United Kingdom Employment Appeal Tribunal

BAILII case number: [1993] UKEAT 636_93_2911

Appeal No. EAT/636/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 29th November 1993

Judgment delivered on 20th December 1993

Before

HIS HONOUR JUDGE B HARGROVE OBE QC

MISS A MADDOCKS OBE

MR A D SCOTT

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A & G TUCK LTD          APPELLANTS

(1) MR A A BARTLETT

(2) A & G TUCK (SLOUGH) LTD          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants Miss L Chudleigh

(of Counsel)

Messrs Balderston Warren

Solicitors

Station Place

Letchworth

Herts SG6 3AG

For the Respondents Mr D Hartley

Free Representation Unit

Department of Law

University of Central England in Birmingham

Perry Barr

BIRMINGHAM B42 2SU


 


HIS HONOUR JUDGE HARGROVE QC By a reserved judgment of 30th June 1993 the Industrial Tribunal held that it had jurisdiction to hear the application alleging unfair dismissal by the first Respondent. The contention of the Appellants before us, and before the Industrial Tribunal, is and was that Mr Bartlett did not have the qualifying period of two years' service and that the Transfer Regulations did not remedy an apparent defect.

Mr Bartlett entered the employ of A & G Tuck (Slough) Ltd (hereinafter called "Slough") in 1966. In 1983 Slough purchased A D Hayes Fasteners and Turned Parts Ltd (hereinafter referred to as "Hayes"). Mr Bartlett worked for both companies and moved to Stourbridge, the premises of Hayes in 1987. He was at that stage the production manager of Slough. By 1989 he had also become the production manager of Hayes while remaining an employee of Slough.

On 10th August 1992 on his return from holiday Mr Bartlett discovered that Slough had been sold to the Appellant company. This company had been formed by Mr John Cooke as a vehicle for the take-over.

The proprietor of Slough asked Mr Bartlett to give Mr Cooke every assistance in the running of his new business for the next two weeks and this he did devoting his time to the business of the Appellant company.

Mr Bartlett's name did not appear on the schedule of transferred employees.

There is no dispute that there was a transfer of the undertaking of Slough. On 12th August Mr Cooke invited Mr Bartlett to become production manager of the Appellant. On 17th August Mr Plant, the former proprietor of Slough, indicated to Mr Bartlett that it would be in the interest of all if he joined the Appellant and this Mr Bartlett did on 24th August. Everyone believed that Mr Bartlett was simply transferring employment to the Appellants. Unfortunately the matter was not made clear because Mr Cooke evaded requests to produce a contract of employment.

The question is whether the period between 10th August and 24th August broke the continuity of employment.

The facts in this case produce a situation which has not, previously, come before the courts. There are two relevant ways in which employees in similar circumstances have a possible qualifying period of employment preserved. The first occurs in the Transfer of Undertakings Regulations 1981, Regulation 5 which reads:

"(1) Except where objection is made under paragraph 4(a) below a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor in the undertaking or part transferred but any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee."

Mr Bartlett was not in a position where his contract of employment "would otherwise have been terminated by the transfer" and he does not therefore gain the benefit of a novation under that Regulation.

The second is under Schedule 13 of the Employment Protection (Consolidation) Act 1978 where the relevant Regulations are:

"1(1) Except so far as otherwise provided by the following provisions of this Schedule a week which does not count under paragraphs 3 - 12 breaks the continuity of the period of employment."

By paragraph 17(2) under the heading "Change of Employer" it is provided:

"(2) If a trade or business or an undertaking (whether or not it be an undertaking established by or under an Act of Parliament) is transferred from one person to another, the period of employment of an employee in the trade or business or undertaking at the time of the transfer shall count as a period of employment with the transferee and the transfer shall not break the continuity of the period of employment".

Whether that preserves the continuity of employment in the instant case is central to the decision of the Industrial Tribunal.

The Appellant maintains that the Industrial Tribunal misdirected itself in law in holding that it should follow Macer v. Abafast [1990] ICR 234 where at p243 Wood J after setting out the relevant paragraph held:

"The first essential is the transfer and therefore the continuation of the business or undertaking. The second is employment by the owner before the transfer or change of ownership and by the owner after. The third essential is that the period of service with the former must be continuous within paragraphs 1 to 16 of Schedule 13, and likewise the period of service with the latter. Fourthly, that the combined periods of service must satisfy the qualification period. This seems to us to be the achievement sought by the legislation. Why should not paragraph 17(2) be so understood?"

The Appellant points out that the gap being considered in Macer was a gap before transfer. Here it is claimed that there was a gap after transfer and while the employee was still in the apparent employment of the transferor. It is also claimed that even on the basis of Macer the Respondent's claim fails because of the way in which Wood J. considers the matter at p.247:

"As said by Eveleigh L.J. in his judgment, it has been suggested that if the gap between the period of employment by the transferor and the period of employment by the transferee is allowed to exceed the statutory week referred to in the earlier paragraphs of Schedule 13 then at any time in the future the employee will be able to add together two periods of continuous employment. We do not feel that this criticism is well founded for three reasons. The first is that the gap must be a gap which is related to the machinery of transfer and if the gap was too long it might not be viewed in that way. Secondly, it seems to us unlikely that the transfer period would be very long in the normal event as the transferee will be losing money if the business is not operating. Thirdly, however, it is said that the wording of paragraph 17(1) applies the provisions of the earlier paragraphs to that gap during the transfer process. With respect to that view we do not share it. It seems to us that the earlier provisions of the Schedule relate "only to employment by the one employer." They thus apply to the period of employment with the transferor and to the period of employment with the transferee. It is to provide for the period between those two employments and to provide continuity of employment despite that gap that paragraph 17(2) is drafted. Once again it seems to us that to make an arbitrary rule that a gap of more than one week, eg, that of 10 days, breaks the continuity of employment, but that a gap of less than one week does not, allows manipulation of the situation and is contrary to the intention of the legislation and the guidance in Litster's case."

In any event the Appellant says that Macer was wrongly decided since it is contrary to the decision in The Secretary of State for Employment v. Spence [1986] ICR 651. That case dealt with Regulation 5(1) of the Transfer of Undertakings Regulations 1981 where the term used is "immediately before the transfer" and it is therefore not the same wording as that set forth in paragraph 17(2) of Schedule 13. The EAT in Macer considered Spence's case and in our view Macer was correctly decided and the Industrial Tribunal was correct in following that case.

But, it is said, that even if the case had been followed it still did not lead to the result reached by the Tribunal since, as has been indicated previously, the gap here is said to be after the transfer. There is some apparent ambiguity if a comparison is made between paragraph 8(e) of the Reasons and paragraph 11. Paragraph 8(e) reads:

"Macer and Drury were both cases where the employee had been dismissed before and because of the transfer and there was a gap, albeit a brief gap, during which the employee was unemployed. But that is not the case here in either particular. Mr Bartlett was not dismissed, it would appear, by Slough. In any event he remained in the employment of Slough until after the relevant transfer and did not enter the employment of Tuck until 2 weeks later. Does that make any difference? In our judgment it does not."

The approach of paragraph 11 is:

"We remind our selves that here, the gap followed rather than preceded the transfer and Mr Bartlett remained in the transferor's employment throughout that period. But in our judgment that does not matter. Here was the transfer of an undertaking from one person to another. Mr Bartlett was an employee in that undertaking at the time of the transfer. He had a period of continuous employment with the transferor which considerably exceeded the two year qualifying period for bringing a complaint of unfair dismissal. He entered into the employment of the transferee, not at the moment of transfer but undoubtedly in connection with the transfer and after a gap which was related to the machinery of the transfer, in the sense that Mr Cooke was discovering that he could not run the business without Mr Bartlett. ..."

In our view, the Tribunal was correct in not limiting its view to the moment of transfer on 10th August. While legal documentation may be complete, the machinery of transfer of the business undertaking may take a more extended period. The approach in paragraph 11 therefore recognises a position which is well-known to those experienced in industrial life and acquainted with the normal problems of transfer of undertakings. Moreover, it appears to us that the Tribunal has interpreted the legislation in a manner which is both consistent with the intention of Parliament and with the requirements of justice.

We recognise that the interpretation adopted by the Industrial Tribunal may not provide an unalloyed advantage to an employee of a transferor company who, at some later date, applies to be engaged by a transferee company. In such circumstances the fact that the employee brings with him a period of qualification employment may make him less attractive to the transferee company.

Mr Plant, on behalf of the second Respondent also made submissions to us and the Appellants objected that he had no locus standi. While Mr Plant's view were of general interest and we were grateful to him for appearing before us we hope that we shall not be considered discourteous if we say that he was unable to assist us on the point of law involved.

We therefore find that the Industrial Tribunal was correct in holding that it had jurisdiction.

This appeal is dismissed.