In the case of Gwynedd Council v Barratt [2021] EWCA Civ 1322 the Court of Appeal has upheld an employment tribunal’s finding that a local authority was liable for the dismissal of two teachers at a community school by reason of redundancy despite the decision being taken by the governing body.
Issue
The case concerned a claim brought by two teachers for unfair redundancy dismissal. The claim was brought against the local authority. The local authority argued (amongst other things) that the dismissal of the teachers was fair and, even if it was found to be unfair, that the local authority could not be held liable for the decisions taken by the governing body to (i) dismiss the teachers and (ii) not offer them alternative employment at another school. They said this was because governing bodies were independent in law and therefore liability for the decisions attached to them and not the local authority.
Finding
The court disagreed with the argument advanced by the local authority. They considered the Staffing of Maintained Schools (Wales) Regulations 2006 (the Regulations) and the Education (Modification of Enactments Relating to Employment) (Wales) Order 2006 (the Order). The court concluded that:
- The Order deemed the governing body of the maintained school employing a teacher to be the employer for certain purposes, but that did not mean that the governing body was the de facto employer of the teachers at its school or that the teachers had two employers.
- The local authority remained the teachers’ employer, save for limited purposes such as the exercise of powers under the Regulations and even then, the Order only applies where the governing body has actually exercised its power under the Regulations. In the present case this never happened. The Order was therefore irrelevant, and the local authority remained the teachers’ employer at all material times and for all material purposes.
- Furthermore, the Regulations did not produce the result that when a teacher is dismissed during a reorganisation of a local authority’s schools there is no respondent against which they can bring an effective claim. The local authority, as employer, remains subject to its obligations under the Employment Rights Act 1996. These include, where teachers are made redundant, the obligation to ensure that a fair process is followed.
Comment
Although the case was decided on the basis of the Welsh Regulations and Order, we expect that a similar finding would be made under the Education (Modification of Enactments Relating to Employment) (England) Order 2003. As with the Welsh Order, the English equivalent of the order sets out a number of claims which can be brought by employees whereby, if the governing body is found to be exercising its ‘employment powers’ (for example, powers of appointment, suspension, conduct and disciplinary and dismissal) the governing body will be treated as the employer, rather than the local authority. However, as the court in Gwynedd Council v Barratt found, this does not mean that the governing body will be the de facto employer in all circumstances – the local authority will remain the employer, except for in the case of the limited instances which are set out in the English equivalent of the Order and provided those powers have actually been exercised by the governing body.
The case highlights a common issue in the sector relating to who the employer is and who liability attaches to, which is not always clear. Local authorities may be quick to argue that liability rests firmly with the governing body for all decisions it takes, however this is not always the default position and it very much depends on the circumstances of the case and what powers are being exercised by the governing body.
The dismissal of the teachers was also found to be unfair for a variety of reasons including a failure by the local authority to consider redeploying the teachers to one of its other schools in the area. This aspect of the decision may well have wider ramifications, given it is not generally accepted that employees made redundant in one (community) school have a right to be considered for vacancies in another (community) school, or indeed across the broader local authority.
This reminder of the local authority’s legal responsibility will also serve to sharpen the focus on situations where it is ambiguous whether a school is following local authority advice or not, it being generally the position that the authority will remain financially responsible for matters over which they have some control (and the school follows the authority’s advice). Continuing pressure on local authority budgets (particularly in consequence of COVID) may either encourage more de-delegation, reducing funds available to schools, or an authority who is quick to push financial (if not legal) responsibility back to governing bodies.