ASBESTOSIS : CONTRACTS OF EMPLOYMENT : DAMAGES : EMPLOYERS’ LIABILITY : MESOTHELIOMA :
TRANSFER OF UNDERTAKINGS : POST OFFICE EMPLOYEES EXPOSED TO ASBESTOS : TRANSFER OF UNDERTAKING TO BRITISH TELECOMMUNICATIONS : TRANSFER OF LIABILITIES : POST OFFICE : CIVIL SERVANTS : CONTINGENT LIABILITIES : CIVIL SERVICE CODE : INTENTION TO CREATE LEGAL RELATIONS : BRITISH TELECOMMUNICATIONS ACT 1981 : s.10(2) BRITISH TELECOMMUNICATIONS ACT 1981 : Sch.2 para.3(2) BRITISH TELECOMMUNICATIONS ACT 1981
The liabilities of the Post Office to employees who were exposed to asbestos whilst working in the telecommunications side of the Post Office’s undertaking were transferred to British Telecommunications by virtue of the British Telecommunications Act 1981 s.10(2).
The claimant (B) sought a declaration that the liability to pay damages to former employees of the Post Office in respect of injuries sustained whilst carrying out work for the telecommunications part of the Post Office’s undertaking was not transferred to B. The telecommunications business of the Post Office was transferred to B’s predecessor by the British Telecommunications Act 1981 in anticipation of the subsequent privatisation of that business. Before the transfer the Post Office was divided, for management purposes, into three parts, one dealing with telecommunications, one with the postal service and the third with the engineering functions of both other parts of the business.
Some of those employed within the engineering function were exposed to asbestos dust and contracted asbestosis or mesothelioma. Since 1981 the executors or dependants of men who had died of mesothelioma had made claims against B and/or the operator of the postal service (R). R took the view that liability for those claims had been transferred to B under s.10(2) of the 1981 Act and the court was asked to decide that issue.
A further issue arose as to whether those who worked in the Post Office before its statutory incorporation and were civil servants appointed by the Postmaster General were employed under a contract of employment. B submitted that the liabilities to former employees of the Post Office remained with the Post Office because they were “liabilities under the contract of employment” within Sch.2 para.3(2) and that paragraph provided that they were transferred only if immediately before the transfer date the employee concerned was employed in the part of the transferor’s undertaking which was transferred; alternatively contingent liabilities were not transferred because a contract that had ceased to exist could not be said to be “comprised in part of the Post Office’s undertaking” within s.10(2).
HELD: (1) The civil servants appointed by the Postmaster General,
including apprentices, were employed under a legally binding contract of employment, R v Civil Service Appeal Board Ex p Bruce (1988) 3 All ER 686 QBD considered and R v Lord Chancellor’s Department Ex p Nangle (1992) 1 All ER 897 QBD applied. Despite the provisions of the Civil Service Code, it appeared that, objectively viewed, there was an intention to create legal relations during the relevant period. Therefore it was unnecessary to treat those who were employees of the Postmaster General in any different way to those who were later employed by the Post Office.
(2) Section 10(2) of the Act, if read according to both its natural meaning and with a purposive approach, referred to all liabilities without limitation and did not exclude liabilities in respect of former employees of the Post Office whose employment had ceased prior to the transfer date. Paragraph 3 of Sch.2 to the Act was no more than part of the mechanism for defining the circumstances in which existing employees would be transferred in the absence of any specific agreement to the contrary. It did not “trump” the natural meaning of the words in s.10(2).
(3) B’s alternative argument failed since the language of s.10(2) was apt to include liabilities arising out of contracts that had come to an end.
(4) Although it was not necessary to decide the point, the better view was that a claim in tort was a claim in respect of a liability “under” a contract of employment within the scope of Sch.2, Martin v Lancashire CC (2000) 3 All ER 544 CA (Civ Div) considered.
(5) The liabilities of the Post Office to those employees who were exposed to asbestos whilst working in the telecommunications side of the Post Office’s undertaking were transferred to B by virtue of s.10(2) of the Act. B’s application for a declaration to the contrary therefore failed.
Claim for declaration refused
 EWHC 8 (QB)
BRITISH TELECOMMUNICATIONS PLC v ROYAL MAIL GROUP LTD (2010)