employees are to be safeguarded if there is a transfer. That means no more and no less than that the employee can look to the transferee to perform those obligations which the employee could have enforced against the transferor. The employer, be he transferor or transferee, cannot use the transfer as a justification for dismissal, but if he does dismiss it is a question for national law as to what those rights are. As I have already said, in English law there would as a general rule be no order for specific performance. The claim would be for damages for wrongful dismissal or for statutory rights including, it is true, reinstatement or re-engagement where applicable. It may be in other countries that an order for specific performance could be obtained under the appropriate domestic law and that on this approach different results would be achieved in different Member States. That I do not find surprising or shocking. The Directive is to "approximate" the laws of the Member States. Its purpose is to "safeguard" rights on a transfer. The "rights" of an employee must depend on national rules of the law of contract or of legislation. There is no Community law of contract common to Member States, nor is there a common system or remedies. The object and purpose of the Directive is to ensure in all member states that on a transfer an employee has against the transferee the rights and remedies which he would have had against the original employer. To that extent it reduces the differences which may exist in the event of a change of employers as to the enforcement by employees of existing rights. They must all provide for enforcement against the transferee of rights existing against the transferor at the time of transfer. It seems to me that the Court has clearly recognised that the precise rights to be transferred depend on national law. But neither the Regulations nor the Directive nor the jurisprudence of the Court create a community law right to continue in employment which does not exist under national law.

 It is said that this is not an adequate remedy because some employees do not have statutory rights--e.g. those in the United Kingdom who have not been employed for a qualifying period--but that is inherent in the differences which exist in the laws of the Member States and seems to me to derive from the wording and limited purpose of the directive.

    Thus, where there is a transfer of an undertaking and the transferee actually takes on the employee the contract of employment is automatically transferred so that, in the absence of a permissible variation, the terms of the initial contract go with the employee, who though he may refuse to go, cannot as a matter of public policy waive the rights which the Directive and the Regulations confer on him. Where the transferee does not take on the employees who are dismissed on transfer the dismissal is not a nullity though the contractual rights formerly available against the transferor remain intact against the transferee. For the latter purpose, an employee dismissed prior to the transfer contrary to Article 4(1), i.e. on the basis of the transfer, is to be treated as still in the employment of the transferor at the date of transfer so as to satisfy the rule in Wendelboe as consistently followed, e.g. in Ny M/lle Kro.

    The Court has said that the employees' rights are safeguarded by "enabling them to remain in employment with the new employer on the terms and conditions agreed with the transferor" (Bork) or by "making it possible for them to continue to work for the new employer on the same conditions as those agreed with the transferor" (Katsikas), or, so far as possible, safeguarding employees' rights by "allowing them to remain in employment with the new employer on the terms and conditions agreed with the transferor" (Daddy's Dance Hall para. 9). The emphasis is on the same terms and conditions applying if the employment is continued. I do not read, however, any of these expressions as meaning that the transferee is bound actually to take on an employee who has been dismissed, whether because of the transfer or for independent reasons, and to give him the same work as he had before. They mean that if he does take the employee he takes him on the terms of the employment with the transferor, i.e. there is a deemed novation by the two willing parties. If the transferee does not take the employee because the latter has already been dismissed by the transferor, or because he himself dismisses the employee on the transfer, then he must meet all of the transferor's contractual and statutory obligations unless (a) the employee objects to being employed by the transferee or (b) the or the principal reason for dismissal is an economic, technical or organisational reason entailing changes in the workforce when the employee is not to be treated as unfairly dismissed and when for the purposes of the 1978 Act and the 1976 Order the employee is to be regarded as having been dismissed for a substantial reason justifying the dismissal as fair.

    This approach seems to me to be borne out by a recent decision of the Court (Sixth Chamber) in Jules Dethier Equipement S.A. v. Dassy and Sovram (case 319/94) [1998] I.R.L.R. 266. As to the question referred, the Court said:

     "By the second part of the . . . question, the national court essentially seeks to ascertain whether employees unlawfully dismissed by the transferor shortly before the undertaking is transferred and not taken on by the transferee may claim, as against the transferee, that their dismissal was unlawful."

    On the basis that (a) employees dismissed before the undertaking was transferred contrary to Article 4(1) must be regarded as still employed by the undertaking by the date of transfer and (b) the rules of the Directive, in particular those concerning the protection of workers against dismissal, cannot be derogated from in a manner unfavourable to employees, the Court said:

     "41. Therefore, the contract of employment of a person unlawfully dismissed shortly before the transfer must be regarded as still extant as against the transferee even if the dismissed employee was not taken on by him after the undertaking was transferred.

      "42. For those reasons, the answer to the second part of the second question referred for a preliminary ruling must be that employees unlawfully dismissed by the transferor shortly before the undertaking is transferred and not taken on by the transferee may claim as against the transferee, that their dismissal was unlawful."

    It is to be noticed in that case that Mr. Dassy who had been employed by Sovram had been dismissed by the liquidator of Sovram whose assets subsequently were transferred to Dethier. Mr. Dassy claimed moneys due by way of pay in lieu of notice, holiday pay and bonuses. The paragraphs of the judgments which I have set out seem to me clearly to proceed on the basis that the dismissal had taken effect. Mr. Dassy was thus not taken on by Dethier and there is nothing in the Court's judgment to say that he must still be permitted actually to work for Dethier. His dismissal by Sovram was however unlawful so that he could claim against Dethier the moneys which would have been due from Sovram. Thus, when the Court says the contract of employment "must be regarded as still extant as against the transferee" it means for the purpose of enforcing national rights against the transferee and not for the purpose of treating dismissal as ineffective, the employee having a right to continue employment with Dethier. Nor, it should be added, was there in the case of Mr. Tellerup or Mrs. Rask any suggestion that having been dismissed they continued to be entitled to work on the terms agreed with the transferee because the dismissal was ineffective.

    Your Lordships' attention was drawn to the decision of the Employment Appeal Tribunal in Cornwall County Care Ltd. v. Brightman [1998] I.R.L.R. 228 which rejected as unreal and as giving rise to serious practical difficulties the notion of a dismissal being a nullity unless falling within Regulation 8(2) on the basis of economic, technical or organisational reasons entailing changes in the workforce. There is much force in their criticism of that approach.

    In Litster v. Forth Dry Dock & Engineering Co. Ltd. (supra) the receiver of Forth Dry Dock (F.D.D.) agreed to sell the assets of the business to Forth Estuary Engineering Ltd. (F.E.E.) and did so at 4.30 p.m. on 6 February 1994. F.D.D. dismissed the appellant employees at 3.30 p.m. on that day. The Industrial Tribunal and the Employment Appeal Tribunal held that the employees were employed immediately before the transfer, that they had been unfairly dismissed and that they were entitled to compensation against the transferee, F.E.E. The Court of Session held that they had not been employed immediately before the transfer so that they were not entitled to the benefit of the Regulations. Your Lordships House held that, reading the Regulation as one adopted to give effect to the Directive, it was right to read into Regulation 5(3), as the Court of Justice had read into Article 3 in its judgement in Bork, after the words "immediately before the transfer" the words "or would have been so employed if he had not been unfairly dismissed in the circumstances described in Regulation 8(1)."

    It is to be noticed that in that case the appellants were seeking compensation for unfair dismissal by the transferor. They did not, so far as I can see in the report, contend that their actual employment continued because the dismissal was a nullity. It has been suggested on behalf of the employees in the present cases that in a number of passages it was indicated that the employment continued. Thus, e.g., at p. 577G Lord Oliver of Aylmerton refers to the employment as being "statutorily continued with the transferee" and at p. 575H Lord Oliver said that a dismissal effected before and solely because of transfer is "in effect, prohibited and is, for the purpose of considering the application of article 3(1), required to be treated as ineffective." Lord Templeman at p. 555E-F said that the transferee could not ask the transferor to dismiss prior to the transfer taking place nor "dismiss the workers himself after the transfer has taken place."

    The speeches of Lord Keith of Kinkel, Lord Oliver and Lord Templeman (with whom Lord Brandon of Oakbrook and Lord Jauncey of Tullichettle agreed) do not, however, read as a whole give support to the contention that a dismissal prior to, or after, a transfer is a nullity so that the actual employment continues. Thus Lord Keith at p. 554F-H says that if there is a dismissal before transfer then, for the purposes of Article 3(1) and Article 5(3) and Regulations 5(1) and 8(1), the employees are to be "treated" or are "deemed" to have been employed by the undertaking at and immediately before the time of transfer. Lord Oliver at p. 562G-H says that the scope and purpose of the Directive and the Regulations is to ensure that on any transfer "the employment of the existing workers in the undertaking is preserved or, if their employment terminates solely by reason of transfer, that their rights arising out of that determination are effectively safeguarded." Lord Oliver analyses the effect of a dismissal at p. 568. The transfer operates as a unilateral repudiation by the employer of his obligations under the contract and thereby as a dismissal.

    Lord Oliver said, in addition to the passage which I have already quoted:

     "But it has always to be borne in mind that the purpose of the Directive and of the Regulations was and is to 'safeguard' the rights of employees on a transfer and that there is a mandatory obligation to provide remedies which are effective and not merely symbolic to which the Regulations were intended to give effect. The remedies provided by the Act of 1978 in the case of an insolvent transferor are largely illusory unless they can be exerted against the transferee as the Directive contemplates and I do not find it conceivable that, in framing Regulations intending to give effect to the Directive, the Secretary of State could have envisaged that its purpose should be capable of being avoided by the transparent device to which resort was had in the instant case." (p. 576G-H)
     "The provision in regulation 8(1) that a dismissal by reason of a transfer is to be treated as an unfair dismissal, is merely a different way of saying that the transfer is not to 'constitute a ground for dismissal' in the circumstances described in regulation 8(1)." (p. 577B)

    It is in my view clear, as Mr. Underhill Q.C. submitted, that Lord Oliver was regarding the dismissal, if unfair, as being effective to terminate the working relationship so that there was nothing of that to pass to the transferee. The contract of employment in his view was deemed to be kept alive only for the purpose of enforcing rights for breach of it or for enforcing statutory rights dependent on the contract of employment and not for the purpose of creating an obligation which did not exist under domestic law to continue with the working relationship to the transferee. This approach it seems to me is wholly consistent with the opinion I have expressed and with what I take to be the continuous approach of the European Court of Justice.

    It is to be noticed that in the cases of both Mr. Meade and Mr. Baxendale, the men received substantial payments on the basis that the dismissal had been effective, i.e. that their employment was terminated. That seems to me to be not only realistic but legally the result.

    It follows that the Regulations give effect to and are consistent with the Directive.

    It remains to be considered whether your Lordships are bound to refer the first issue to the European Court of Justice pursuant to Article 177, third paragraph. In my opinion, having considered all the cases to which I have referred, the Court of Justice has already indicated with sufficient clarity the answer to the first point of law which is raised in the present case. On that basis, although I have given the matter anxious consideration in the light of the wording of Article 177 and of the Court's judgment in CILFIT v. Ministro Della Santa [1982] E.C.R. 3415, it does not seems to me to be necessary or obligatory for your Lordships to refer a question in order to give judgment in the present case.

    Accordingly it is not strictly necessary to deal with the second issue which has been raised as to whether variation of the terms of employment could lawfully be agreed between the parties. Since the matter has been fully argued, particularly in the case of Wilson, I express my opinion on the point.

The Second Issue

    B.F.L. contends that if the dismissals were nullities and the contracts of employment were transferred to B.F.L. then those contracts were varied when Mr. Meade and Mr. Baxendale agreed B.F.L.'s letter of 20 August 1992 or at any rate by their continuing to work on B.F.L.'s terms for two years and by signing the revised statements of terms several months into their employment with B.F.L. The Directive, it is said, cannot have intended to rule out genuine agreements as to variations taking place in the context of the transfer; in any event the Court's statement in Daddy's Dance Hall paragraph 17 that "the transfer of the undertaking itself may never constitute the reason for that amendment" can only relate to the situation where the amendment is agreed as part of the process of transfer itself. The prolonged acceptance of the new terms in both cases (as the Industrial Tribunal in Mr. Baxendale's case accepted) can only mean that the new terms were contractually agreed. The employees reply that the letters of 22 and 25 January 1993 were on an erroneous basis and that the statement of terms did not constitute a new contract. They rely on the finding of Beldam L.J.:

     "that the reason for the changes [in the letters of January 1993] was connected with the transfer and there was no evidence of any other reason why B.F.L. offered employment on the changed terms and conditions. . . I would conclude that the transfer or a reason connected with it remained the effective reason for the changes and accordingly would allow the employees' appeals."

    Contrary to what Beldam L.J. appears to have thought it seems to me that the Industrial Tribunal was satisfied that Mr. Baxendale had effectively accepted the new conditions. In Mr. Meade's case it was not necessary for the Industrial Tribunal to consider the question of variation since they held that the dismissals were effective.

    The question as to whether and in what situations, where there has been a transfer and employees have accepted the dismissal, claimed compensation based on it and worked for a long period after the transfer, there can be a valid variation by conduct is not an easy one. I do not accept the argument that the variation is only invalid if it is agreed on or as a part of the transfer itself. The variation may still be due to the transfer and for no other reason even if it comes later. However, it seems that there must, or at least may, come a time when the link with the transfer is broken or can be treated as no longer effective. If the appeal turned on this question I would find it necessary to refer a question to the European Court under Article 177 of the Treaty both in the case of Mr. Meade and in the case of Mr. Baxendale. Since in my view the dismissal was effective so that no question of variation falls to be considered it is not necessary for your Lordships to decide the matter or to refer a question to the European Court.

    In Mr. Wilson's case the parties take the same stance as in Baxendale and Meade as to whether the dismissals were valid. If there was no valid dismissal the position on the facts, in Wilson's case, however, is very different, though Mr. Elias Q.C. contends that there was not and could not be a valid variation. He says in the first place that if there was no valid dismissal there could not have been a justification under Regulation 8(2) and, in any event, there could not have been an effective variation since the employee's rights were adversely affected by the new terms. The matter was not raised before the Industrial Tribunal. The dismissals arose directly out of the transfer and the Industrial Tribunal did not find that they were due to a Regulation 8(2) "eto" reason. Nor did they find that there had been any change in the workforce which was essential to such a finding of an "eto" reason. Moreover, it is submitted that the Industrial Tribunal could not have done so since the dismissals were for redundancy and it is not a justification for the dismissals that they could have been effected on that other basis. Nor if the dismissals are nullities can there be a justification of a variation by analogy with an "eto" defence under Regulation 8(2) which only applies if there has been a dismissal.

    The employers contend that there can be an alteration of the terms and conditions of employment on or after a relevant transfer so that if the reasons are connected with the transfer the employee will be able to claim for unfair dismissal if he treats the imposition of the terms as a constructive dismissal. If he accepts the terms then that is the end of the matter. Here the employees had an option to stay with L.C.C. or to go to St. Helens on new terms. They chose the latter alternative and only a year or so later sought to insist on the old terms. If the transferee cannot safely agree terms to bring his new employees into line with existing employees' standard terms and conditions, that will discourage employers from taking over new businesses or lead to the transferee dismissing transferred employees.

    It seems to me clear, as Miss Booth Q.C. contended, that the Industrial Tribunal in Wilson's case found on the evidence before it, and the Court of Appeal accepted, that the Home could not continue unless there were radical organisational changes which would reduce the cost of running the school. L.C.C. could not or would not continue to carry the existing costs. St. Helens could not take over the running of the school with those costs and without organisational changes and reduced costs. Those changes were for an economic or organisational reason and entailed a change in the workforce since the number of employees at the school was considerably reduced, whether or not the "eto" defence can strictly be relied on in the present circumstances. The staff had the option of staying with LCC or going to St. Helens on the new terms to give effect to these economic and organisational reasons. In the circumstances the Industrial Tribunal and the Court of Appeal were entitled to find that the transfer of the undertaking did not constitute the reason for the variation. It was a variation of the terms of employment "to the same extent as it could have been with regard to the transferor" (Daddy's Dance Hall para. 17). That seems to me to be sufficient on the facts to determine the appeal in Wilson's case. But I add that, although on a transfer, the employees' rights previously existing against the transferor are enforceable against the transferee and cannot be amended by the transfer itself, it does not follow there cannot be a variation of the terms of the contract for reasons which are not due to the transfer either on or after the transfer of the undertaking. It may be difficult to decide whether the variation is due to the transfer or attributable to some separate cause. If, however, the variation is not due to the transfer it can, in my opinion, on the basis of the authorities to which I have referred, validly be made.

Conclusion

    In the result, however, I would allow the appeal of British Fuels Ltd. in both Mr. Baxendale's and Mr. Meade's cases and I would dismiss the appeal of Mr. Wilson and others against St. Helens Borough Council.

LORD STEYN

My Lords,

    I have had the advantage of reading a draft of the speech of my noble and learned friend Lord Slynn of Hadley. For the reasons he has given I too would allow the appeal of British Fuels Ltd. in both Mr. Baxendale's and Mr. Meade's cases and dismiss the appeal of Mr. Wilson and others against St. Helens Borough Council.

LORD CLYDE

My Lords,

    I have had the advantage of reading a draft of the speech of my noble and learned friend Lord Slynn of Hadley. For the reasons he has given I too would allow the appeal of British Fuels Ltd. in both Mr. Baxendale's and Mr. Meade's cases and dismiss the appeal of Mr. Wilson and others against St. Helens Borough Council.

LORD HUTTON

My Lords,

    I have had the advantage of reading in draft the speech of my noble and learned friend Lord Slynn of Hadley. I agree with it and for the reasons which he has given I too would allow the appeal of British Fuels Ltd. in the cases of Mr. Baxendale and Mr. Meade and dismiss the appeal of Mr. Wilson and others against St. Helens Borough Council.

 
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