United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR D BASU (of Counsel) Messrs Kershaws Solicitors 160 Brompton Road Knightsbridge London SW3 1RP
For the Respondent	MISS I SIMPER (of Counsel) The Treasury Solicitor Queen Anne's Chambers 28 Broadway London SW1H 9JS


 


JUDGE SMITH QC: This is an appeal by Mr Ray and Mr Dormer against a decision of an Industrial Tribunal, the Chairman sitting alone, held at Bedford as long ago as 28th October 1996, when the Chairman held that the applicants before him, the appellants before us, were not entitled to a declaration that the Secretary of State for Trade and Industry was liable to them in respect of their claims for arrears of pay, totalling in the case of Mr Ray some £3,000, and in the case of Mr Dormer, some £4,000.

We have had the benefit of concise and able submissions from Counsel on this appeal. The argument on this appeal turns on the proper interpretation of the Chairman's decision. The appellants had been employed by companies in the Passmore Group, they were both employed by St Albans. In 1993 St Albans became insolvent. Mr Dormer accepted an offer of suitable alternative employment with Maidstone, another company in the Group. Mr Ray accepted a similar offer of employment with Basildon, another company in the Group. Both Maidstone and Basildon became insolvent and there were separate relevant transfers under TUPE of each of those companies to Quayshelf and Priveseal respectively.

The issue before the Chairman was whether the liabilities of St Albans to the appellants for arrears of pay passed down the line.

As a matter of law it is agreed by Counsel on both sides that that could only have occurred if the moves made by the appellants from St Albans to Maidstone and Basildon respectively, were themselves as a consequence of relevant transfers under TUPE. Thus for the claims against the Secretary of State to fail, the Chairman would have to have found, as a matter mixed law and fact, that there were then such relevant transfers.

It is the submission of Counsel for the appellants that on a fair reading of the decision he made no such finding. On the contrary, so it is submitted by Counsel for the appellants, what he found was that there was continuity of employment on change of employer when the two appellants became re-employed by associated employers within the same Group. Such findings, so it is submitted, amounted to an implicit rejection of the submission that was made to him by the solicitor then appearing for the Secretary of State, that there had been, in the case of each appellant, relevant TUPE transfers. Accordingly, he submitted, that we should allow the appeal and substitute a finding that the Secretary of State was liable.

Alternatively, he submitted that there certainly was not a finding by the Chairman that the transfer in each case was a relevant transfer under TUPE, so that such a finding could possibly be understood by the losing parties as representing the reason why he had lost. So as a second string to his bow, he submitted that at least the appeal should be allowed and the cases should be remitted to an Industrial Tribunal for a further hearing on this point.

Counsel for the respondent, on the other hand, submitted that it was implicit from the Chairman's decision that he was finding that there had been relevant transfers under TUPE when the appellants moved from St Albans to Maidstone and Basildon respectively. She reminded us that we should not construe the decision of the Industrial Tribunal like a statute and referred us to the Court of Appeal decision of Martin v MBS Fastenings (Glynwed) Distribution Ltd [1983] IRLR 198, where the Court of Appeal emphasised that the Employment Appeal Tribunal must accept an Industrial Tribunal's findings of fact unless they are perverse, and that it was only necessary that the reasons of the Industrial Tribunal should show expressly or by implication what the Industrial Tribunal's conclusions were on questions of law. Counsel for the respondent pointed to the fact that there was some documentation before the Industrial Tribunal, particularly the document at page 16 of the bundle, which was consistent with initial TUPE transfers, and that there was a finding in the case of Mr Ray that he was doing the same job with the same machinery. These matters, combined with the conclusion of the Chairman that the liabilities in dispute were transferred to Quayshelf and Priveseal require us, as the Employment Appeal Tribunal, to conclude that the Chairman was finding implicitly that there had been transfers under TUPE between St Albans and Maidstone and St Albans and Basildon.

Alternatively, she submitted that the matter must go back to the Industrial Tribunal in order for them to reach a finding on the matter of the first transfers, since it had clearly been submitted to the Chairman that there had been such relevant transfers under TUPE, and on this hypothesis, he has not reached a finding one way or the other with regard to that issue.

In our unanimous judgment and on a fair reading of the Chairman's decision, it cannot be said that he was finding that the moves to Maidstone and Basildon from St Albans constituted relevant transfers under TUPE. In our judgment, it is plain from the findings under subparagraph (a) under the heading "Mr Dormer", that the Chairman was simply finding that there had been continuity of employment on change of employing company within the same Group. Exactly the same goes for the findings he made under subparagraph (a) relating to Mr Ray. We consider that this is made even clearer by paragraph 3 of the conclusions where the Chairman concludes that both appellants had continuity of employment as a result of the moves within the Passmore Group. These findings both of fact and by way of conclusion are, in our judgment, in the sharpest possible contrast to the findings made by the Chairman concerning the transfers from Maidstone and Basildon to Quayshelf and Priveseal respectively, where the Chairman expressly and clearly finds that there were relevant transfers under TUPE. In our judgment it is as plain as can be that the Chairman was founding his conclusion that liability passed to those companies on the erroneous basis of his findings:

(a) that there was continuity of employment within the Group; and

(b) a relevant transfer out of the Group under TUPE.

In our judgment this is the only sensible construction which can be placed upon his decision read as a whole. Had he been intending to find that the appellants' moves within the Passmore Group were relevant transfers under TUPE, we are confident that he would most certainly have said so in terms.

In our judgment, accordingly, the most difficult issue on this appeal is whether the Chairman by his findings relating to continuity must by necessary implication be taken to have rejected the submissions made to him, that the initial moves within group were relevant transfers under TUPE. In our judgment, at the end of the day, we cannot definitely so conclude that he was so deciding. We consider that the most probable explanation is that the Chairman had believed that the finding of continuity of employment between associated employers within the Group was enough in itself to effect a transfer of liabilities from St Albans to Maidstone and Basildon and thus that he did not have to address his mind to the question of whether or not there had been initial relevant transfers under TUPE. In fact, that was the crucial enquiry which he had to make, since only if there had been, would the liabilities for the arrears of pay pass down the line.

We are satisfied, therefore, that the findings of the Chairman, properly construed, do, with respect to him, disclose an error of law in what is a technical area of employment law.

Both sides now maintain diametrically opposed views as to whether there were or were not relevant transfers within TUPE arising from the appellants' moves within the Group.

Although we very much regret the delay and further costs to be incurred, in our judgment, the appeal must be allowed and the resolution of this issue must be remitted to an Industrial Tribunal. [We will hear argument about where it goes in a moment.] There must be a direction that the Industrial Tribunal should consider and decide the question as to whether the arrangements made in 1993 between St Albans and Maidstone and Basildon were relevant transfers within TUPE, so as to transfer the liabilities of St Albans to the appellants under their contracts of employment for arrears of pay to those two companies pursuant to Regulation 5(2)(a) of TUPE. So that we allow the appeal on that basis.

Our provisional view is that the case should be remitted to a fresh full tribunal, consisting of Chairman and members, and that that tribunal should consider this issue. We think that it would be the fairest course to both sides, in effect, for the matter to be considered afresh, by a fresh tribunal since there is obviously a risk that the Chairman might not wish to consider the matter again having reached the conclusion he has and in the way he has. It would be better, in our judgment, on the face of it, for a fresh tribunal consisting of a Chairman and lay members to consider that issue.

[Submission on behalf of the respondent and then submissions on behalf of the appellants.]

We have considered this matter, and we are grateful for the submissions. We will remit it to a fresh Industrial Tribunal. It is no criticism whatsoever of the Chairman, we make that clear. We think it better for all concerned that it should be considered afresh by a full tribunal constituted in the usual way. We remit it to them to decide that one issue which we hope we have defined sufficiently clearly in our judgment. If there is any difficulty about that, no doubt the parties will have leave to apply, but I hope that the issue had been sufficiently clearly defined by the judgment.