England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL

		Royal Courts of Justice Strand London WC2 Tuesday, 8th October 2002

1. LORD JUSTICE PILL: This is an appeal against a decision of the Employment Appeal Tribunal (His Honour Judge Levy QC presiding), sent to the parties on 14th January 2002, dismissing an appeal by CPL Distribution Limited ("the appellants") against the unanimous decision of an Employment Tribunal held at Sheffield on preliminary points. That decision was sent to the parties on 10th April 2001.
2. There is no appeal against the decision of the Employment Tribunal that:

"On the occasion of the taking on by [Gateway Fuels Ltd (`Gateway')] of a concessionary coal contract formerly operated by [the appellants], there was a relevant transfer of part of the undertaking of [the appellants] to [Gateway] pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 1981, Regulation 3."

3. It had been conceded that the concessionary coal contract was, in the hands of Gateway, an economic entity for the purpose of the regulations and transfer. The appeal is against the finding of the tribunal that Mrs M A Todd ("the respondent") was not assigned to that part of the undertaking transferred. The hearing had been concerned with applications by nine employees. Of those where dispute remained, three were held to have been assigned to that part of the undertaking transferred and four, including Mrs Todd, were found not to have been so assigned.
4. Former employees of the British Coal Corporation and its predecessors were entitled to receive free solid fuel, known as concessionary fuel. In 1995 the Department of Trade entered into a contract with the appellants to supply and distribute the concessionary fuel (which was in this case coal) in five of the six Coal Corporation regions. In 1999 the Department of Trade invited tenders for a new contract and Gateway were successful in their tender for all six regions. The contract was to come into effect on 3rd April 2000.
5. Many of the appellants' employees working on the concessionary coal contract became employees of Gateway and for that and other reasons the tribunal held that there was a relevant transfer from the appellants to Gateway "of the undertaking comprised by the concessionary coal contract".
6. Mr J M Brennan was the regional manager for the appellants and in 1997 he became manager of the concessionary coal side of the appellants' business. He was subsequently given duties as business acquisitions manager. The respondent had been his personal assistant since 1993 and, under her written contract, was appointed as "Personal Assistant to the Area General Manager (North Midlands)". It was stated that she was "responsible" to Mr Brennan. The tribunal found that the respondent continued to perform that task "whatever particular duty he was carrying out".
7. It was argued on behalf of the appellants that the respondent was assigned to that part of the undertaking transferred. Reliance was placed on the fact that the majority of the respondent's typing work was related to the concessionary coal contract. Mr Brennan remained in the employment of the appellants after the transfer.
8. The Employment Tribunal found, at paragraph 22:

"Mrs Todd was employed specifically to be the personal assistant of Mr Brennan and they were both based at the Edwinstowe Depot of CPL. Mrs Todd had been Mr Brennan's PA since January 1993 when Mr Brennan was the Regional Manager for a predecessor of CPL, namely BFL. It was not until 1997 that Mr Brennan became the manager of the concessionary coal side of the business. Subsequently Mr Brennan was given additional duties as Business Acquisitions Manager. Mrs Todd continued to be Mr Brennan's PA whatever particular activity he was carrying out. The respondents have placed considerable weight on a log of correspondence which Mrs Todd maintained. Mr Brennan, for the purposes of these proceedings, had carried out an analysis of that log showing at the material time that the majority of the typing work was related to the concessionary coal contract. Mr Brennan continues to be employed by CPL as business acquisitions manager but it appears that he was told that this role did not justify the employment of a PA. In these circumstances we find that Mrs Todd was effectively assigned to Mr Brennan (whatever role he happened to be doing) rather than to the concessionary coal contract itself. The correct analysis would appear to be that assuming the role of business acquisitions manager alone did not justify a PA then Mrs Todd was potentially redundant, which is a matter which should have been dealt with by CPL according to appropriate industrial relations practice rather than by her being regarded as assigned to the concessionary coal contract. Accordingly we find that she was not assigned to that contract."

9. The appellants' submission is that the Employment Tribunal erred in law in basing the absence of a transfer on the assignment of the respondent to Mr Brennan as his personal assistant. The question whether the respondent was assigned to that part of the undertaking transferred required an analysis of her function in the company. Because she was his personal assistant, such analysis would involve an analysis of Mr Brennan's function. The answer to the question depends on an analysis of function and cannot be decided on the basis of an assignment to Mr Brennan "whatever role he happened to be doing"; so that if he did not transfer, then neither did she.
10. Mr Clarke QC, for the appellants, invites the court to approach the issue on the basis of a finding of fact by the tribunal that Mr Brennan's function was as manager of the concessionary coal contract. That follows, he submits, from the tribunal's statement at paragraph 17(c) (when considering not the present issue, but whether there was a transfer of undertakings) that Mr Brennan was a "surprising omission" from the list of those not transferred by the appellants. The court should infer, he submits, that the surprise arose because the tribunal had formed the opinion that Mr Brennan was a part of the work force whose function was transferred.
11. By a belated application, Mr Clarke, if he fails on that issue, seeks a remission of the case to the Employment Tribunal on the ground that the decision against an assignment was based on inadequate reasoning.
12. As well as the present parties, Gateway appeared before the Employment Tribunal. They supported the respondent's case that she, and others, were not assigned. Gateway had sought information from the appellants about the work force involved in the relevant contract. The tribunal found that the appellants were reluctant to provide such information but did eventually prepare a document entitled "Proposed concessionary fuel TUPE schedule". It included 93 names. Later, however, and following a re-assessment, the appellants contended that 58 employees had been assigned. On behalf of the respondent and others, counsel submitted to the tribunal that the question should be resolved by considering the time spent by the employees on the concessionary coal contract, the value given to that activity, any contractual terms and the allocation of costs.
13. The tribunal expressed the view that, although the percentage of time spent by an employee on particular work was a relevant factor, it was not the only one. The amount of value given to each part by the employee, the terms of the contract of employment showing what the employee could be required to do and the allocation of costs to the employer of the employee's services between different parts of the business were also considered to be relevant factors. The tribunal stated:

"We also direct ourselves that the question of assignment is one to be considered as a question of fact by the Tribunal without necessarily accepting the basis on which an assessment was made at the material time by the parties."

14. When considering whether there was a relevant transfer, the tribunal expressed surprise, as I have stated, that Mr Brennan's name was missing from the list of those assigned. The test adopted by the tribunal was, in my judgment, a proper one and, indeed, no criticism is made of it.
15. Reference has been made to the decision of the European Court of Justice in Botzen [1985] ECR 519, where the Court accepted the Commission's view of the matter where an issue arose as to whether, in the case of a staff department providing general services, its members could be said to be assigned when one of the operational activities was transferred. The Commission's submission had been, at paragraph 14:

"On the other hand, the Commission considers that the only decisive criterion regarding the transfer of employees' rights and obligations is whether or not a transfer takes place of the department to which they were assigned and which formed the organisational framework within which their employment relationship took effect."

16. In this court, in Gale v Northern General Hospital NHS Trust [1994] IRLR 2992, a case in which the position of a trainee doctor who had a part of his training at a particular hospital was considered, Lord Bingham MR stated, at paragraph 12:

"He was not, in my judgment, part of the human stock belonging to the Northern General Hospital, but was somebody who was at the behest of the health authority completing his training there."

17. That the test was applied to the other employees whose cases were in issue before the Employment Tribunal is demonstrated by the reasoning of the tribunal in each case.
18. Mr Clarke's submission is that, having stated the correct test, the tribunal did not apply it. He accepts that, if the evidence was that one half of the work of the employee concerned was outside the undertaking transferred, a finding that the employee was not assigned would be justified.
19. As expressed, the finding of the tribunal that the respondent was "effectively assigned to Mr Brennan (whatever role he happened to be doing) rather than to the concessionary coal contract itself" is open to criticism on the basis advocated by Mr Clarke. It could suggest that Mr Brennan's function and that of his personal assistant was immaterial and that whether she was assigned depended on whether he was assigned, regardless of the work he was doing.
20. The issue turned on an assessment of the work done by the respondent and the extent to which it was concerned with the concessionary coal contract. Since she was the personal assistant to Mr Brennan, the nature of his work was likely to be an important factor in the decision. The findings of the tribunal were:

(a)Mr Brennan was a regional manager;

(b)in 1997 he became the manager of the concessionary coal side of the business;

(c)he was given additional duties as business acquisitions manager;

(d)the schedule prepared by the appellants substantially inflated the number of employees claimed to be assigned, as evidenced by the subsequent reduction in numbers from 93 to 58;

(e)in its "refined" form, as the tribunal described the revised list, the name of Mr Brennan did not appear;

(f)the only evidence that most of the respondent's work was in concessionary coal was a log showing that the majority of her typing work was related to the concessionary coal contract;

(g)the tribunal apparently accepted the submission of the appellants that the continuing role of business acquisitions manager alone did not justify a personal assistant.

21. On the limited evidence available to them, the tribunal were, in my judgment, entitled to conclude that the respondent was not assigned to the relevant undertaking. I am not prepared to infer from the tribunal's expression of surprise that Mr Brennan was not on the list (in the absence of further evidence to support it) that they had come to the conclusion that Mr Brennan was part of the "human stock" belonging to the concessionary coal contract. That oblique reference to him does not justify a finding that the tribunal had reached that conclusion. When they expressed their surprise, the tribunal were dealing with another aspect of the case and were expressing surprise that the management constituent of the undertaking did not transfer; but there could well be reasons for that other than that claimed. No explanation was given by the appellants (at any rate, as appears from the extended reasons of the tribunal) as to why Mr Brennan was not on the list. The tribunal make the plainest references at paragraph 22 to Mr Brennan's work as business acquisitions manager. It was open to the appellants to provide further evidence, to investigate the position of Mr Brennan and to give an explanation as to why his name had not been placed by the appellants themselves on the relevant list; but, on the material before the court, they did not do so.
22. Neither does the reference in paragraph 22 to the amount of typing resolve the issue in the appellants' favour. In stating the test, the tribunal had expressly stated, and rightly so, that a number of factors were to be considered. They were entitled to come to the conclusion that the typing factor was not decisive. The typing log was far from conclusive. A personal assistant would normally have broader duties than typing.
23. I am not prepared to draw the inference requested. That being so, on the evidence, the fact that Mr Brennan was not assigned is a strong pointer in the direction that he and his personal assistant were not part of the human stock of the concessionary coal enterprise. Mr Brennan undoubtedly had other duties, and it cannot be inferred from the fact that those duties alone did not justify a personal assistant that they were not a major part of his work.
24. There was no evidence, in my judgment, and no finding that Mr Brennan should properly be assigned to the concessionary coal part of the appellants' business. The tribunal clearly attached importance to the respondent's position as a personal assistant. She was personal assistant to a manager who, on the material before the court, did not claim, nor was it claimed on his behalf, that his work was mainly devoted to the concessionary coal contract. Implicit in the tribunal's findings in relation to his job is a conclusion that the respondent should not, on the evidence, be assigned to that part of the appellants' business constituted by the concessionary coal contract.
25. The tribunal's conclusion that there was no assignment is, in my judgment, justified on the evidence. The respondent's role as personal assistant did not, as such, justify their conclusion. But having regard to Mr Brennan's own position of not being on the transfer list, it was an important factor in deciding whether the respondent was transferred.
26. The reasoning in the paragraph dealing with Mrs Todd is not happily expressed. In my judgment, however, underlying paragraph 22 is a finding that Mr Brennan had at the time of the transfer substantial duties as business acquisitions manager. There is no evidence to the contrary in the relevant paragraph. The tribunal twice mention his duties in that regard. Mr Clarke submits that the tribunal were under an obligation to grapple with the evidence. They should have investigated the nature of the operation and the work done by Mr Brennan and his personal assistant. I have already made the comment that it was open to the appellants to provide material on the basis of which a conclusion could be reached.
27. I read paragraph 22 on the basis that a finding is to be read into it that a substantial part of Mr Brennan's time was involved with his activities as business acquisitions manager. Read on that basis, the conclusion at the end of the paragraph that the respondent was not assigned was, in my judgment, justified. The finding that Mr Brennan was so employed leads easily to a finding that, as his personal assistant, the respondent was so employed and was not assigned.
28. For those reasons I would dismiss this appeal.
29. LORD JUSTICE WALLER: I agree.
30. The outcome of this appeal depends on the finding in paragraph 22 relating to Mrs Todd, which has been recited by my Lord, and the possible effect on that finding of the further finding in paragraph 17(c), again referred to by my Lord, that Mr Brennan's omission from the final list was surprising.
31. The submission by Mr Clarke QC, in effect, was that the reasoning in paragraph 22, supported by paragraph 17, comes to this: that the tribunal were finding that Mr Brennan was assigned to that aspect of the concessionary coal side of the business, the subject of the transfer; that he had at the time of the transfer, however, been assigned to a different aspect of the business, the business acquisitions side; and that Mrs Todd, being his personal assistant, simply followed him. The submission was that it was not a proper approach to Mrs Todd's position to reason in that way.
32. I say straight away that if the above did represent the tribunal's reasoning, I would not accept it as legitimate. But it seems to me that, in agreement with my Lord, on a fair reading of paragraph 22 relating to Mrs Todd, what the tribunal were in fact finding was, first, that Mr Brennan was dealing with two aspects of the business for some period of time prior to the transfer; secondly, that one aspect was the concessionary coal and the other was the business acquisitions side; thirdly, that Mrs Todd was his personal assistant and was concerned with both aspects of the business; and fourthly, thus neither Mr Brennan nor Mrs Todd could be said to be assigned to the aspect of the business transferred.
33. So far as the expression of surprise is concerned, it seems to me, again in agreement with my Lord, that the context in which that expression appeared was when the tribunal was considering a transfer. They were expressing surprise that part at least of the management aspect of the contract was not appearing on that list. When looking at that context, however, they were not of course exploring Mr Brennan's actual position nor Mrs Todd's actual position. When they come to do that, they do it in paragraph 22. As it seems to me, it is clear from that paragraph that they are finding that Mr Brennan was not assigned to the concessionary coal side and neither was Mrs Todd.
34. I agree that this appeal should be dismissed.
35. LORD JUSTICE DYSON: This appeal essentially raises a challenge as to the reasoning of the tribunal. We are asked by Mr Clarke QC to infer from the words in paragraph 17, "There are certain surprising omissions, such as Mr Brennan", that the tribunal was of the view that Mr Brennan was assigned to the concessionary coal contract.
36. At paragraph 17, where this phrase appears, the tribunal was not dealing with the issue of who was assigned to the concessionary coal contract but, it being common ground that that contract was an undertaking for the purposes of the regulations, whether it was transferred.
37. In so far as the question of the assignment of Mr Brennan was relevant at all, it was relevant to the question whether Mrs Todd was assigned to the concessionary coal contract, and that was dealt with at paragraph 22. There is nothing in paragraph 22 to indicate that the tribunal thought that Mr Brennan was assigned to the concessionary coal contract. That is clearly shown by the sentence:

"In these circumstances we find that Mrs Todd was effectively assigned to Mr Brennan (whatever role he happened to be doing) rather than to the concessionary coal contract itself."

38. In these circumstances it seems to me that, whatever the reason why the tribunal thought the omission of Mr Brennan from the list was surprising in the context that was being discussed at paragraph 17, that provides far too slender a basis for this court to infer that the tribunal was of the opinion that Mr Brennan was assigned to the concessionary coal contract.
39. 37.The other point made by Mr Clarke involves a criticism of the reasoning in paragraph 22 itself. I agree that some criticisms can properly be made. It seems to me that the tribunal should have made an explicit finding that Mr Brennan was not assigned to the concessionary coal contract and explained why. But in my judgment, on a fair interpretation of their decision, the tribunal were saying that Mr Brennan was not assigned to the concessionary coal contract and that, since Mrs Todd was assigned to Mr Brennan as his PA, she was not assigned to the contract either. It is not suggested by Mr Clarke that there was no evidence to support such a conclusion. There clearly was evidence on the basis of which it was open to the tribunal to find that Mr Brennan was not assigned to the concessionary coal contract.
40. It is unfortunate that the tribunal did not spell out its reasons, but its conclusion was neither perverse nor otherwise erroneous in law. The tribunal directed itself properly as to the correct test to apply: see paragraph 14(b).
41. In these circumstances, despite the cogent submissions of Mr Clarke, I am not persuaded that the shortcomings in the tribunal's reasoning require this appeal to be allowed. I too would dismiss the appeal.
Order:appeal dismissed with costs assessed in the sum of £7,446.35 inclusive of VAT.