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Industrial Tribunals Northern Ireland Decisions
You are here: BAILII >> Databases >> Industrial Tribunals Northern Ireland Decisions >> Winchester v Blue Van Co Ltd Department for Employment and ... Blue Van Co Ltd Department for Employment and ... [2013] NIIT 01437_12IT (01 March 2013)
URL: http://www.bailii.org/nie/cases/NIIT/2013/1437_12IT.html
Cite as: [2013] NIIT 01437_12IT, [2013] NIIT 1437_12IT
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THE INDUSTRIAL TRIBUNALS
CASE REF: 1437/12
1677/12
CLAIMANTS: 1. Wesley Winchester
2. Colin Forsythe
RESPONDENTS: 1. Blue Van Co Ltd
2. Department for Employment and Learning
DECISION
In the Winchester case (1437/12), the unanimous decisions of the tribunal are as follows:
(A) The claimant’s holiday pay claim against
Blue Van Co Ltd (“Blue Van”) is
well-founded.
(B) The notice pay claim against Blue Van is well-founded.
(C) It is declared that Blue Van is liable to the claimant in respect of a redundancy payment.
(D) The tribunal will not make any decision on
the question of whether or not the
Blue Van is liable for unfair dismissal prior to the next hearing in this case,
which is scheduled to take place on 19 March.
(E) The other purposes of the next hearing will be as follows: (1) To decide the amount of any compensation payable to the claimant by Blue Van in respect of holiday pay, notice pay and redundancy pay. (2) To decide on the amount of any unfair dismissal compensation due to the claimant, if the tribunal decides that the claimant was unfairly dismissed.
(F) The claimant’s appeals against the decisions of the Department for Employment and Learning (“the Department”) are dismissed.
In the Forsythe case (1677/12), the unanimous decisions of the tribunal are as follows:-
(A) None of the claimant’s claims against Blue Van is well-founded. Accordingly, all of those claims are dismissed. (However, see the important note at paragraph 21 below).
(B) The claimant’s appeals against the decisions of the Department are dismissed.
Constitution of Tribunal:
Chairman: Mr P Buggy
Members: Mr J Kinnear
Mr B Mackin
Appearances:
Each of the claimants was self-represented.
Blue Van was represented by one of its directors, Mr John Hennessy.
The Department was represented by Ms R Best, Barrister-at-Law, instructed by the Departmental Solicitor's Office.
REASONS
1. At the beginning of May 2012, Intercity Transport NI Ltd (“Intercity”) employed 19 people at its depot in Mallusk. Intercity purported to dismiss all of those staff, with effect from Monday 7 May 2012. By the first weekend of May 2012, Blue Van Co. Ltd (“Blue Van”) had “offered” jobs to eight of those staff, with effect from 8 May; those staff had accepted those “offers”; and Blue Van had set up a Northern Ireland depot (which is the work base of those eight staff).
2. Intercity had been in poor financial health for some years. Accordingly, Mr Alan Barton and Mr Eddie Maloney (the directors, and controlling shareholders, of Intercity) decided that, with effect from 7 May 2012, the company would cease operations. That is why the 19 staff were allegedly dismissed.
3. Subsequently, in November 2012, Intercity was the subject of a winding-up order.
4. Twelve of the 19 “dismissed” Intercity staff have presented claims against Intercity in the industrial tribunals.
5. A number of those claimants, including the claimants in these two cases, have made unsuccessful applications to the Department for Employment and Learning (in the Department’s role as the statutory guarantor in respect of certain debts).
6. Each of the nine claimants asserts that he is due payments in respect of holiday pay, notice pay and redundancy pay.
7. A Case Management Discussion (“CMD”) was held on 25 September 2012. During the course of that CMD, it was decided that these two cases (the Winchester and Forsythe cases) should be treated as “lead” cases. It was noted that all the parties would be likely to pay careful attention to the outcomes of the lead cases, as an indicator of the likely outcomes of the cases of the other seven claimants. During the course of the September CMD, it became clear that there were issues as to whether or not any “relevant entity” (any entity to which claimants were assigned at the relevant time) had been the subject of a service provision change (within the meaning of the Service Provision Change (Northern Ireland) Regulations 2006) to Blue Van, or had been the subject of a relevant transfer (within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations) 2006 to Blue Van.
8. Initially, these proceedings were brought only against Intercity. However, because of the service provision change and transfer of undertaking issues, Blue Van was added as a respondent to these proceedings. From then onwards, the claimants’ claims against employers were couched in the alternative. (In effect, the claimants were saying that Intercity was liable in respect of their claims against the employer; or, in the alternative, if Intercity was not liable, Blue Van was liable).
9. In the Winchester case, the claimant sought leave to add an unfair dismissal claim, to the list of claims against the employer which had already been set out in his claim form. It was directed that, if Intercity or Blue Van objected to the addition of such a claim, any such objection was to be made in writing by 15 October 2012 at the latest. No such objection was made. Accordingly, Mr Winchester was granted leave to amend his claim form by adding a claim of unfair dismissal, and his claim form was then deemed to have been altered accordingly.
10. At the beginning of the main hearing of these two cases, Mr Winchester and Mr Forsythe withdrew their claims against Intercity. The background and reasons for that withdrawal were as follows. Because Intercity has been the subject of a winding up order, proceedings against Intercity could not be continued without the leave of the High Court. There appears to be no optimism that Intercity would be able to pay the amount of any tribunal award, if any such award were to be made against it.
11. This was the main hearing in respect of the Forsythe and Winchester claims against the employer (against Intercity or, in the alternative, against Blue Van). This was also the main hearing of the appeals of those two claimants in respect of the refusal, by the Department, of their respective applications.
12. Accordingly, in relation to each claimant, this was a main hearing in respect of two separate sets of proceedings: the claims against the employer and the appeals against the Department’s adverse decisions.
13. It was agreed between the parties that evidence in the Winchester case should be regarded as evidence in the Forsythe case, and that evidence in the Forsythe case should be regarded as evidence in the Winchester case.
14. In each of these two cases, it was agreed by the claimant and the Department, and we were satisfied, that the appeals against the Department had to be dismissed, if the following conditions were both satisfied in respect of the relevant case:
(1) There had been a “relevant transfer”, within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPER”) in May 2012.
(2) The relevant claimant was employed by Intercity at the time of the relevant transfer and, at that time, was assigned to the organised grouping of resources or employees which was the subject of that transfer.
We are satisfied, in each of these two lead cases, that both of those conditions have been met. Accordingly, the appeals against the Department’s decisions must be dismissed in each of these two cases.
15. As already noted above, the liability issues in this case did not consist only of TUPER issues. There were also issues as to whether there had been a “service provision change”, within the meaning of the Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006 (“SPCR”), and whether the two lead claimants had been employed by Intercity and assigned to the transferred entity at the time of any such service provision change. Because of our conclusions in relation to the TUPER issues (see paragraph 14 above), we do not need to arrive at any definitive conclusions in relation to the SPCR issues, either in the context of the claims against the employer, or in the context of the appeals against the Department.
16.
Because of our conclusions in relation to the issues which were
specified at paragraph 14 above, any employment liabilities which Intercity
had had in respect of the claimants at the time of the relevant transfer were
liabilities which have become liabilities of Blue Van and which have ceased to
be liabilities of Intercity. That is the implication of paragraphs (1) and (2)
of Regulation 4 of TUPER.
17. Regulation 4(1) of TUPER (so far as material) provides as follows:
“…[A] relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer … but any such contract shall have effect after the transfer as if originally made between the persons so employed and the transferee.”
Paragraph (2) of regulation 4 provides as follows:
“Without prejudice to paragraph (1), but subject to paragraph (6), and regulations 8 and 15(9), on the completion of a relevant transfer -
(a) all the transferor’s rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this regulation to the transferee; and
(b) any act or omission before the transfer is completed, of or in relation to the transferor in respect of that contract or a person assigned to that organised grouping of resources or employees, shall be deemed to have been an act or omission of or in relation to the transferee.”
18. In the circumstances of these two cases, the implications of paragraphs (1) and (2) of Regulation 4, in the context of the claims against the employers, are as follows.
19. In these proceedings, Mr Forsythe makes claims in respect of holiday pay, notice pay and redundancy pay. Mr Forsythe was one of the people who was “offered” and “accepted” new employment by Blue Van, and he started to work for Blue Van from 8 May 2012 onwards. So his employment within the transferred entity, (to which he was assigned at the time of the relevant transfer) continued, and it is still continuing.
20. Accordingly, his purported dismissal by Intercity was not effective as a matter of law. The implications of that are as follows. Firstly, he is not entitled to succeed in his claim for holiday pay now. However, Blue Van must recognise and honour any holiday leave entitlements which he accrued, prior to 8 May 2012, while employed with Intercity. Secondly, he has no entitlement to notice pay now. However, if he is ever dismissed in the future by Blue Van, he would be entitled to a period of notice which would be calculated by adding his years of service with Intercity to his period of service with Blue Van. Thirdly, he is not entitled to a redundancy payment now. However, if he is ever made redundant in the future by Blue Van, he will be entitled to redundancy pay which would be calculated on the basis of the aggregate of his period of service with Intercity and his period of service since May 2012 with Blue Van.
21. We note that when Blue Van “offered” Mr Forsythe employment with Blue Van, the offer was made and “accepted” on the basis of terms and conditions of employment which were much inferior to the terms and conditions of employment which he had enjoyed while employed by Intercity. However, as a general rule, TUPER often protects staff against adverse changes to their terms and conditions of employment, in the context of relevant transfers. Paragraphs (4) and (5) of Regulation 4 of TUPER are relevant in this context. (See paragraph 17 above.) Mr Forsythe should be aware that the Labour Relations Agency can provide him with useful information regarding any rights which he may have pursuant to paragraphs (4) and (5) of Regulation 4 of TUPER.
22. As already noted above, Mr Winchester’s claims against the employer, in the present proceedings, now consist of claims in respect of holiday pay, notice pay, redundancy pay and unfair dismissal.
23. During the hearing on 19 March, we will consider the question of whether or not Mr Winchester was unfairly dismissed. During that hearing, we will decide the remedies issues in respect of holiday pay, notice pay, redundancy pay and (if, and only if, we decide that the claimant’s unfair dismissal claim is well-founded) also in respect of unfair dismissal.
24. We are satisfied that Mr Winchester was dismissed with effect from 7 May 2012.
25. We are satisfied that, at the time of his dismissal, he had accrued holiday leave entitlements; that, accordingly, at that time, he was entitled to be paid in respect of those holiday pay entitlements; and that nobody paid him in respect of those entitlements.
26. The claimant had long service with Intercity. We are satisfied that he did not get due notice in respect of his dismissal, and that he did not get adequate pay in lieu of notice either.
27.
The claimant’s redundancy pay
claim is, in effect, a claim brought under Article 198 of the Employment
Rights (Northern Ireland) Order 1996. Paragraph (2) of
Article 198 provides that, for the purposes of any claim brought under that
Article:
“… an employee who has been dismissed by his employer shall, unless the contrary is proved, be presumed to have been so dismissed by reason of redundancy”.
28. The Article 198(2) presumption comes into play, in the circumstances of this case, because it has not been proven that Mr Winchester was not dismissed by reason of redundancy.
29. Accordingly, the claimant’s holiday pay claim, his notice pay claim and his redundancy pay claim are all well-founded.
30. But against whom are those claims well-founded? In our judgment, the liable party is Blue Van. We have arrived at that conclusion because:
(1)
We are satisfied that there was a
relevant transfer, within the meaning of TUPER, in May 2012, from Intercity to
Blue Van.
(2) We are satisfied that the relevant transfer occurred before the claimant’s dismissal (by Intercity) had taken effect.
31. Accordingly, the effects of Regulation 4 of TUPER (as described at paragraphs 16 and 17 above) are as follows:
(1)
Blue Van has become responsible
for any holiday pay entitlements of
Mr Winchester which were in existence when his employment terminated on 7 May
2012.
(2) The legal consequences of the dismissal of Mr Winchester by Intercity have become the liabilities of Blue Van.
The remaining issues
32. We need to deal with two remaining issues:
(1) Why have we concluded that there was a relevant transfer of the Intercity business?
(2) Why do we consider that that relevant transfer had occurred by 7 May 2012?
The relevant transfer issue
33. The attention of the parties had been drawn to two industrial tribunal decisions, of tribunals which had been chaired by the Chairman of this tribunal. Those two decisions were the Morgan/Martin decision (case reference 2769/10) and the Armstrong decision (case reference 170/10).
34. In Armstrong, it was decided that there had not been a relevant transfer for the purposes of TUPER. Mr Hennessy, on behalf of Blue Van, was keen that we should apply the Armstrong principles (the principles which had been stated in Armstrong) in the present case. We have done so.
35. Those principles were set out in detail at sub-paragraphs (1) to (13) and at sub-paragraph (17) of paragraph 41 of the Decision in Armstrong.
36. Sub-paragraph (9) of paragraph 41 of Armstrong refers to the decision of the European Court of Justice in Spijkers v Gebroeders Benedick Abbatoir CV [1986] ECR 1119. In that case, the Dutch Government submitted that, in the context of acquired rights law, the term ‘transfer’ implies “… that the transferee actually carries on the activities of the transferor as part of the same business”. At paragraph 11 of its judgment in that case, the Court endorsed that view, adding the following comment:
“It follows that the decisive criterion for establishing whether there is a transfer for the purposes of the Directive is whether the business in question retains its identity.”
37. At paragraph 12 of the Spijkers judgment, the Court declared that the implication of that decisive criterion (the question of whether or not the business retained its identity) was that a transfer, within the meaning of the legislation, would not occur merely because the assets of a particular business are disposed of: instead, according to the Court, what really matters is whether or not the business was disposed of “as a going concern”.
38. That reference to a business being disposed of as “a going concern”, is merely a reference to the business continuing. That reference does not indicate (as was incorrectly argued, in this case, on behalf of Blue Van) an implication that a business which is financially unsound cannot be, or is unlikely to be, the subject of a relevant transfer for the purposes of TUPER.
39. At paragraph 12 of the Spijkers judgment, the Court also pointed out that one relevant indicator (one indicator that the business was disposed of as a going concern and had retained its identity) will be provided by the fact, if indeed it be the fact, that:
(1)
the business’s was actually
continued or resumed by the new employer, and
(2) it was continued or resumed with the same or similar activities.
40. At paragraph 13 of Spijkers, the European Court made the point that there has to be an overall assessment (on the question of whether or not the business had been disposed of, to the putative transferee, as a going concern). In that paragraph, the Court drew attention to certain factors which could properly be taken into account in arriving at that overall assessment, while stressing that those factors are only appropriate for consideration as part of an overall assessment, and that “ … they cannot therefore be considered in isolation”. Seven factors were listed at paragraph 13 of Spijkers. It will be helpful if we now list those factors, and consider each of them in the context of this case.
41. According to Factor 1, the court or tribunal was to pay regard to the type of undertaking of business, which was involved. We have done so in this case. We note that, in effect, the core business, both of the putative transferor and of the new Northern Ireland depot of the putative transferee, was road freight and courier services.
42. Factor 2 was whether the business’s tangible assets, such as buildings and moveable property, were transferred to the putative transferee.
43. The Northern Ireland depot of Blue Van is not located in the building which has been the headquarters of Intercity. However, precisely the same vans as the vans which were used by Intercity were used by the putative transferee. We are satisfied that Blue Van did not acquire those vans from Intercity, and instead got them from the business which had been supplying them to Intercity. However, in our judgment, that circumstance is of limited significance in the present case. The reality is that the same vans were being used both before and after the alleged relevant transfer. Indeed, to this very day, the vans which are used by Blue Van continue to have the Intercity logo on them.
44. Factor 3 is concerned with the value of the intangible assets (such as goodwill) of the business at the time of the transfer. See our discussion of Factor 5 below.
45. Factor 4 asks whether “the majority” of the employees of the business were taken over by the new employer. However, some of the post-Spijkers European Court of Justice case law has focussed, not on whether a “majority” of the putative transferor’s workforce were taken on by the putative transferee, but on the question of whether a significant proportion of the employees of the business were taken over by the “new” employer.
46. In this case, the situations before and after the putative transfer were as follows:
(1) Prior to the putative transfer, Intercity employed 19 staff, who can be categorised as follows:
Two managers (Mr Alan Barton and the claimant Mr Forsythe);
seven van drivers;
six truck drivers;
three warehouse staff; and
one administrator.
(2) Immediately after the putative transfer, eight of those staff were “offered” and had accepted “jobs” in the Northern Ireland Depot of Blue Van, and those staff can be categorised as follows:
One manager (Mr Alan Barton);
four van drivers;
one administrator; and
two truck drivers.
47. Factor 5 asks whether the customers of the “old” employer transferred to the “new” employer. In this case, the situation was as follows. Prior to the putative transfer, approximately two-thirds, in value, of the work carried out by Intercity was work which was done for a firm called Vow Ltd (“Vow”). That work was done by Intercity as a sub-contractor for Blue Van.
48. Vow is a major customer of Blue Van’s. When it became clear that Intercity would not survive, Mr John Hennessy (Blue Van’s representative in the present proceedings) made efforts to find an alternative sub-contractor. Those efforts were unsuccessful. As a result, Blue Van established a depot in Northern Ireland for the first time. The function of that depot was, and is, to provide the transport and courier services in respect of Vow’s goods which had formerly (until the beginning of May 2012) been provided by Intercity.
49. Factor 6 asks how similar the activities are. (How similar were the activities carried on before and after the putative transfer?).
50. We note that some changes in the organisation of the workload have been made. We note, in particular, that Northern Ireland depot of Blue Van, unlike Intercity has no separate warehousing department, and that Blue Van’s arrangements in relation to provision of relevant warehousing services are different from the arrangements which had formerly been made by Intercity. However, in our view, the services which were carried out for the ultimate customer, both before and after the transfer, are practically identical.
51. Factor 7 asks whether the activities of the putative transferor were suspended for any period. Indeed they were not. According to Blue Van, Intercity ceased operations during the first weekend of May 2012, and Blue Van started operations in Northern Ireland on Tuesday 8 May. (Monday 7 May was a bank holiday).
52. We have no hesitation in concluding that there was a relevant transfer, in this instance, of the Intercity business, to Blue Van, and that that business was thereafter carried out by the Northern Ireland depot of Blue Van.
53. It is true that not all of the customers transferred to Blue Van. But two-thirds, in terms of value, did transfer. The activities carried out both before and after the putative transfer, in terms of the services provided to the customer, were practically identical. A very substantial proportion of the staff of Intercity became the staff of Blue Van. (In particular, the Managing Director of Intercity became the Manager of the Northern Ireland depot). The vans which had formerly been used for Intercity were now being used for the activities of the Northern Ireland depot of Blue Van.
54. In arriving at our overall conclusion (that there was a relevant transfer of the Intercity business, to Blue Van, in May 2012), we have taken particular account of the factors mentioned in the last preceding paragraph above, in arriving at an overall assessment on the question of whether or not this was a situation in which Intercity business has been disposed of to Blue Van as a going concern.
When did the transfer occur?
55. We have no doubt that the relevant transfer had occurred by the first weekend of May 2012. By that stage, the Northern Ireland depot of Blue Van (whereby Blue Van would now directly provide Vow with services which had previously been provided, on Blue Van’s behalf, by Intercity) had been set up. By that stage, Blue Van had acquired the services of eight of the staff who had, up to then, been employed by Intercity. By that stage, arrangements had been made whereby some of the vans used by Intercity would henceforth be available for use by the Northern Ireland depot of Blue Van.
Other comments
56. We note that Blue Van is 50% owned by the wife of Mr Eddie Maloney (who owned 50% of the shares in Intercity). We also note that, until a short number of months prior to the Spring and Summer of 2012, Mr Maloney had a substantial shareholding in Blue Van itself. Mr Hennessy assured us, on oath, that those connections had no effect on the reasons for establishing the Northern Ireland depot and that they had no effect upon the mechanisms by which that depot was established. For the purposes of deciding the liability issues in this case, at least in relation to all claims and appeals other than the unfair dismissal claim, we do not need to arrive at definitive conclusions on that aspect of the matter.
57. After the hearing had been completed, Mr Hennessy wrote to us in relation to the issues in the case. We could not properly take account of the arguments made in that letter without having first given the opportunity to the claimants and to the Department to comment. However, the main thrust of the points made in the letter relate to SPCR issues. Because we have not had to arrive at conclusions in relation to the SPCR issues, the points made in the letter are largely irrelevant.
Next steps
58. The next hearing in this case will take place on 19 March. That hearing will address two sets of issues:
(1) Whether Mr Winchester’s claim in respect of unfair dismissal is well-founded.
(2) What compensation, if any, should be awarded to Mr Winchester in respect of all of the claims which have been found to be well-founded?
59. Since we have decided that none of My Forsythe’s claims is well-founded, he does not need to attend the remedies hearing. However, we again draw attention to the important note at paragraph 21 of this Decision.
60. In each of these two cases, the appeals against the Department’s decisions have been unsuccessful. Accordingly, there is no need for the Department to participate in the hearing on 19 March, although if is of course welcome to participate if it wishes to do so.
Chairman:
Date and place of hearing: 4 and 5 February 2013, Belfast.
Date decision recorded in register and issued to parties: