United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR P OLDHAM (of Counsel) Legal Services London Borough of Ealing Percival House 14/16 Uxbridge Road London W5 2HL
For the Respondent	MR G CLAYTON (Solicitor) Hamilton House Mabledon Place London WC1H 9BD


 


JUDGE PETER CLARK: On 11th February 1997 a division of this appeal tribunal presided over by Kirkwood J handed down its judgment allowing an appeal by the appellants against a decision of the Stratford Industrial Tribunal dated 12th July 1995 that the respondent employee, Mr Askew, had been unfairly dismissed.

The matter was adjourned for further argument arising out of the respondent's answer. That further point came on for hearing before us on 22nd May 1997.

The parties

The first appellant is the Governing Body of Clifton Middle School ["the old Governing Body"]. The second appellant is the Governing Body of Clifton Primary School ["the new Governing Body"]. The third appellant is the London Borough of Ealing ["Ealing"]. The respondent ["Mr Askew"] was employed at the Clifton Middle School as a teacher, responsible for teaching French to year 7 pupils, aged 11-12 years, although under the terms of his contract of employment he could be required to teach other age groups in the Middle School and other subjects.

The facts

Prior to 1st September 1993 the Middle School shared a site with Clifton First School, which taught younger children. Each school had its own governing body. Ealing decided, with the approval of the Secretary of State for Education, to reorganise those schools. That reorganisation involved closing Clifton Middle and First schools, and opening a new school, Clifton Primary school, which would teach children up to age 11. Year 7 of Clifton Middle was to go to secondary education.

The statutory regime for such a proposal is contained in s.12 of the Education Act 1980 which provides:

"(1) Where a local education authority intend-

(a) to establish a new county school;

...

(c) to cease to maintain any county school, ...

...

they shall publish their proposals for that purpose in such manner as may be required by regulations made by the Secretary of State and submit to him a copy of the published proposals."

Ealing decided to proceed by way of ceasing to maintain both Clifton Middle and First Schools, which were County Schools, under s.12(1)(c), and to establish a new County School, Clifton Primary School, under s.12(1)(a).

In May 1993 Ealing gave Mr Askew notice of dismissal from his post as a teacher at Clifton Middle School to take effect on 31st August 1993, following what were accepted by him as fair procedures.

The dismissal arose in this way. It is common ground that at all relevant times Ealing employed Mr Askew under a contract of employment. Indeed, s.239(2) of the Education Act 1993 provides in terms:

"A governing body ... may

(b) enter into contracts, other than contracts of employment ..."

The process leading to dismissal involved first the Old Governing Body making a determination, under paragraph 8(1) of Schedule 3 to the Education Reform Act 1988, that Mr Askew should cease to work at Clifton Middle School. and duly notifying Ealing of that determination and the reason for it, namely redundancy. Upon receipt of that notice Ealing gave Mr Askew notice terminating his contract of employment, as it was bound to do under paragraph 8(2) of the Schedule.

Mr Askew appealed unsuccessfully to the Old Governing Body against his dismissal. He also applied for a job at Clifton Primary School, again without success.

However, on 2nd August 1993, before his contract terminated, he was re-deployed by Ealing and remains in their employment, albeit in a temporary rather than a permanent position, at another school.

The Complaint

By an originating application presented to the Industrial Tribunal on 5th November 1993 Mr Askew complained that he had been unfairly dismissed, naming Ealing, the old Governing Body and the new Governing Body as respondents. He sought only a declaration to that effect.

He put his claim in two ways:

(1) he alleged that what had in reality happened was that the Clifton Middle and First Schools had been amalgamated into one school, Clifton Primary, and that the establishment in which he had been employed continued to exist for all practical purposes within a larger unit under a new name and with a change in the pupils' age range. He contended that such process ought to have made no material difference to his continued employment there, so that his dismissal was unfair ["the first point"].

(2) alternatively, that he had been dismissed solely by reason of a transfer contrary to the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ["TUPE"], read with the Acquired Rights Directive, EC Directive 77/187 ["the Directive"]. We shall call this "the transfer point".

The Industrial Tribunal decision

The Industrial Tribunal decided only the first point, and decided it in Mr Askew's favour, accepting the argument presented on his behalf that Ealing failed to operate the correct procedures. The tribunal found that there was an amalgamation of the Clifton First and Middle Schools to form the Clifton Primary School, and not a closure of the first two schools and establishing of a new County School, Clifton Primary School, as the respondents before the tribunal had submitted. In these circumstances the tribunal held that the amalgamation was not, in itself, a ground for dismissal, and consequently Mr Askew's dismissal was unfair.

Having so decided, the tribunal found it unnecessary to consider the alternative transfer point, and did not adjudicate on that issue.

The Appeal

We refer to the judgment of Kirkwood J. In essence, that division of the appeal tribunal upheld Ealing's argument that what had happened was not an "amalgamation" of two schools into one, but a cessation and establishment of a new school within the meaning of s.12 of the Education Act 1980. It further held that the old Governing Body and Ealing had acted correctly; that Mr Askew was dismissed by reason of redundancy, and that dismissal was fair.

Against that decision Mr Askew unsuccessfully sought leave to appeal from the Employment Appeal Tribunal; we understand that this application had been renewed before the Court of Appeal, but will not be determined until after we have ruled on the transfer point.

The transfer point

Since the transfer point has not been determined, either by the Industrial Tribunal or the first Employment Appeal Tribunal, we first heard the submissions of Mr Clayton on behalf of Mr Askew.

It is submitted that there was here a transfer of an undertaking or part of an undertaking, from the old Governing Body to the new Governing Body; that Mr Askew was employed in that undertaking, or part thereof transferred, immediately before the transfer; that he was dismissed as a result of the transfer and that, in the absence of an economic, technical or organisation reason for the dismissal, that dismissal was unfair.

That argument must be broken down into a number of propositions, which require individual analysis.

(1) was there a recognisable economic entity?

Relying upon the European Court of Justice decision in Spijkers v Gebroaders Benedik [1986] ECR 1119, Mr Clayton submits that Clifton Middle School was a business which retained its identity after 1st September 1993 when Clifton Primary School took over the teaching of essentially the same children, with much of the old staff, using the same books and equipment on the same site.

In response, Mr Oldham has referred us to the recent European Court of Justice decision in Brocken [1996] IRLR 701. In that case the Court held that there was no transfer within the meaning of Article 1(1) of the Directive where all the tasks of the Municipality of Schierke were transferred to a new local government body and the municipal administration of Schierke was dissolved. Specifically, it decided that the reorganisation of structures of the public administration or the transfer of administrative functions between public administrative authorities does not constitute a "transfer of an undertaking" within the meaning of the Directive.

In our judgment the case of Brocken may be distinguished from the instant case. The fact that a state-funded school is non profit-making does not preclude it from being an economic entity. Dr Sophie Redmond Stichting v Bartol [1992] IRLR 366. It had all the characteristics necessary to constitute an "economic entity". On this point we prefer the submission of Mr Clayton to that of Mr Oldham.

(2) Was there a transfer from one person to another?

Regulation 3(1) of TUPE provides:

"(1) Subject to the provisions of these Regulations, these Regulations apply to a transfer from one person to another of an undertaking situated immediately before the transfer in the United Kingdom or part of one which is so situated."

Mr Clayton accepts that there can only be a transfer, if at all, in this case, between the old and the new Governing Bodies. That proposition requires that for the purposes of the Regulations, designed to protect employees where the business in which they are employed is transferred from one employer to another, Mr Askew was employed by the old Governing Body, and that employment was transferred to the new Governing Body. Plainly, if his sole employer was Ealing throughout, there can be no transfer; Ealing cannot be both the transferor and the transferee. In order to resolve that issue, it is necessary to consider the next proposition.

(3) Was Mr Askew employed by the old Governing Body?

We have already observed that it is common ground that Mr Askew was employed by Ealing under a contract of employment throughout, and that by virtue of s.239(2) of the Education Act 1993 a governing body may not enter into contracts of employment. Further, Ealing owns the premises and funds the schools; their management is in the hands of the Governing Bodies.

Nevertheless, Mr Clayton submits that a relationship existed between Mr Askew and the old Governing Body which falls within the definition of "employee" to be found in Regulation 2(1) of TUPE.

Regulation 2(1) provides:

" "employee" means any individual who works for another person whether under a contract of service or apprenticeship or otherwise but does not include anyone who provides services under a contract for services and references to a person's employer shall be construed accordingly;"

Mr Clayton submits that Mr Askew worked for the old Governing Body. He points out that in the explanatory note to the Education (Modification of Enactments Relating to Employment) Order 1989 ["the Modification Order"], governing bodies have powers as to the appointment, suspension, discipline and dismissal of staff at the school, although the Local Education Authority remains the employer of those staff.

In particular, by Article 4 of the Modification Order, where an employee is dismissed by a Local Education Authority following notification of a determination by a governing body under paragraph 8(1) of Schedule 3 to the Education Reform Act 1988 (as in this case), the statutory provisions as to unfair dismissal and providing written reasons for dismissal shall have effect as if the governing body had dismissed him. Further, by Article 6, applications to an Industrial Tribunal complaining of unfair dismissal shall be carried on against the governing body, which is to be treated as if it were an employer.

Mr Clayton referred also to the School Teachers Pay and Conditions Document 1993, which places a teacher under the directions of the headteacher.

In our judgment that submission is based on a misreading of Article 2(1) of TUPE. We are quite satisfied, as Mr Oldham submits, that the expression "employee" means a person employed under a contract of employment or equivalent, as opposed to a contract for services. That is also the effect of the Directive. Where a person is employed under a contract of service, as Mr Askew was with Ealing, he cannot also "work for" a governing body which is not his employer so as to fall within the definition of "employee".

The position may be contrasted with a teacher ceasing to be employed by the Local Education Authority upon his school obtaining grant maintained status, whereupon he becomes employed by the governing body of the school pursuant to s.75 of the Education Reform Act 1988.

Upon a proper construction the word "otherwise" in Regulation 2(1) means "otherwise under a contract"; it does not relate to the words "works for another person".

Further, Regulation 5(1) of TUPE operates to preserve the contract of employment of a person employed. In our judgment Mr Askew must be able to rely upon the preservation of his contract of employment following a relevant transfer in order to come within the protection of Regulation 8 against his being unfair dismissed. He cannot do so.

For these reasons we hold that there was here no relevant transfer such as to give rise to a potentially unfair dismissal under Regulation 8 of TUPE. Accordingly, it is unnecessary for us to consider further argument as to whether Mr Askew was employed in the undertaking immediately before the transfer, or whether he was dismissed for an economic, technical or organisational reason.

In the circumstances we reject Mr Askew's alternative argument based on the transfer point. It follows that his complaint of unfair dismissal fails.