United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	NO APPEARANCE BY OR REPRESENTATION ON BEHALF OF THE APPELLANT


 


JUDGE J HICKS QC: This appeal is listed for a Preliminary Hearing today and the first question we have to consider is whether we can deal with it in the absence of the Appellant, Karalia Ltd. The Respondent, Mrs Eracli, was of course not required to attend, this being a Preliminary Hearing only.

The situation is that the Notice of Appeal was dated 1 April 1997 and was in EAT Form 1. In paragraph 2 the printed form reads: "Any communication relating to this appeal may be sent to the appellant at ...". There is then in brackets and italics what clearly is intended to be, and would be understood to be, an explanation of what has to be inserted, in these words: "(appellant's address for service, including telephone number, if any)". Below that has been filled in by the Appellant the words "As Above" and the telephone number. The "As Above" refers back to paragraph 1 of the Notice, which gives the name and address of the Appellant, and the address given is "Block E, Unit 3, Bounds Green Industrial Estate, London N11 2UN". It is quite plain, therefore, that in accordance with the rules the Appellant has, in the Notice of Appeal, given that address as its address for service and informed the court that any communication relating to the appeal may be sent to it there.

Two communications have been sent by this Tribunal to the Appellant by ordinary post at that address, one on 12 June which informed the Appellant that the appeal would be set down for a Preliminary Hearing (and the listing direction explaining what that means was enclosed) and then the letter went on to deal with the consequences of success or failure on that Preliminary Hearing. Then there is this paragraph in bold type:

"Please note it is likely that your appeal will be set down for hearing at short notice and you may only be given 24 hours advance warning. It is important therefore that you have your case prepared and ready for hearing."

I comment that from that, if nothing else, it must also have been apparent to the Appellant, if received, that it was important to give notice of any change of address. However, for reasons which will appear, we cannot be certain that that letter itself reached the Appellant, although it was posted to the address for service.

The second communication was dated 17 July and was a Notice of Hearing and gave notice that the Preliminary Hearing before this Tribunal would be held at 10.30 am today, Thursday 18 September 1997.

There was no response to either of those communications nor any indication that they had not been received until this morning when, as a result of enquiries by this Tribunal, a faxed message was received from the address for service, but on a compliments slip from a company called Seagull Textiles Ltd, saying "No forwarding address for Karalia".

In view of the history of the business which was carried on at that address, to which we shall need to come if we deal with the substantive appeal, attempts were made to establish whether that company, Seagull Textiles Ltd, had any association with or involved the same governing persons as Karalia Ltd, but so far as appears it is totally separate and, indeed, it appears that Karalia Ltd may have vacated the premises at the end of May 1997.

We have therefore to consider whether we can or should deal with the appeal. The rules require a Notice of Appeal to be in, or substantially in, Form 1 and therefore to include an address for service and they also provide for the Registrar to give notice to the parties of the arrangements for hearing the appeal, as was done by the two letters which I have referred to. The fact that the matter is listed for appeal is also published in the daily list issued by this Tribunal and incorporated in the daily cause list of the Supreme Court of Justice and is therefore, in that sense, public knowledge.

We have not found any authority as to whether this Tribunal has jurisdiction to proceed, or as a matter of proper practice should proceed, when it appears that notices properly sent to the address for service have not been received or forwarded, the Appellant not having notified any change of address for service, but we have come to the conclusion that it is within our jurisdiction to proceed and that it is appropriate to do so in circumstances where the failure plainly lies at the door of the Appellant in failing to notify a change of address and in circumstances where the listing of the matter for hearing is within the public domain. We therefore proceed to deal with the appeal and for that purpose, in the absence of the Appellant or its representative, we look at the grounds for appeal set out in the Notice of Appeal. Before addressing those I should briefly recite the relevant facts.

The Respondent, Androulla Eracli, was employed as a machinist at the address which I have mentioned from October 1986. She was first, as the Industrial Tribunal found, employed by a company called Eversham Limited, of which the owners, shareholders and directors were a Mr and Mrs Michaelides. Mr Michaelides was actively in personal charge of the establishment. In January 1992, as the Tribunal found, Eversham Limited was struck off the register of companies and Mr and Mrs Michaelides, having formed a new company, Arilina Ltd, carried on the business in the sense of controlling and running that new company.

About two years later Arilina Ltd went into liquidation and Mr and Mrs Michaelides continued to control matters by forming the Respondent company Karalia Ltd, and the business continued. The Tribunal found as facts that throughout these events the work in the factory continued unchanged and that the employees did not see any signs of change, or that the business was in the hands of a new company, other than the change of name on the premises and on the payslips and other business stationery. No redundancy payment was made on any of these changes.

Since the Respondent was a machinist and the business was that of a garment factory it is apparent that there would be equipment and plant, and we take the implication of those findings by the Tribunal to be that in those respects, as in all others except name, things continued unchanged throughout that period. It seems that the lease of the premises was held by Mr Michaelides personally, which would explain why this succession of companies was able to go on trading at that address and why the lease did not fall into the hands of liquidators or the Crown.

On 12 December 1995 Mrs Eracli was dismissed by Mr Michaelides on behalf of the Appellant Company on the basis that there was not enough work to keep her in employment and she left at once. It was not, at the hearing, in dispute that that dismissal was for redundancy. The only issue taken before the Industrial Tribunal, as they record in paragraph 14 of their Reasons, was that the three companies which had run the business were all separate and that accordingly the only continuous employment on which Mrs Eracli could rely was that with the Appellant Company from May 1994 and, therefore, not long enough to entitle her to a redundancy payment.

The Tribunal rejected that contention on the ground that there had, on each of the two occasions that I have mentioned, been a transfer of the trade, business or undertaking in which Mrs Eracli had been employed and that Section 218(2) of the Employment Rights Act 1996 applied by virtue of the relevant transfer regulations and that Mrs Eracli's continuity of employment was not broken.

The Notice of Appeal puts forward three grounds in support of essentially the same point, that there was no continuity of employment. First, as to the first Company, Eversham Limited, the grounds state that it did not go into liquidation but was struck off. That indeed appears from the Tribunal's Reasons and was therefore plainly in the Tribunal's mind. The grounds go on:

"When a Company is struck off under these circumstances, all its assets and its business become the property of the Crown".

It is said that that is what happened, and therefore there was no transfer of business as defined in Section 218(2).

Then secondly, on the second occasion, when Arilina Limited was liquidated, the grounds state that none of its assets or goodwill were sold to the new company, and the argument is that there was no transfer of business therefore on that occasion and it is at that point that the reference is made to the lease of the premises belonging to Mr Michaelides.

Thirdly there is a reference to the opinion of the liquidator of Arilina Limited, which is of no relevance, and those are the grounds.

It seems to us that since we have no one here to help us as to what happened before the Industrial Tribunal we must consider two possibilities. Either those submissions about the consequences and effect of the striking off of Eversham Ltd and the liquidation of Arilina Limited were put in detail to the Industrial Tribunal or they were not. If they were not then the Industrial Tribunal plainly fell into no error of law and this appeal fails. If they were put to the Tribunal the question is: "Did the Tribunal fall into any error of law in the way in which it approached the matter?". Its findings were that throughout the relevant events the work in the factory continued unchanged. The employees did not see any signs of change or that the business was in the hands of a new company other than the change of name on the premises.

Whatever may be the details, therefore, of what assets, if any, passed to the Crown on the striking-off of Eversham Ltd and what assets, if any, passed to the liquidator of Arilina Limited and subsequently, when that was struck off, to the Crown, there was ample evidence in our view for the Tribunal's finding that the business passed on each occasion to the new Company. Quite apart from the plant and machinery (to which we have referred) it is manifest that the goodwill passed. That was why the same customers continued to come and the business was able to continue at all. It would have been a worthless business if it had started afresh on each occasion and Mr and Mrs Michaelides had had to seek new custom and, in our view, the Tribunal was fully entitled to find as a fact and fell into no error in finding as a fact that there was a transfer in those circumstances and that the business for the purposes of Section 218(2) and the Transfer of Undertakings (Protection of Employment) Regulations 1981,

did indeed transfer, so that the employment was continuous.

We therefore find no error of law in the decision of the Tribunal and dismiss the appeal.