United Kingdom Employment Appeal Tribunal

BAILII case number: [1996] UKEAT 1230_94_0702

Appeal No. EAT/1230/94

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 7 February 1996

Before

THE HONOURABLE MR JUSTICE MUMMERY (P)

MR J R CROSBY

MR D A C LAMBERT

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FLEETWOOD SPORTS DEVELOPMENT LTD T/A FLEETWOOD FOOTBALL CLUB          APPELLANTS

MRS B LAYTON          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants NO APPEARANCE BY OR ON BEHALF OF           APPELLANT

For the Respondent MR C GRUNSHAW

(Representative)

Citizens Advice Bureau

43 Lord Street

Fleetwood

Lancs. FY7 6DU


 


MR JUSTICE MUMMERY (PRESIDENT): This is an appeal by Fleetwood Sports Development Ltd, trading as Fleetwood Football Club, against the decision of the Industrial Tribunal held at Manchester on 19 October 1994. In the extended reasons sent to the parties on 15 November 1994, the Tribunal explained why they reached the unanimous decision that the Applicant, Mrs B A Layton was unfairly dismissed by the Respondent Football Club and was awarded a total of £1770 compensation.

The Football Club appealed against the decision. The Notice of Appeal is dated 22 December 1994 and was later amended by the addition of two new, paragraphs 6.9 and 6.10. There was opposition to the amendment from Mr Grunshaw, the representative of Mrs Layton, who has appeared today, but, after considering written submissions, the Registrar made an Order on 26 April 1995 granting the application to amend.

The position today is that no-one has turned up from the Football Club to argue the appeal. No representative has attended on their behalf. The court file shows that down to the first week in November 1995, a firm of solicitors, Livingstone Company of Bridge Street, Manchester, represented the Appellant. But they wrote to the Tribunal on 8 November 1995 saying that they could no longer obtain instructions and they wished to come off the record. The only contact which a Tribunal has since had with the Club is that a letter was sent in December in relation to convenient days for the hearing of the appeal. In the absence of any response to that, a letter was sent to both the Appellant Club and to Mrs Layton's representative, giving notice that the hearing of the appeal would take place today.

The Listing Officer has informed us that he had a telephone call this morning from the Club, referring to the fact that all the papers were not available to them, but there was no application to him or through him for an adjournment. So far as we know, there is no good reason for the absence of the Club from today's hearing. There has been a delay in the hearing of the appeal because we received a call this morning from Mr Grunshaw. He gave notice that he intended to appear today for the Respondent. Because of the bad weather, he was held up in his train journey from Lancashire. Fortunately he arrived. We thank him for his efforts to be here and for help in clarifying certain aspects of the case in our discussions.

In the absence of any known reason for the non-attendance of the Appellant, it would be open to us simply to dismiss the appeal for want of prosecution. But we have read the papers and know the grounds on which the Appellants are bringing the appeal. We have heard from Mr Grunshaw the grounds upon which Mrs Layton is opposing the appeal. We are therefore in a position to state briefly why, in our view, there is no legal error in the Tribunal's decision. They were right to find unfair dismissal of Mrs Layton. It is not necessary to repeat all the facts found in the Tribunal's decision.

In outline, the position is this Mrs Layton was employed as a cleaner by the Fleetwood Football Club when it was still unincorporated. She started her employment in December 1983. She was transferred on the incorporation of the Football Club as Fleetwood Town Football Club (1992) Ltd. She was transferred to them on 21 September 1992. All went well until that company got into financial difficulties, which resulted in it being compulsorily wound up in January 1994. The financial difficulties led to a crisis on 20 December 1993, because the freeholders of the football ground premises, Wyre Borough Council, repossessed the football ground (Highbury Stadium) on that day by forfeiting the lease to the Club. The Tribunal found that on the same day a licence was granted to use the ground. That licence was granted to yet another company, which has since been trading as Fleetwood Football Club. That other company is the Appellant, Fleetwood Sports Development Ltd. The Tribunal found that on 20 December, the same date as the forfeiture of the lease and the grant of the licence, Mrs Layton received a letter from the Chairman of Fleetwood Sports Development Ltd indicating that she was being dismissed forthwith from her position as a cleaner and that that company had no intention of continuing to employ her in that capacity; although it did intend to advertise in the near future for a cleaner. She was invited to apply for that position. The circumstances of her dismissal led Mrs Layton to bring a case to the Industrial Tribunal. She presented her IT1 on 6 January 1994. In that she claimed she claimed she had been unfairly dismissed without notice, and claimed reinstatement. When it came to the hearing, she had decided to opt for compensation only.

The question for the Tribunal was whether in those circumstances there was a transfer of an undertaking within the meaning of the TUPE Regulations 1981: whether there was an undertaking transferred in December 1993 from Fleetwood Town Football Club (1992) Ltd to the Appellant. If there was a transfer of an undertaking in which Mrs Layton was employed, then her employment continued in the hands of Fleetwood Sports Development Ltd. If she was dismissed by reason of the transfer, that would amount to an automatically unfair dismissal.

In our view, the Tribunal were right to reject the arguments of the Appellant. Their case was that the reason for dismissing Mrs Layton was that the new company wanted to have a "fresh start" and a "clean sweep". It did not wish to employ anyone who had been associated with the previous management of the Football Club. In fact, as appears from the decision, Mrs Layton was the only person employed by the 1992 company who did not continue to be employed by Fleetwood Sports Development Ltd. The Tribunal found in paragraph 7 of the decision that, the dismissal of Mrs Layton pursuant to regulation 8 of the 1981 Regulations was directly due to the transfer on 20 December. In those circumstances she had been clearly unfairly dismissed. They explained in the remainder of the decision the manner in which they calculated entitlement to compensation.

Mr Grunshaw submitted that the decision of the Tribunal was clearly correct. The findings of fact showed that there was no cessation of the activities of the undertaking, (ie the Football Club) in December 1993. There was a continuity of activity. In those circumstances the regulations applied. If the Appellants were here or represented today, what arguments could they advance for saying there was an error of law in this decision? Their amended Notice of Appeal deploys a number of arguments. They are these. They said that the Tribunal was wrong in holding that there was a transfer of an undertaking, pursuant to Regulation 8. They said that to be a transfer there had to be a consensual arrangement between two parties. That had not happened. They said that there was no evidence or insufficient evidence to justify the conclusion that there had been a transfer of an undertaking. They said there was no transferor or transfer. The Football Club had simply ceased to exist. Its affairs had been handled on a temporary basis by an action committee. Neither the Club nor the action committee were in a position to pay rent. The Council forfeited the lease as they were entitled to. The licence from the Council was taken on a temporary basis for the same football stadium, with a distinct possibility that that could be revoked at any time, if the Football Association would not allow the Appellant to be substituted for the former Fleetwood Football Club. The Tribunal had misunderstood the law and misapplied it to the facts of the case. They contended that there had been a novus actus of the landlords in forfeiting the lease. They also took a point that the Tribunal had failed to take into account the fact that the Appellant is not a commercial venture. It asserted that their Articles of Association show that, on a liquidation, any surplus should be given to charity.

They summarised their arguments by saying that there was no continuity. Although the Appellant company succeeded to the position of the former football club in the Northern Premier League following the grant of the licence, it was only the ground itself which was of any use. The ground itself was insufficient to constitute a transfer. They made an additional point, in their amendment, that the Tribunal were wrong in not considering whether any goodwill had passed, or whether there was any goodwill to pass. Finally, they made a point, which does not seem to have been made at any earlier point in the proceedings in the Notice of Appearance, or before the Industrial Tribunal, that if the 1981 Regulations did apply, there was no unfair dismissal, because the dismissal of Mrs Layton was due to economic, technical or organisational reasons. No new cleaner was in fact employed by them, because they did not have the financial resources to employ a new cleaner.

We have considered those arguments. In our view, none of them amount to a valid legal argument or identify any error of law in the decision. On some particular points the arguments are misconceived. It does not matter whether the Football Club is a commercial venture or not. Since 30 August 1993, when all the relevant events in this case occurred, the TUPE Regulations have, by reason of amendment, the same application to non- commercial undertakings as they have to commercial undertakings. In any case, Mr Grunshaw said he would have wished to argue that this was a commercial venture. The point about economic, technical or organisational reasons cannot be properly raised on this appeal. It is a new point which should have been advanced to the Industrial Tribunal, because evidence would be required in relation to that defence, before any decision could be made as to whether that was a valid ground for dismissal. As to the general points made on the transfer of an undertaking, it appears to us that the point repeatedly advanced that there was no continuity, that they were only temporary arrangements, that there was a cessation of activities and so on, that on a fundamental misunderstanding about the nature of the regulations and their application.

The facts, in our view, clearly justified the Tribunal in finding that there was here continuity of activity in the form of an undertaking, namely the Football Club, which continued without a break after December 1993 in different hands. This is a paradigm case for the application of the regulations. As no other reason has been shown for Mrs Layton's dismissal, the Tribunal were right to find she was unfairly dismissed. For all those reasons the appeal is dismissed.