The Employment Appeal Tribunal (EAT) has held in Adekoya v Heathrow Express Operating Co Ltd that a tribunal was wrong to conclude that an employer could rely on the terms of an agreement with a third-party provider of a contractual travel benefit in order to withdraw the benefit when employment terminated.
The claimants were employed by Heathrow Express Operating Company Ltd (Heathrow Express). Heathrow Express is part of the Association of Train Operating Companies (ATOC) (which is now the Rail Delivery Group (RDG)). Membership of ATOC provided discounted rail travel on other members' services. During their employment, the claimants were entitled to a 75% discount on leisure rail travel. The discount scheme was operated by Rail Staff Travel Ltd (RST).
There was no reference to discounted rail travel benefits in the claimants' contracts, but they were sent the ATOC terms and conditions setting out the terms and conditions relating to the travel benefit as part of their contract packs. The ATOC Agreement had to be signed and dated by the employee. It stated that staff who retired or were made redundant with five or more years' service were eligible to retain the travel benefit after termination of their employment. There was a separate agreement between RST and Heathrow Express which provided that the travel benefit could be withdrawn or curtailed in certain circumstances.
In May 2019, RDG (formerly ATOC) provided a notice to Heathrow Express which drew a distinction between staff employed before 31 March 1996 (safeguarded staff) and all other staff (non-safeguarded staff), and confirmed that, from May 2019, only the safeguarded staff who retired or were made redundant would retain the benefit of the discounted travel scheme. The claimants fell within the latter category and were not sent the notice.
In 2020 the claimants took voluntary redundancy. Although they all had more than five years' service, they were told that they would not be entitled to discounted leisure rail travel after termination of employment as they were non-safeguarded staff. They brought breach of contract claims in the tribunal arguing that they had the contractual right to the lifelong benefit of the discounted rail travel scheme.
At a preliminary hearing a tribunal dismissed the claimants' claims. It held that the terms and conditions of the travel discount scheme were incorporated into the claimants' employment contracts, but so too was the agreement between RST and Heathrow Express which stated that the benefit could be withdrawn. The effect of the May 2019 notice was to curtail the benefit in accordance with the incorporated terms and conditions. As the claimants were no longer entitled to the travel benefit when they were made redundant, no claim arose.
The EAT disagreed. It found that the terms between the third party (RST) and the employer were not incorporated into the claimants' contracts. The claimants were not party to the agreement and there was no reference made to it in their contracts or in the ATOC Agreement. Not only had the claimants not been provided with a copy of it, they also did not know of its existence. As the tribunal had been wrong to find that the claimants' contracts were varied so that they were no longer entitled to the rail discount scheme, it had been wrong to find that there was no jurisdiction to hear the claims. The issue was remitted back to the tribunal for reconsideration.
Take note: The decision in Adekoya shows the importance of clarity when it comes to the provision of a contractual benefit via a third-party provider. Employers providing such benefits should ensure that the limits of any commitment to provide these benefits are properly communicated.
