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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Birch & Ors v Nuneaton And Bedworth Borough Council & Anor [1995] UKEAT 1083_93_2106 (21 June 1995)
URL: http://www.bailii.org/uk/cases/UKEAT/1995/1083_93_2106.html
Cite as: [1995] UKEAT 1083_93_2106
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At the Tribunal
On 24 & 25 October 1994
Before
THE HONOURABLE MR JUSTICE MUMMERY
LORD GLADWIN OF CLEE CBE JP
MISS C HOLROYD
(2) SPORTS AND LEISURE MANAGEMENT LTD
Transcript of Proceedings
JUDGMENT
Revised
APPEARANCES
For the Appellants MR T LINDEN
(OF COUNSEL)
Pattinson & Brewer
30 Great James Street
London WC1N 3HA
For the lst Respondent MR C JEANS
(OF COUNSEL)
The Solicitor
Nuneaton and Bedworth
Borough Council
Town Hall
Nuneaton
CV11 5AA
For the 2nd Respondent MR A WILKIE QC
(OF COUNSEL)
Edge and Elkins
Rutland House
148 Edmund Street
Birmingham B3 2JR
MR JUSTICE MUMMERY (PRESIDENT) This is one of an increasing number of difficult cases concerning the interpretation and application of the law relating to the Transfer of Undertakings in the context of the contracting out of services pursuant to competitive tendering procedures under the Local Government Act 1988. Two recent decisions, one of the European Court of Justice, and the other of the Court of Appeal on the Acquired Rights Directive (EC77/182) (The Directive) and on the Transfer of Undertakings (Protection of Employment) Regulations 1981 (The Regulations) indicate the approach to the resolution of the question whether there has been a relevant transfer of undertaking in any particular case: Spar v. Schmidt [1994] IRLR 302; Dines v. Initial Health Care Services Ltd [1994] IRLR 336. Both cases were decided and reported after the decision under appeal in this case (as well as in a number of other cases) was given in the Industrial Tribunal. Changes in the legal landscape between the hearing of an application at first instance and the disposal of an appeal create special problems, particularly as to the extent to which it may be necessary for the case to be reheard on the basis of the intervening rulings. Parties to proceedings may find themselves unfortunate, blameless victims of the shifts and uncertainties in the law which carry with them the risk of additional costs and further frustrating delays in the final resolution of the proceedings.
Discontent may be increased by the fact that the decision under appeal may only be on a preliminary issue. The parties may still be awaiting a full investigation on the merits of the matter long after the events have occurred. In the present case, for example, the Applicants complain of unfair dismissal on 31 December 1992; the Industrial Tribunal heard evidence and argument over a period of 7 days in July and October 1993, on the limited preliminary question whether there had been a relevant transfer of an undertaking within the meaning of the Regulations. For reasons (running to 27 pages) notified to the parties on 8 November 1993, the Tribunal decided that there was no relevant transfer and that the case of unfair dismissal should therefore be dismissed as against the alleged transferee Sports and Leisure Management Ltd (SLM).
At the hearing of the appeal the applicants argued that the decision of the Tribunal was flawed by error of law. The arguments are partly based on the two authorities decided in the Spring of 1994. Further decisions have been reported since the hearing and this judgment has been deferred to take account of these and other cases not yet reported. The contention is that the appeal should be allowed and the cases remitted to the Industrial Tribunal for rehearing. If that course is taken by the Tribunal the consequence is that, over 3 years after the allegedly unfair dismissal took place, the Industrial Tribunal will still be grappling with the initial stages of the dispute as to whether there is a relevant transfer and as to whether SLM is potentially liable to the Applicants for unfair dismissal.
THE REGULATIONS
The purpose of the Regulations was to implement the Directive. The purpose of the Directive was to promote the approximation of laws of Member States relating to the safeguarding of employees' rights in the event of transfer of undertakings, business or parts of business.
The preamble to the Directive recites:
"Whereas economic trends are bringing in their wake at both national and Community level, changes in the structure of undertakings, through transfers of undertakings, businesses or parts of businesses to other employers as a result of legal transfers or mergers;
Whereas it is necessary to provide for the protection of employees in the event of a change of employer, in particular, to ensure that their rights are safeguarded."
Article 1 of the Directive contains a significant provision on the scope of the Directive.
"This Directive shall apply to the transfer of an undertaking, business or part of a business to another employer as a result of a legal transfer or merger."
The definitions in Article 2 do not include either "undertaking" or "transfer".
In the English legislative fashion the Regulations were more specific. Therein lies part the problem in this and other cases.
The Regulations apply:
" 3(1) to a transfer from one person to another of an undertaking situated immediately before the transfer in the United Kingdom or a part of one which is so situated ... ."
The interpretation provisions in Regulation 2(1) provide that:
""undertaking" includes any trade or business, but does not include any undertaking or part of an undertaking which is not in the nature of a commercial venture."
The underlined words have since 30 August 1993 been omitted from the definition. This amendment was made by virtue of provisions in the Trade Union Reform and Employment Rights Act 1993 (Section 33(1), (2) and (5) and Schedule 10; Schedule 9, paragraph 4).
The relevant events in this case occurred before 30 August 1993, so that the unamended provisions continue to govern the rights of the parties.
To complete the picture on the Regulations it is necessary to refer to Regulation 3(2) which provides that:
"... these Regulations so apply whether the transfer is effected by sale or by some other disposition or by operation of law."
On those provisions 3 questions arise.
(1) Did Nuneaton and Bedworth Borough Council ("the Council"), carry on an undertaking? It is common ground on this appeal that they did.
(2) Was that undertaking "in the nature of a commercial venture?" If it was, as the Applicants contend, the Regulations may apply. If it was not, as the Council and SLM contend, the Regulations do not apply.
(3) Has there been a relevant transfer of the undertaking to the alleged transferee SLM? If there has been, as the Applicants contend, the Regulations apply. If there has not been, as the Council and SLM contend, the Regulations do not apply.
In answering these questions certain matters on this appeal are common ground:-
(1) The Regulations must be construed, if it is possible to do so without distorting their meaning, to accord with the wording and purpose of the Directive, as interpreted by the European Court of Justice. See Webb v EMO Air Cargo (UK) Ltd [1993] ICR 175 at 186D - E; Litster v. Forth Dry Dock [1980] ICR 344 at 354, 357 - 358.
(2) Regulation 2(1) of the Regulations introduces a qualification into the interpretation of an "undertaking" which is not expressly contained in the Directive.
(3) The crucial question is what is the scope of that exclusion couched in words which are not defined in the Regulations? The meaning of the words "in the nature of a commercial venture" must, therefore, be determined by ordinary English usage in the context of the Regulations, construed as a whole, and in accordance with the principle that the provisions should be construed, if possible, to accord with Community Law.
THE BACKGROUND FACTS
Although the Tribunal set out the facts at length, it is possible to summarise the essential facts relatively briefly.
(1) The Council, which is Labour controlled, has a "long standing and well defined policy" for the provision of leisure and recreational facilities to the residents of Nuneaton and Bedworth. There are 3 distinctive features of the policy:
(a) Positive targeting of disadvantaged and minority groups, such as the handicapped, reserving facilities for their exclusive use at certain times;
(b) Development of "Passport to Leisure", a scheme which entitles those, to whom a passport document is issued for a fee, to concessions and, in the case of certain categories of resident (children, senior citizens, the disabled), to free use at all times;
(c) Subsidised leisure and recreational facilities (£11/2M per year in the years prior to the contract) as permitted by section 19(2) of the Local Government (Miscellaneous Provisions) Act 1976.
(2) By virtue of the Local Government Act 1988 and the Local Government Act 1988 (Competition in Sports and Leisure Facilities) Order 1989 the function of "Managing sports and leisure facilities" was required to be submitted to a process of compulsory competitive tendering to the minimum extent of managing (as defined) swimming pools and gymnasia.
(3) The Council's facilities which potentially fell within the ambit of the compulsory competitive tendering were six Sports and Leisure centres. Three were omitted, leaving the Jubilee Sports Centre, the Bedworth Leisure Complex and the Pingles Leisure Complex.
(4) The Council made a positive decision to ensure the perpetuation of its philosophy, policy and management style in the provision of leisure services by inserting very detailed provisions in the tender and contract documents and by making it clear to contractors "what they would be letting themselves in for" eg restricted scope of possible initiatives.
(5) SLM were the successful tenderers. The Contract dated 11th March 1992, but effective from 2nd January 1992, ran to 80 pages, with 127 pages of specifications and a further 159 pages of the appendices impinging on "every conceivable aspect of the running of the leisure facilities." The provisions for payment of an annual sum by the Council to SLM to run the facilities specified that it should be calculated on the basis of the difference between the forecast annual expenditure over 4 years and the forecast income of the same period. The tenderers were given an opportunity to make a profit if the actual net cost of running the facilities was less than the annual sum. In that case SLM would keep half of the difference and return the other half to the Council. SLM was to provide the staff who carried out day-to-day work at the Centres in accordance with the Council's instructions and policies and subject to the Council's control to the extent which left SLM with little scope for initiative in managerial decisions.
(6) Under the contract wide ranging powers were conferred on a Supervising Officer to exercise the functions, rights and powers conferred by the contract on the Council. SLM's counterpart was a Contract Manager who was obliged to follow and comply with any instructions given or issued by the Supervising Officer in connection with the provision and performance of the services and manner and methods of working. The Contractor had to obtain the prior written consent of the supervising officer before reducing the numbers of those engaged on the contract and he could require the contractor to engage additional supervising staff at SLM's cost. Other terms of the contract preserved the status quo, eg the passport to leisure scheme. The Council retained overall control of almost every aspect of the facilities eg, the programme of daily events; the Passport to Leisure scheme; the Council's Sports Development Team; price and charges were to be approved by the Council in accordance with its social objectives. Staffing, advertising (use of Council's logo and wording), indoor plant maintenance and cleaning practices were all specified. Complaints were to be addressed to the Council. SLM did not purchase the Council's equipment and acquired no proprietary interest in the premises of the Centres. SLM did not agree to take on the Council's staff.
(7) Mrs Birch and 37 other Applicants named in a list attached to the full reasons of the Tribunal, were employed in the management and operation of the Council's Leisure Services Division. They were dismissed in common with all of the employees in that Division by the Council at the end of December 1991 for redundancy prior to SLM assuming their responsibilities under the contract. Some became employees of SLM. SLM employed 108 staff at the three centres. Of these 47 were former Council employees some of whom joined in January 1992, some later, not all in jobs similar to those done with the Council. On 25 February 1992 Originating Applications were presented by the Applicants claiming unfair dismissal against both the Council and SLM under the Directive and under the Regulations. They contended that there was a transfer of an undertaking in the nature of a commercial venture by the Council to SLM and that they were protected against dismissal.
(8) The Council alleged in the case of Mrs Birch and many others that the dismissal was for redundancy on 31 December 1991, that the Directive was not directly applicable, that there was no transfer of an undertaking within the meaning of the Directive or the Regulations and, if there was a transfer, it was of an undertaking not in the nature of a commercial venture for the purpose of the Regulations. Finally, they contended that if the Directive and/or the Regulations did apply, the Council was not liable as all the rights, powers, duties and liabilities had been transferred to SLM.
(9) SLM's Notice of Appearance in April 1992 made the initial point that the Applicants had never been employed by them and that they had been dismissed by the Council, not by SLM. They also contended that there was no transfer of an undertaking for reasons similar to those relied upon by the Council. They disputed the reason for dismissal was a reason connected with the transfer and that, in any event, the reason or principal reason for dismissal was an economic, technical or organisational reason entailing changes in the workforce and the dismissal was reasonable in all the circumstances and was fair.
THE TRIBUNAL'S DECISION
The Tribunal explained in detail the reasons for the decision sent to the parties on 8th November 1993 that the contract was not a relevant transfer for the purposes either of the Regulations or the Directive and that the complaints against SLM should be dismissed.
The sole question was whether there was a relevant transfer for the purposes of the unamended Regulations. The Tribunal's reasoning was as follows:-
(1) The correct approach to the Regulations was, where possible, to construe them so as to conform with the Directive. The Tribunal was therefore obliged, if it was possible to do so, to give to the definition of "undertaking" into the unamended Regulations a meaning consistent with that accorded to it in the Directive. The Tribunal concluded that that "manifestly is not possible". The Directive, as interpreted by the European Court of Justice, applies to employment in every kind of business or undertaking; but the Regulations do not apply so widely, as the definition of "Undertaking" in the Regulations is not co-extensive with that of a Directive and therefore the Regulations cannot be construed in conformity to the Directive.
(2) Mindful of the obligation to interpret the words "not in the nature of a commercial venture", in the light of and in order to give effect to the purpose of the Directive, so far as is possible to do so without distorting the language of the Regulations, the Tribunal rejected the suggestion that the proviso referred to organisations which were merely unprofitable. The interpretation favoured by the Tribunal was that the phrase "not in the nature of a commercial venture" was "to be confined to charities or undertakings with a charitable purpose". (paragraph 15) The Tribunal referred to section 1 of the Recreational Charities Act 1958 and concluded that the Council's provision of leisure facilities fell within the definition of a recreational charity contained in that Act. The undertaking of the Council was therefore "not in the nature of a commercial venture" and the Regulations did not apply. The Tribunal concluded that it was constrained to decide the preliminary issue against the Applicants. It added in paragraph 18 that, however narrowly the exception in Regulation 2 was construed, that which [the Council] provided prior to the contract was "not in the nature of a commercial venture".
(3) But for the "commercial venture" point the Tribunal would have held that what the Council operated prior to the conclusion of the contract was an undertaking and they were prepared to assume that the subject matter of the contract was part of the undertaking. Although the Council was responsible prior to the contract for both the provision and management of leisure facilities, that which they contracted out was merely its management. The Tribunal said (paragraph 20):
"That would plainly not be the transfer of an undertaking or part thereof, but rather the creation of a new business of managing that which the respondent authority continued to provide."
The contract perpetuated the Council's policies, management style and practices and severely restricted SLM's freedom of movement. The Tribunal, as the "national court of factual appraisal" then looked at all the factors which, according to the cases decided in the European Court of Justice, should be taken into account. The Tribunal concluded that the Council did not transfer part of their undertaking to SLM. They distinguished certain cases cited to them such as Kenny v Porter, as concerned with tripartite transactions where one service provider under a contract for the supply of services was replaced by another service provider. They identified the current case as a "bipartite arrangement whereby a contractor is for the time being providing services to a consumer of the service."
(7) In deciding that there was no relevant transfer the Tribunal pointed out that the Council retained the buildings and granted SLM a licence for the duration of SLM's exercise of the functions. SLM's function was to carry out, on behalf of the Council, the managing of that which the Council were by statute empowered to provide. After the contract was concluded the Council was still responsible for the provision of the facilities. (paragraph 28)
"...They had merely contracted out the management of part of the facilities. ultimately [the Council] not [SLM] which took all of what are normally regarded as the managerial decisions. Perhaps the Contract is best described as contracting out not the management of the facilities but the discharge of the [Council's] managerial decisions with regard to the facilities. There was no relevant transfer. ..."
The Appellants appeal by a Notice of Appeal served on 15th December 1993.
In our view, the Industrial Tribunal applied an incorrect legal test to determine whether the undertaking of the Council in relation to the provision in management of leisure facilities was or was not "in the nature of a commercial venture". The matter should be remitted to the Industrial Tribunal to determine that question by applying the correct legal test. Each party will have leave to adduce further evidence and make further submissions in relation to that issue.
The Tribunal also erred in law in concluding that there was no relevant transfer. On that issue there are no further facts or arguments. It is open to us to hold, on the facts found by the Tribunal, that only one conclusion is possible in the light of the recent decisions: there was a relevant transfer.
Our reasons for these conclusions are as follows:
A. The Commercial Venture Point
The correct approach on this issue is to consider all the relevant factual circumstances and factors in the context of the purpose and scope of the Directive. For the purposes of the Directive an undertaking is not excluded from its scope because it lacks a commercial purpose or because, for example, it is funded by public subsidy: Dr Sophie Redmond Stichting v. Bartol [1992] IRLR 366.
For the purposes of the Regulations, no single factor or circumstance is decisive and no exhaustive definition of a "non-commercial venture" exclusion in Regulation 2 is possible: Woodcock v. Friends of Wigton School [1987] IRLR 98; Wren v. Eastbourne BC [1993] ICR 955 (where it was decided that a profit motive is not necessary for an undertaking to be in the nature of a commercial venture). An activity of a public authority may be in the nature of a commercial venture if it charges the public for the use of its services or if it carries on its management, administration and accounting methods in a manner similar to those of commercial ventures. It would be relevant in the case of a Sports Centre, for example, to make a comparison with one which is undoubtedly run on commercial lines.
In our view, the Industrial Tribunal erred in law in failing to follow the approach summarised above. In an understandable attempt to grapple with the negative generality of the expression "not in the nature of a commercial venture" the Industrial Tribunal attempted to be more specific in a manner which is a misdirection in law. Neither the ordinary meaning of Regulation 2 nor the authorities on its interpretation justify the application of the law relating to charitable trusts or charitable purposes or the provisions of the Recreational Charities Act 1958 so as to conclude that the Regulations excluded charities or undertakings with a charitable purpose. The existence of a charitable purpose is a relevant consideration in deciding whether an undertaking is in the nature of a commercial venture, but it is not a conclusive factor. A non-charitable undertaking may also be non-commercial. A charitable undertaking may, in all the circumstances, properly be regarded as "in the nature of a commercial venture".
The correct approach is for the Tribunal to ask of each of the three sports centres whether they are undertakings in the nature of a commercial venture, not whether they are established for a charitable purpose. The Tribunal must look at the essence of the undertaking, its purposes, organisation, users and the policies governing its management and make a comparison of all those factors with a private sports centre run on commercial lines in order to see whether, on a consideration of the similarities and differences, the particular undertaking is in the nature of a commercial venture.
We are unable to accept the submissions of SLM and the Council on this point. They argue that the Tribunal was entitled to come to an unappealable conclusion of fact on all the evidence that the operation run by the Council prior to the involvement of SLM was not in the nature of a commercial venture. The Tribunal correctly looked at the nature of the operation in the hands of the Council who ran it in the interests of social welfare, not as a commercial venture. It would not be a correct approach to look at the nature of the activities in the sports centre generally in order to see whether they were capable of being or becoming operated commercially. The Council did not conduct the operation as a matter of business or with an interest in or looking to financial returns or profit. On the contrary, it was deliberately uncommercial. It was influenced by considerations of social priorities, massive subsidies and free and concessionary schemes. The Tribunal was entitled to use the analogy of charity. The concept was not used for defining a non-commercial activity in the terms of charity. It recognised that an undertaking could be commercial, even though it was unprofitable or deliberately run at a loss. Whether the exception for undertakings "not in the nature of a commercial venture" was interpreted narrowly or widely, the conclusion would be the same. The Council was clearly opposed to a commercial approach. It was providing a public service on which it made losses. It had a deliberately non-commercial pricing policy with use of free passes. It was a case of pervasive pursuit of social objectives used as an instrument of social policy.
The Community law dimension would not affect the result. The European Court of Justice had confirmed in infringement proceedings brought by the European Commission against the United Kingdom that the expression "not in the nature of a commercial venture" in Regulation 2 excluded non-profit making organisations. The sports centres in this case fell within that description. That was the very basis on which the European Court had found that the United Kingdom was in breach of its Community law obligations. See European Commission v. UK [1994] IRLR 393 paragraphs 40 - 42 and the submissions of the Commission in the United Kingdom at pages 398/399 and of the Advocate General at pages 404 and 405. In those circumstances it was decided that the unamended Regulation had failed to give effect to the Directive.
We do not to accept these submissions. As far as the Community point is concerned, the European Court of Justice found the exclusion in the definition of `undertaking' to be an infringement, but that is not conclusive of this case. The issues in the Commission's infringement case and this case are different. The issue in this case is whether the three particular sports centres are undertakings in the nature of a commercial venture. The issue in the ECJ case was whether the United Kingdom had failed to transpose the Directive fully and correctly into domestic law by means of the Regulations. It was conceded that the United Kingdom had failed to do that by making an exception for certain types of undertaking. It may be a consequence of making the exception in the Regulations that the Regulations made under the European Communities Act 1972 are, in part, ultra vires. It may also be the case that the Directive cannot be relied upon by the Council as an emanation of the State. Those aspects of the matter have not been explored in argument and do not arise for decision by us. Before the Industrial Tribunal the Appellants reserved the question whether the words of exclusion in Regulation 2 should be disapplied, as well as questions of direct effect of the Directive where one of two respondents is a State entity.
The decision in the Commission's case was on the basis of a concession made by the United Kingdom that non-profit making organisations are excluded by the Regulations. That concession is not binding on the parties, or on the Industrial Tribunal or on this Tribunal. No such concession has been made by the parties in this case. The Court made no determination of the scope of the derogation in Regulation 2.
Further, as far as the Regulations were interpreted by the European Court of Justice, (which we do not believe they were) that Court's powers are limited to the interpretation of Community law and do not extend to the interpretation of domestic law. That is a matter for the domestic court. In brief, our conclusion is that the result of this case is not concluded by the concession in the Commission's case and the Tribunal misdirected itself by asking whether the activities and purposes of the sports centres were charitable in law instead of asking the relevant question whether they were in fact "in the nature of a commercial venture".
B. The relevant transfer point
On this point the Council and SLM submitted that the Industrial Tribunal was entitled on the evidence to reach an un-appealable factual conclusion that, even if the undertaking was in the nature of a commercial venture, there has been no relevant transfer of it. The Industrial Tribunal referred to the relevant facts and the relevant ECJ decisions including those on which the recent decision in Schmidt v. Spar was based, namely, Spijkers v. Benedick [1986] 3 ECR 1119, Sophie Redmond [1992] IRLR and Rask v. ISS [1993] IRLR 133.
It was submitted that the undertaking consisted in the provision of leisure services to the public. The operation of providing those services has not been taken over from the Council by SLM. The Council has not ceased to carry on the operations. On the contrary, the Council has continued the operations. It has continued to control them, to make management decisions and to represent itself to the public as the provider of the services. It deliberately retained responsibility for the services under the agreement. SLM only provided assistance to the Council pursuant to a contract for services. SLM did not acquire an undertaking previously run by the Council. There was no transfer of buildings, equipment or staff. The undertaking remained that of the Council with SLM providing assistance in discharging certain managerial decisions. The undertaking was the provision of services to the public. That undertaking was not transferred to SLM or taken on by them. The Council controlled it and continued to make management decisions.
In our judgment, the decisions in Schmidt v. Spar and Dines demonstrate that the Industrial Tribunal, whose decision the Council and SLM seek to support, took a too restrictive approach to the law and its application to the facts. The correct test was not applied by the Tribunal. On the facts found by the Tribunal the only proper view is that part of the Council's undertaking retained its identity in the hands of SLM. SLM continued the same or similar activities previously carried on by the Council in the three centres. That is sufficient for there to be a relevant transfer for the purposes of the Regulations. In relation to our conclusion the following points are noteworthy:
(1) A transfer may occur, even though there is no transfer of ownership of tangible or intangible assets, equipment, goodwill, materials or clients. It is sufficient that the transferee is responsible for actually doing the work of providing the services in question: Porter v. Queens Medical Centre [1993] IRLR 492.
(2) Some of the same activities previously carried out by the Council are in fact now carried out by SLM, not by way of commencing a new undertaking on the cessation of an old one, but of continuing the existing one in part, involving some of the same employees working at the same place doing the same or similar work. It is not the case of creating a new business of managing that which the Council continued to provide.
(3) There may be a transfer for the purposes of the Regulation even though the Council retained "a very considerable degree of control over the way in which SLM provided services under the contract with the Council": Kenny v. South Manchester College [1993] IRLR 934 at 951H - 953D. In fact the degree of control confirms the transfer by emphasising the retention of the identity of the management part of the undertaking in different hands. SLM continued those activities the same as before.
(4) The transfer consisted in the contracting out of the management of the leisure facilities. We do not agree with the Industrial Tribunal's conclusion that it was the creation of a new business of managing that which the Council continued to provide. The Council had previously managed: the management continued in different hands. SLM is now responsible for the management of the provision of the services and incurs the obligations of the employer vis-a-vis the employees in the undertaking. The undertaking in which the employees were employed has changed hands. It has therefore been transferred. If similar activities are continued in different hands, the identity of the undertaking is retained, a transfer occurs, the employees follow the work and protection is enjoyed by the employees. See Council of Isles of Scilly v. Brintel Helicopters Ltd [1995] ICR 249; Kelman v. Care Contract Services [1995] ICR 260.
(5) The Tribunal erred in unduly emphasising the aspect of transfer of ownership of assets. The essential point is that there has in this case a contracting out of activities (ie the management of provision of leisure facilities) not the creation of a new business. Whether SLM's role is characterised as "the management of the facility" or the "discharge of the Council's managerial roles with regard to the facilities", there was, in our view, a transfer of the activities and therefore of part of an undertaking. SLM were doing something which the Council had previously done and were contractually bound to do it. They were responsible for recruitment, training and day-to-day organisation, the powers of and maintenance of the premises, equipment, materials, heating and lighting, the adoption of a safe, efficient and secure working practices and for the provision and maintenance of all the necessary facilities. That is sufficient to constitute a relevant transfer.
CONCLUSION
For all those reasons the appeal in this case is allowed and the matter is remitted to a different Tribunal to determine the question whether the relevant undertaking which was transferred was or was not "in the nature of a commercial venture".