United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 739_93_3101

Appeal No. EAT/739/93

I N T E R N A L

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 31st January 1994

Before

THE HONOURABLE MR JUSTICE MUMMERY (P)

MR A FERRY MBE

MISS J W COLLERSON

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LAKESIDE INNS LTD          APPELLANTS

1) MRS E A LANE

2) MR A HUNT

3) SECRETARY OF STATE FOR EMPLOYMENT          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

PRELIMINARY HEARING

Revised


 


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APPEARANCES

For the Appellants MR M PARKER

(Of Counsel)

Messrs Clarkson Penhale

Solicitors

45 Victoria Street

Morecambe

Lancashire

LA4 4AF


 


MR JUSTICE MUMMERY (PRESIDENT): This is an appeal by Lakeside Inns Limited against the unanimous decision of the Industrial Tribunal held at Carlisle on the 30th April 1993. The Tribunal decided that Mrs Elizabeth Ann Lane had been unfairly dismissed by Lakeside Inns and ordered payment to her of the sum of £5,307.50. They also ordered payment of a further sum of £277 in respect of a claim for holiday pay under Section 5 of the Wages Act 1986.

Lakeside Inns, of which Mr Denby is a Director, were dissatisfied with the decision, appealed. The Notice of Appeal is dated 6th July 1993. The grounds of appeal originally contained a complaint that the Tribunal had misdirected itself in law or had misunderstood or misapplied the law as to Regulation 8 of the Transfer of Undertakings Regulations 1981. (Ground (a)).

Mr Denby conducted the case himself before the Tribunal.

Mr Parker has appeared for Lakeside Inns on this preliminary hearing and he informed us that ground (a) on the misapplication of law is no longer pursued.

The substance of the complaint in grounds (b) and (c) is that the decision of the Tribunal was perverse in that it misunderstood the facts and the evidence given and that there was no evidence to justify the conclusion of the Tribunal that the dismissal was unfair.

We are unable to accept that there was any perversity in the decision reached by the Tribunal. The background to the dispute was that Mrs Lane worked at the Newby Bridge Hotel, which is now run by Lakeside Inns, from 26th May 1990 until the 24th August 1992. She was a Manageress for the proprietors, a Mr and Mrs Hunt. She carried out duties as a Receptionist and Book-keeper and Secretary. The hotel was not a success. Receivers were appointed on the 19th February 1992 and on the 24th August 1992, that is the same day as the dismissal of Mrs Lane, the Receivers transferred the hotel, its business and goodwill, to Lakeside Inns. Mrs Lane was dismissed. She brought a claim for unfair dismissal by an application presented to the Industrial Tribunal on the 26th September 1992. She originally made the complaint against Mr Denby personally. She claimed:

"Mr Denby upon purchasing the hotel refused to honour my contract of employment, stating that there was no job for me, although my job, as I see it, was advertised in a local newspaper. Mr Denby also refused to pay me my holiday pay owed and any pay or redundancy money."

The proceedings were later amended to substitute "Lakeside Inns Limited" as Respondents, since they were the transferees, not Mr Denby personally.

Mr Denby put in a Notice of Appearance to the claim stating:

"On 24th August 1992 the Newby Bridge Hotel was purchased by Lakeside Inns Ltd of which he is a Director.

The Applicant [Mrs Lane] was employed as Manageress by the previous owners. She was informed on 17th August [about a week before the transfer] that the new owners would not grant her a contract of employment. Consequently, the applicant was at no stage been employed by the new owners [Lakeside Inns as transferee].

Alternatively,

a) if a contract of employment did exist the new owners [Lakeside] were entitled to terminate it on the grounds of the Appellant's [Mrs Lane's] misconduct."

The matter was decided by the Tribunal for full reasons, notified to the parties on the 23rd July 1993. The findings of fact and the conclusions in the Full Reasons could not be clearer.

The Tribunal held, contrary to Mr Denby's submission, that there was a "relevant transfer", on the 24th August 1992. They stated in paragraph 8:

"We next have to find the reason for the applicant's dismissal. We find that the reason or the principal reason was connected with the relevant transfer. The respondent decided to dismiss all the employees and then to re-engage, possibly on different terms, those which it wished to employ. The applicant was not specifically dismissed because she was a Manager. She was told of her dismissal over the telephone when she applied for the position of a receptionist. The reason she was not engaged was mainly in our opinion because of her connection with Mr Hunt and partly because it would have been expensive to keep her on. This was not the reason for her dismissal. It was the reason why having dismissed her along with all the other staff the respondent did not wish to re-engage her."

To make complete sense of that statement it is necessary to refer to earlier passages in the decision in which the facts are set out. In paragraph 5 it is stated that the Respondent believed that it was not obliged to take on the employees at the Hotel. Mr Denby wished to start with a "clean slate". That is elaborated at the end of paragraph 6 where it is found that Mrs Lane was Manageress. It did not require a Manageress. It is stated:

"It did not require a Manageress as Mr Denby and his brother intended to run the hotel themselves. It would be too expensive to pay her £180 a week, which was the gross wage she had been receiving. It was not prepared to employ her because of her close association with Mr and Mrs Hunt. The hotel had been badly managed and while she may not have been responsible for this, nevertheless her presence might have an undesirable effect upon customers."

There is, therefore, a clear finding by the Tribunal, which is not challenged, that is that there was a "relevant transfer". The effect of the transfer was that, by virtue of Regulation 5 of the 1985 Regulations, Mrs Lane's contract of employment was to continue as if originally made between her and Lakeside Inns, as transferee. Lakeside Inns dismissed her. The Tribunal found that it was unfair dismissal because the transfer, or a reason, connected with the transfer, was the reason or principal reason, for her dismissal. That must be so on those facts. The reason she was dismissed was that there was a transfer. Mr Denby did not wish the Hotel, under its new proprietorship, to have still employed there, someone associated with the previously unsuccessful business carried on at the Hotel.

Mr Denby, on behalf of the Company, then attempted before the Industrial Tribunal to argue that Regulation 8(2) applied. Regulation 8(2) provides:

"Where an economic, technical or organisational reason entailing changes in the workforce of either the transferor or the transferee before or after a relevant transfer is the reason or principal reason for dismissing an employee -

(a) paragraph (1) above shall not apply to his dismissal"

The Tribunal dealt with that argument in paragraph 9. They repeated the finding that the transfer was the reason for dismissal. The Tribunal said this, in relation to paragraph 8(2):

"Paragraph 8(2) of the Regulations does not apply as an economic, technical or organisational reason entailing changes in the workforce of either the transferor or the transferee before or after the relevant transfer was not the reason or principal reason for dismissing the applicant."

The reason for that conclusion is clear. Mr Denby's intention was to start with a "clean slate". That meant not continuing to employ Mrs Lane as Manageress or Receptionist or Book-keeper. Mr Denby decided to dismiss all staff and re-engage those he wished to employ, possibly on different terms.

Our conclusion is that there is no point of law. Mr Parker on behalf of the Appellants tried to make out a case of perversity by referring to certain passages in the decision which he said were erroneous in fact, and displayed a lack of understanding by the Industrial Tribunal of the true factual position.

We are not in a position to say in this Tribunal whether there were mistakes of fact in the decision. What matters is that on the crucial facts, that is the transfer and the reason for dismissal, the Tribunal came to clear findings, after hearing evidence from Mr Denby and Mrs Lane. It is for the Tribunal to find the facts. There is no appeal against the finding of fact, unless it can be shown that there is no evidence to support the finding or that the finding is clearly inconsistent with uncontradicted relevant evidence. That has not been shown in this appeal. It this preliminary stage we shall dismiss the appeal as disclosing no error of law on the part of the Industrial Tribunal.