United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	THE APPELLANT NEITHER PRESENT NOR REPRESENTED
For the 1st and 2nd Respondents	NEITHER RESPONDENTS BEING PRESENT NOR REPRESENTED


 


JUDGE HARGROVE QC: This matter came before us on 27th November, and on that occasion orders were made, first to allow the Forest Hill Constitutional Club not to attend today. We required Mr Burchell to confirm within seven days that he would attend today and in default the appeal would stand dismissed. In fact Mr Burchell provided the Court with the reason for his failure to attend on the last occasion which was ill-health. Unfortunately, he has not appeared today either. That places us in something of a dilemma.

We have carefully considered what are the correct steps to take. One can dismiss an appeal for want of prosecution. We were sorely tempted to take that step. On balance, however, we have decided that we should regard the appeal upon the basis of the matters which have been forward by the parties, and in particular, the amended grounds of appeal.

Mrs Collins was employed by Clean Business Ltd as a cleaner. She cleaned the Forest Hill Constitutional Club and apparently other places. Her employment ceased on 6th November 1995. She was employed on a seven day week. Difficulties had arisen about the standards of cleaning in the Club, possibly due to the fact that Mrs Collins was away at times. The Club decided that they would go other contractors. On 21st October 1995 the Club decided that they would terminate the contract with Clean Business because of the standards of cleaning and also their letter of complaint had been unanswered.

The appellant had sent the Club earlier in the year an advertising mailshot and that was the way in which the Club came to be in contact with Bright Sights. Bright Sights was asked to quote for same work as had previously been done by Clean Business. The quote was successful. The Club terminated the contract with Clean Business giving four weeks notice but not requiring the notice to be worked out. On 27th October the Club and the appellant entered into a contract to do the cleaning work. On 30th October Mrs Collins was told by the Club to clear the premises of her materials and that she would no longer be required. The appellant began work at the Club from 6th November 1995.

The Industrial Tribunal found that the work at the Club was a separate contract of employment for Mrs Collins. The tribunal also found that the employment was terminated because of a transfer of an undertaking and therefore the dismissal was automatically unfair. It is said that the contract of employment was automatically transferred to Bright Sights.

The question is a short one. Was there a transfer of an undertaking? Ones first reaction is that it is a question of fact for the tribunal. However, the test to be applied has been under consideration in Betts & Others v Brintel Helicopters & KLM ERA Helicopters (UK) Ltd [1997] IRLR 361. The Court of Appeal held that there was no difference between first and second generation transfers. In both cases the undertaking in the alleged transferor must be identified and then it must be determined whether the undertaking retained its identity in the hands of the alleged transferee. In other words, one has to look for an economic entity and that cannot be reduced to a search only for the activity entailed.

It is interesting to note that in the holding to Betts at page 361 this passage occurs:

"In determining whether there has been a transfer of an undertaking, there is a distinction between labour-intensive undertakings, such as hospital cleaning in Dines v Initial Health Care Services, in which the court may conclude that the undertaking has been transferred if the staff combine to engage in a particular activity which continues or is resumed with substantially the same staff after the alleged transfer so that it retains its identity in the hands of the transferee, and other types of undertaking in relation to which application of the test laid down by the European Court of Justice in Spijkers involves a more wide-ranging inquiry."

In this case it is plain that there was only an activity being carried on by Clean Business Ltd. Even more powerful is the argument against there having been no transfer. There was no transfer of assets, no transfer of goodwill, no transfer of even cleaning materials and machinery. It was a different firm employing different staff. Put shortly, the only similarities between the worker of Clean Business Ltd and Bright Sights was that they were competitors and in succession cleaned the same premises.

The Industrial Tribunal were at a disadvantage. The relevant part of the decision occurs at paragraphs 8 and 9 which read as follows:

"8. Having decided that, we go onto the merits of this case. What is beyond doubt is that the Applicant has lost her job. Her job has come to an end. We acknowledge that she carried out other cleaning duties for Clean Business but that is not unusual with cleaners and we treat her job working at the Constitutional Club as a separate contract of employment. There was a business being carried on by Clean Business Ltd of cleaning the Club. As of 31 October that business ceased. It transferred on 6 November to Bright Sights. That new contract was entered into prior to the termination of the Applicant's employment. We are satisfied that the business transferred. The work that was done before 31 October or the duties required to be done before 31 October, were identical to the duties required to be done after 6 November. In our view, there can be no other interpretation put on this other than the Applicant's employment was terminated because of the transfer. The evidence we have heard clearly indicates that in our view therefore, because of that, the dismissal is automatically unfair and the Applicant is therefore entitled to compensation.

9. Our decision is that the contract of employment automatically transferred to Bright Sights. The involvement of the Forest Road Constitutional Club was only a temporary measure and in our view the contract of employment at no stage transferred to them and the application against them is dismissed."

At that time Betts had not been reported. In Schmidt v Spar und Leihkasse der früheren Ämter Bordesholm, Kiel und Cronshagen [1994] IRLR 302 the European Court of Justice put the matter in this way:

"The decisive criterion for establishing whether there is a transfer for the purpose of the Directive is whether the business in question retains its identity. This is indicated, inter alia, by the actual continuation or resumption by the new employer of the same or similar activities."

However, that case was succeeded first by Süzen v Zehnacker Gebäudereinigung GmbH [1997] IRLR 255, again of the European Court of Justice, which as Kennedy LJ said represented a shift of emphasis, or at least a clarification. We have no doubt that the tribunal would have reached the conclusion had the Betts and Süzen cases been available, that there was in fact no transfer of the undertaking in any way.

Accordingly, this appeal is allowed.