England and Wales Court of Appeal (Civil Division) Decisions

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

		The Royal Courts of Justice The Strand London Thursday 21 March 2002

Thursday 21 March 2002

1. LORD JUSTICE PILL: This is an application for permission to appeal against a decision of the Employment Appeal Tribunal, Lindsay J presiding, given on 23 February 2001.
2. Upon the hearing of a preliminary point, an Employment Tribunal held at London South had on 13 November 1999 unanimously decided:

"There was a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) ['TUPE'] Regulations 1981 on 31 March 1989 of part of the undertaking previously carried on by London Buses Limited from that company to the Respondent. There has not been any subsequent event or series of events which either alone or together amount to a relevant transfer within the meaning of the Regulations. There has not at any time between the date of incorporation of the Respondent and 30 November 1994 been any transaction or series of transactions which either alone or collectively is/are covered by Council Directive 82/891/EEC and/or any UK Regulations made pursuant to that Directive."

3. The undertaking was the running of a bus service for use by the public.
4. The application for permission has been referred by Mummery LJ for oral hearing with the appeal to follow immediately if permission is granted. Comprehensive oral submissions have been made by Mr Juss, counsel on behalf of the applicants.
5. The issue is as to when the part of an undertaking referred to in the decision of the Tribunal was transferred. The applicants contend that it was transferred not in 1989, as found by the Tribunal, but, by virtue of a scheme under the Transport Act 1984, in 1993. The issue was taken as a preliminary point, so the effect on individual employees of any transfer is not at present for consideration. It is also submitted that there was an appearance of bias in the Employment Tribunal, in that its members were appointed by the Secretary of State.
6. The Employment Tribunal accepted that relevant schemes were made under the provisions of the Transport Act 1984. Mr Juss submits that there can be only one relevant transfer of the undertaking. He submits that the Tribunal erred in law in finding that it had occurred in 1989. It had occurred by virtue of a statutory scheme under seal in 1993. Events in 1989 were merely an informal taking over, if anything. The transfer for the purposes of the Regulations occurred in 1993.
7. The extended reasons of the Employment Tribunal are detailed and comprehensive. They referred to the respondents' directors' report stating that the principal activity of the company was the provision of road passenger transport services within the Greater London area. The report stated that the company commenced trading on 1 April 1989. There was a reference to 650 buses operating from six garages in 1989. An operator's licence had been granted for the period 1 April 1989 to 31 March 1994. London Buses Ltd had surrendered their operator's licence. The Tribunal stated, in my judgment correctly, that:

"The foundation of the law defining the meaning of a transfer of an undertaking for the purposes of the Transfer of Undertakings (Protection of Employment) Regulations 1981 remains Spijkers v Gebroeders Benedik Abbatoir CV [1986] ECR 1119 24/85/ECJ."

8. Paragraphs 11-13 of the judgment of the ECG in Spijkers are set out in the extended reasons of the Tribunal.
9. The Tribunal acknowledged weaknesses in the proposed respondent's case, in particular the lack of documentary evidence as to transfer and inconsistency in the statements made by the witness Mr Elms. The Tribunal concluded (paragraphs 113 and 114):

"We have been concerned that there was absolutely no contemporaneous legal or quasi-legal documentation before us in relation to any transfer with effect from 1 April 1989. We were, in effect, being asked to draw conclusions from secondary evidence. Each of us, and in particular the Chairman, would have expected at least a basic form of hive-down or similar agreement between LBL and the Respondent to take effect from 1 April 1989, or at least contemporaneous memoranda. It may be that the Respondent was in difficulty in obtaining any such documents from LBL, but the fact remains that we were not presented with any such evidence. Miss Banton [counsel for the applicants at that stage], quite rightly in our view, expressed surprise on several occasions during the hearing that there was an absence of such documents.

114. However, it is clear to us that in fact the Respondent took over part of LBL's business from 1 April 1989. We are particularly affected by the contents of the audited accounts to which we have referred. They show that the Respondent was trading, and there is no dispute that any such trading was the running of bus services in south London. The activity of the Respondent was the same as that of LBL. The contents of the accounts are set out above and will not be repeated here. We note the facts relating to the routes taken over by the Respondent, and the granting of the Operator's License. The customers of the business (being the passengers who used the routes) were presumably the same on 1 April 1989 as on 31 March. The assets involved in the business were the same, although for different periods they were 'leased' from LBL or subject to similar arrangements. We find from all the evidence that the employees of that part of the business transferred to the Respondent became employed by the Respondent. We note the potential circularity of the argument. However, one of the criteria to be considered is whether there has in fact been a transfer of the employment of employees. We conclude that there was no material change in the economic entity from 31 March to 1 April 1989. Miss Banton did not suggest that there had been. If it had not been for the statutory background, and the Schemes, we do not see how there could have been any doubt about the matter."

10. Mr Juss submits that there was no evidence to support the findings of the Tribunal. He has emphasised that if the Regulations are to apply, what is to be transferred is an economic entity and not merely an activity. I refer to his submission that the arrangement in 1989 was an informal taking over, but for the purpose of the Regulations the transfer was in 1993 by way of the documents under seal and following the procedures in the 1984 Act.
11. I do not agree with Mr Juss's submission that there was no evidence to support the findings of the tribunal. The conclusion was based on a detailed analysis of evidence in the earlier part of the extended reasons, in the course of which there are extensive references to documents. The Employment Tribunal in reaching its conclusion also had regard to the events of 1993 and there is no doubt that certain matters were, in TUPE terms, not transferred until that stage. Where we have been referred to the documents relied on, they support the findings of the tribunal and Mr Juss has not been able to point to material to a contrary effect which would make the findings of the Employment Tribunal unsupportable or irrational.
12. Mr Juss has referred us to the later decision of the ECJ in Suzen v Zehnacker Gebaudereinigung GmbH Krankehausservice [1997] ICR 662. So far as is material, that decision does not detract from, and indeed applies, the earlier decision in Spijkers. What the ECJ made clear in Suzen was that:

"... the mere loss of a service contract to a competitor cannot by itself indicate the existence of a transfer within the meaning of the Directive."

13. The present case does not turn on that point. The court stated (paragraph 14) that "an overall assessment must be made" and that is what the Employment Tribunal did.
14. In my judgment it is not arguable that the Employment Tribunal, as the tribunal of fact, were not entitled to reach the conclusion they did. The correct test was applied; the facts were sufficiently set out in the extended reasons; there was evidence to justify their conclusion and it was sufficiently reasoned.
15. The further point is taken that the 1989 arrangements did not comply with the provisions of the 1984 Act. That Act requires a specific procedure to be followed, it is submitted, and it was not followed until 1993. Reference has been made to sections 4, 5 and 27 of the Act and to schedule 4. The statutory scheme is set out in the extended reasons of the Tribunal.
16. The submission is that any arrangements outside the specific provisions of the 1984 Act were void. The Employment Tribunal did not accept that proposition, finding that it was within the powers of the two bodies to effect a transfer. The point was considered both by the Employment Tribunal and the Employment Appeal Tribunal. I agree with their conclusions and reasoning. TUPE regulations are intended to protect employees upon a transfer and the duty of an employment tribunal is to consider whether and when a transfer of undertaking in fact has occurred. I agree with the EAT that nothing in the 1994 Act prohibited or constrained the Employment Tribunal from reaching its conclusion.
17. I see no merit in the allegation of apparent bias. The Secretary of State is not party to the proceedings. It is submitted that he is involved as the party to whom schemes under the 1984 Act must be submitted. It is not in my judgment arguable that such role as he has in the procedure renders appointments made by him capable of creating an appearance of bias.
18. In my judgment there is no arguable ground of appeal and I would refuse the application for permission.
19. LORD JUSTICE LONGMORE: I agree.
20. SIR MARTIN NOURSE: I also agree.
ORDER: Appeal refused. The respondents to have their costs of the appeal in the sum of £6,550. Permission to appeal to the House of Lords refused. (Order not part of approved judgment)