King and Others v Aer Lingus Plc

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr. Justice Kearns
• Judgment Date: 08 October 2002
• Neutral Citation: 2003 WJSC-HC 7057
• Date: 08 October 2002
• Docket Number: [1994 No. 7021 P]

KING & ORS v. AER LINGUS PLC

BETWEEN

WILLIAM KING AND ORS

PLAINTIFFS

AND

AER LINGUS pic

DEFENDANT

2003 WJSC-HC 7057

No. 7021P/1994

THE HIGH COURT

Synopsis:

EMPLOYMENT LAW

Contract

Terms - Assurance given to plaintiffs - Whether representation - Whether term of contract - Whether employer owes duty of care to ensure statements made to employees are true - Transfer of undertakings - Collective agreement - Whether "lockout" commensurate with "lay-off" - Redundancy Payments Act 1967, section 11 (1994/7021P - Kearns J - 8/10/02)

King others v Aer Lingus plc - [2002] 3 IR 481

Facts: the plaintiffs, when they had been seconded from the defendant to a connected company of the defendant, TEAM, had been given an assurance by the defendant that "in the...event of TEAM getting into business difficulty [they would] continue to maintain the Aer Lingus fleet as a minimum". They alleged that they had been taken back into less satisfactory positions with lower levels of remuneration set by reference to their earnings in TEAM rather than the earnings to which they would have been entitled had they remained with the defendant. There was a collective agreement between both parties which precluded the defendant from occasioning a lockout on its premises which one of the plaintiffs purported to rely on in relation to a period of time during which he had been laid off by the defendant.

Held by Kearns J that the assurance given to the plaintiffs was both a representation and a term of the agreement and that, insofar as it could be regarded as a representation, the defendants in making it owed a duty to the plaintiffs to ensure that it was true. On returning to the employment of the defendant, the claimants were entitled to do so as if they had never left but that the commitment given to them by the defendant that they would 'continue to maintain the Aer Lingus fleet' was not an open-ended, indefinite or lifetime commitment which would place them in a superior position to those who had not been seconded. They were then entitled to be paid the same levels of remuneration as mechanical engineers employed by the defendant who had not been seconded. They were further entitled to have their seniority fully recognised and to be placed on the appropriate incremental scale as though they had never left Aer Lingus and that equivalent work or compensation in lieu thereof would be available for some reasonable time after returning to employment with the defendant. It could not, however, immunise them from the risk of redeployment or redundancy which faced all the defendant's staff. The words "layoff" and "lockout" were interchangeable in the context of the collective agreement between the plaintiff and defendant and accordingly, the plaintiff was entitled to invoke its protection in respect of a period of time during which he had been laid off.

Citations:

HAGAN & ORS V ICI CHEMICALS & POLYMERS LTD 2002 IRLR 1

BOWERS EMPLOYMENT LAW 5ED 2000 59

RIDEOUT PRINCIPLES OF IRISH LAW 4ED 267

HALSBURY LAWS OF ENGLAND 4ED VOL 16 PAR 581 N 15

REDUNDANCY PAYMENTS ACT 1967 S11

REDUNDANCY PAYMENTS ACT 1967 S12

1 Mr. Justice Kearns delivered the 8th day of October, 2002.

2 In the judgment which I delivered in this matter on the 15 ^thof April 2002, I reserved and left over, with the agreement of both sides, further submissions and consideration of the issues touched upon at pp 57–58 of that judgment.

3 The relevant portion reads:-

"While I have found that for as long as they remained with TEAM, the (i.e. TEAM workers who did not transfer to FLS but who elected instead to return to Aer Lingus) have no complaint about negative pay drift on the basis of any contractual guarantee of pay parity, my finding to that effect obviously cannot be taken as conclusively disposing of all other issues at this stage, including the issue of the lockout in 1993–4 (which however affects only one plaintiff), but, more importantly, the issue in relation to the work offered or available to those staff who have returned to Aer Lingus and who are no longer working in an M & E capacity."

4 It seems appropriate, having regard to the defined agenda which the court undertook, to defer to a later date any submissions the parties may wish to make, particularly with regard to the work circumstances in which the present plaintiffs find themselves following their return from secondment. In other words, are they entitled to maintenance work which accords with their qualifications and experience, or, if such work is not available, are they entitled to compensation or damages in lieu thereof. In this regard, I am thinking in particular of the assurance given to transferring craft workers by Mr. O'Neill's letter of 30 ^th April, 1990 in which he said:-

"In the unlikely event of TEAM getting into business difficulty, existing employees Mali continue to maintain the Aer Lingus fleet as a minimum"".

The court accordingly sat to hear further submissions on these points on the 10 ^th and 11 ^th of July, 2002.

A number of preliminary points may usefully be addressed at the outset. Firstly, I do not propose to recite any further factual detail, given that I believe the facts have been set out sufficiently in the judgment already delivered. No part of the two day hearing before this Court in July consisted of oral evidence, but was confined simply to argument and submissions from both sides.

Secondly, at the invitation of the Court, the defendants clarified their position in relation to the employment status of those Aer Lingus employees who had transferred to TEAM on foot of the arrangements concluded in August 1990. The Court was informed by counsel for Aer Lingus that on the clear understanding no new or additional claim would as a result be forthcoming from any of the present plaintiffs (such assurance being given by plaintiffs counsel), those workers who had transferred to TEAM were now to be regarded as having at all material times remained Aer Lingus employees.

In the light of this development during the course of the hearing, it seems to me that the Court can, without further ado, commence this portion of its adjudication by making a declaration to that effect.

On behalf of the plaintiffs, it is submitted that the claimants were entitled, as of the date of the end of their secondment and on their return to Aer Lingus, to be paid the same levels of remuneration as mechanical engineers in the employment of Aer Lingus who were never seconded and to enjoy the same level of seniority with all that that implies. As part of this submission, it is further contended that the claimants were and are entitled to be provided with work equivalent to or commensurate with the work which they had been trained and employed by Aer Lingus to undertake and on which they had been engaged prior to their secondment, or compensation in lieu thereof.

Further submissions, to which I will later return, were made in respect of the layoff/lockout period.

The various plaintiffs, with the exception of Mr. Flood, have given evidence of the failure of Aer Lingus to grant to them, on returning to the company, the same work or remuneration as that enjoyed by the equivalent Aer Lingus employees who had not been seconded. The plaintiffs evidence was that each of them had been taken back into less satisfactory positions with significantly lower levels Or remuneration set by reference to their earnings in TEAM Aer Lingus rather than the earnings to which they would have been entitled had they remained on in Aer Lingus. Thereafter increments to which they would have been entitled based on their seniority and years of service (which were paid to aircraft mechanics in Aer Lingus who were not seconded) had been withheld from them.

It was stressed on behalf of the plaintiffs that no portion of the claim now being advanced related to the pre-1998 situation arising from the negative pay drift sustained by the claimants while working in TEAM, an issue which has been dealt with by the judgment delivered in April last. However, it was argued that a continuing and ongoing loss had been sustained by the claimants since 1998.

In relation to the correspondence which preceded the specific and general agreements ultimately entered into in 1990, Mr. Rogers submitted that the same should be seen not merely as part of the contractual position arrived at between the parties, but also as representations designed to persuade and induce Aer Lingus employees to transfer over to TEAM. He cited and relied upon the judgment of Elias J. delivered on the 19th October 2001 in Hagan & Ors -v- ICI Chemicals and Polymers Limited (2002) IRLR 1–92 as clear authority for the proposition that employers are under a duty to take reasonable care to ensure that statements made to employees in the context of the transfer of an undertaking in which they are employed are true.

Mr. Rogers tied in this authority specifically to the letter written by Mr.O'Neill dated 30th April 1990, in which Mr. O'Neill had stated:-

"In the unlikely event of TEAM getting into business difficulty, existing employees will continue to maintain the Aer Lingus fleet at a minimum."

5 Mr. Rogers submitted that the particular letter was crucial to the case, indicating the extent of the commitment given by Aer Lingus to its employees which clearly involved a commitment as to the future behaviour of the company. He submitted that, if words mean anything, the particular letter must mean that there was an ongoing commitment given by or on behalf of Aer Lingus to the effect that the transferring workers would, if TEAM got into trouble or ceased to exist, be re-employed as maintenance and engineering men in Aer Lingus, and not be given jobs as bag earners, loaders or...