Fighting for your rights
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Three drivers won £60,000 when their employer refused to transfer them to his new firm. Can others learn from this?
Words: Mike Sherrington It's an increasingly common practice for hard-pressed haulage bosses to close one company and open another. But unless this is done properly, and within the provisions of the Transfer of Undertakings Protection of Employment Regulations (TUPE), it can lead to a massive payout at an employment tribunal.
This was highlighted in an employment tribunal settlement earlier this year where three drivers, previously employed by Keith Stokes Transport & Storage Services in Wrexham, North Wales, were together awarded more than £60,000 compensation for unfair dismissal.
“The closure of a company followed by the opening of a new one, often in the name of a previous director of the ‘failed’ company, is very common within the road haulage industry,” says James Bower, spokesman for United Road Transport Union (URTU).
“Because of naivety or deception, many of the new companies then try to enforce poorer terms and conditions on workers, including reduced wages.” The Stokes case, however, did not involve an attempt to worsen terms and conditions, but relied on the fact that three drivers, Peter Glaspole, Peter Darlington and Paul Bryan, were summarily dismissed after it was deemed they had started work for the new company.
Keith Stokes Transport & Storage Services was a general haulier specialising in carrying food packaging in the UK and Ireland. It operated from Unit Three on the Wrexham industrial estate.
“I decided that it was time to get rid of the storage side and someone I knew offered to take it on as a new company,” says director Keith Stokes. “That company failed, so I decided to move to a new smaller unit on the same estate.”
Working for a new company
The new company, Transport and Storage, then moved to Unit 22 on the estate. The three drivers were involved in transferring goods that belonged to customers to the new unit, and because of this, the tribunal decided that they had actually started to work for Transport and Storage.
Glaspole, who had worked for Keith Stokes Transport & Storage Services for 10 years, says: “It was around 2.30pm on 15 March last year when we inished this work. We were told that there was nothing else for us to do and we were dismissed without compensation. We did eventually receive some compensation from the government for redundancy, but this was capped and did not go far.” Glaspole continues: “There were seven drivers employed by the company – two got work with the new company and two left of their own accord, but us three immediately decided to seek legal advice and approached employment solicitor Tudor Williams in Wrexham.
“Once we had done this, we were offered £5,000 each as compensation – but this payment was due to be spread over six months. We rejected this and instead said we would accept £8,000 each, payable in monthly instalments of £2,000. When Stokes refused this, we had no alternative but to go to an employment tribunal,” he adds.
The drivers claim that the company had been in dificulties for two years before the decision to move to new premises and that fuel had to be paid for in cash, as the company was refused credit, and that on more than one occasion they had to pay for fuel out of their own pockets to get home. Keith Stokes denies all the drivers’ allegations.
The pre-hearing review took place in January this year in Shrewsbury. Tudor Williams explains what happened: “The tribunal ruled in our favour on the question that there had been a relevant transfer of undertakings between Keith Stokes Transport & Storage Services. This is because Stokes had transferred customers’ goods and some other employees, including himself, to the limited company. On the day he dismissed our clients – after they had helped transport goods to the new company’s premises – they were dismissed and Stokes started his job as transport manager for the limited company.” The full hearing took place in Mold on 24 June this year, and ruled that the drivers’ dismissal was automatically unfair because the transfer breached regulation 7(1a) of the TUPE Regulations 2006. Peninsula Business Services, the lawyer for Stokes, did not contest this – so all that was left for the tribunal to decide was the amount of compensation each driver should receive.
Bryan got £23,337; Glaspole £22, 205 and Darlington £15,536. Each driver also received an additional two weeks’ wages, as the company was found to be in breach of the regulations in not giving them a contract.
Substantial payout
The three drivers were delighted with the settlement. Bryan said: “It was much more than we thought we would receive because the tribunal added on projected loss of wages, meaning we each received an additional 26 weeks’ pay.” However, Stokes, who was not at the hearing, claims that the tribunal led by judge R Powell set out to make an example of him and says that he is considering an appeal.
But despite the size of the payout, which was considerable when compared to the average £2,000-£3,000 per employment tribunal settlement, the future remains bleak for the three drivers.
Darlington took a minimum wage non-driving job, as he was not entitled to claim beneit because his wife does two part-time jobs, and has since been made redundant. Glaspole has not worked since being dismissed in March 2010, and Bryan suffered a heart attack due to the stress he was under, which included the possible repossession of his home.
Keith Stokes has been advised not to appeal against the tribunal’s ruling. ■