In EXOL Lubricants Ltd v Birch and another UKEAT/0219/14, the Employment Appeal Tribunal considered the meaning of “place of work” for travelling employees. In this case, two tanker drivers were dismissed when they refused to accept a change to their terms and conditions of employment concerning where they parked their lorries overnight, and the issue was whether they had been dismissed by reason of redundancy due to a workplace closure.
The claimants were employed as delivery drivers, using HGVs. They lived in Stockport but the depot where they needed to load up was in Wednesbury and their contracts stated that their place of employment was Wednesbury. The cost of commuting was too high for the claimants and to help them, their employer agreed to make secure parking available for their HGVs in Stockport, near their homes. The employees would drive from there to Wednesbury every day. This journey was treated as working time and the employees were paid for it. All of the other HGVs were parked at the depot in Wednesbury.
The employer felt it could no longer justify paying for the secure parking in Stockport and it gave notice to the claimants that it was terminating this arrangement. The parties were unable to agree a compromise position that would enable the claimants to commute to Wednesbury each day without having to use the secure parking in Stockport and the claimants were dismissed. Initially, the proposed reason for the dismissal was some other substantial reason justifying dismissal (SOSR) but, in the event, the claimants were dismissed by reason of redundancy.
The employer argued that, as it no longer wished the claimants to keep their lorries at Stockport, its requirement for lorry driving in Stockport had diminished and the case was therefore within the meaning of section 139(1)(a)(ii) of the Employment Rights Act 1996 (employer ceasing “to carry on… business in the place where the employee was… employed”) and therefore there was a redundancy situation. The two employees brought claims for unfair dismissal and breach of contract.
Employment tribunal decision
The employment tribunal rejected the employer’s defence on the basis that the claimants' place of work was not in Stockport but in Wednesbury because that was where their working day began and ended. The tribunal found that no potentially fair reason for dismissal had been made out and the employer appealed.
Employment Appeal Tribunal decision
The Employment Appeal Tribunal (EAT) upheld the tribunal's decision, finding that in relation to the meaning of the phrase “the place where the employee was . . . employed”:
“1. In cases of someone like a delivery driver, who has no fixed place where he carries out his duties, in determining the place where he was employed within the meaning of s 139, it is proper but by no means conclusive to have regard to the contractual provision.
2. It is appropriate to consider, depending on the facts of the case, any connection he may have with a depot or head office or something like that.”
Both of those issues were relevant in this case. The claimants had a close connection with the Wednesbury depot, as that is where they had to take their lorries every day to be loaded, where their instructions came from and the place where they reported.
The EAT found that there was therefore no redundancy situation since there was no diminution in the employer's requirements for delivery drivers - “the job they did, and the need for people to do it remained” - and the drivers' place of work had always been the Wednesbury depot, both contractually and in fact. The Stockport parking facility was not and never had been their place of work and so there had been no workplace closure under section 139(1)(a) of the Employment Rights Act 1996.
The EAT's guidance on what amounts to the place of work for mobile employees is useful, especially as there are relatively few cases on this area of redundancy law.
It seems like the employer would have had a better chance of succeeding had it relied on "some other substantial reason" as it originally proposed, with the judge commenting: “Had the respondents sought to justify the dismissals by reason of SOSR rather than redundancy, other considerations may have applied”.
This would be the more common route where there is a refusal to accept changes to terms and conditions and has the added advantage of not requiring the employer to make a statutory redundancy payment. It is not clear why the employer changed tack, although this appears to have occurred after the claimants raised grievances and instructed lawyers. A late application was made to add SOSR as a potentially fair reason for dismissal at the tribunal hearing itself but this was rejected by the employment judge and the EAT commented that to run the argument at that point would have been extremely difficult. The better course may have been to run the SOSR argument and plead redundancy in the alternative at an earlier stage.