United Kingdom Employment Appeal Tribunal

APPEARANCES

 

Appellant	Neither present or presented


 


MR JUSTICE MORISON (PRESIDENT): The purpose of this hearing is to determine whether there is an arguable point of law to be raised in an appeal which Mitre Foods Ltd wish to make against the unanimous decision of an Industrial Tribunal held at Manchester on 4 March 1998.

There were three Applicants who had presented complaints to the effect that they wish to claim redundancy payments and that there had been unlawful deductions from the pay in relation to holiday pay.

The Tribunal concluded that the Applicants were entitled to claims for redundancy payment from Mitre Foods Ltd and awarded monies set out in their judgment including payments in lieu of notice.

The issue of substance before the Industrial Tribunal was whether the Applicants had sufficient continuity of service with Mitre Foods to entitle them to bring their complaints. They had been employed by Mitre Foods since about the 6 November 1995 and they were dismissed in September 1997 with less than two years' service with Mitre Foods. However, the Applicants claimed that in 1995 there had been a transfer of the business in which they were employed to Mitre Foods and accordingly their service with the predecessor company counted for the purposes of calculating continuity of employment.

The Tribunal found the following facts. The Applicants began work for Sceptre Sweets Limited, whom we will call Sceptre, which is a company engaged in the manufacture of confectionery. On or about the 2 November 1995, Sceptre ceased trading. Sceptre's directors had been Mr Hinnighan and his wife, Mrs Hinnighan and a J Brindle. The plant and machinery belonging to Sceptre was sold to a new company Mitre; Mr Hinnighan was a director of Mitre as was Mrs Hinnighan and Mitre began trading on 6 November 1997.

The employees were given no P45s. Although apparently documents were sent to the revenue by Sceptre or Mitre, they received no redundancy payment, no notice of termination of their employment and no formal notification that their new employer was Mitre. They were provided with no contract of employment or any letter of appointment, either when they started with Sceptre or at any later stage.

They finished their work on the 2 November and commenced work again at the same place, using the same equipment doing the same work on 6 November. Their finishing time on 2 November was the end of their normal working week as at that time they were working a four day week.

The Tribunal expressed itself satisfied that the Applicants were given no formal notification of a change of employment. They accepted the evidence of one of the Applicants that as a van driver he continued to sell and deliver goods to the same customers as he had been doing when he was working for Sceptre. The Tribunal indicated that Mitre obtained new contracts with new customers which expanded the business and that all three of the Applicants became more flexible in the duties which they performed when working for Mitre. The Tribunal also found that when the change over between Sceptre and Mitre occurred, no redundancy payment was made to the workforce and that all the workforce of Sceptre were then taken on by Mitre.

Under those circumstances, the Industrial Tribunal having directed itself to the relevant statutory provisions, namely the Transfer of Undertakings (Protection of Employment) Regulations 1981 and to various cases decided by the European Court of Justice concluded that there was a transfer of an undertaking. They expressed themselves as being satisfied by the evidence of the Applicants that they returned to the same premises, carried out much the same production using the same materials for the same customers. That Tribunal accepts that the evidence of their duties gradually changed and that the range of products expanded as a result of the change of ownership, also that new customers were obtained. However, it rejects the evidence provided by Mr Hinnighan from his accountant that this was merely a transfer of plant and equipment. Any break was due to their hours of work, not because of a change of ownership, the lease of the premises was transferred from Mr Hinnighan and Sceptre to Mr Hinnighan and Mitre. It is clear to this Tribunal that on a Spijkers criteria, a transfer of the undertaking took place and that the Applicants therefore have continuity of service. They then said that they were entitled to a redundancy payment and to claim a much larger sum as payment in lieu of notice, but their claim for holiday pay was rejected. On that basis they made their various awards.

A Notice of Appeal was filed in this case and has been accompanied by a skeleton argument dated 14 October 1998. The substance of the contention put forward on this appeal is that Mitre did not buy Sceptre's business, it merely bought some of the fixed assets of Sceptre. There was no payment for good will, that there was a change of duties of the employees, when they became employed by Mitre, the customers were substantially different and therefore the Tribunal ought to have concluded that there was no transfer of a business.

In effect it seems to us, that that is a submission that the Tribunal's decision was perverse on that issue. They also submit that the perception of the employees as to whether there had been a transfer, was not relevant and therefore the Tribunal had misdirected itself in law. In their skeleton argument, they referred to a number of cases which had been decided some time ago and well before the European Court of Justice had given further assistance in interpretation of the acquired rights directive which was a directive from prompting the making of the transfer regulations to which I have referred.

It seems to us that there is no arguable point of law in this case. In a careful and well reasoned decision the Industrial Tribunal has explained exactly why it came to the conclusion that there was a transfer of an undertaking. It is not necessary having regard to the Spijkers' decision and the facts in that case for there to be a transfer of a business as a going concern. In the Spijkers' case there was no going concern because the slaughterhouse business, in the hands of the transferor, had come to an end through insolvency. Nonetheless the European Court of Justice was prepared to conclude that it was open to a finding that there was a transfer of that slaughterhouse business to the transferee when the employees went and started work doing exactly the same work as they had been before, in the same premises, using the same equipment.

The analogy is a good one with this case and the Industrial Tribunal was not only not arguably wrong, they were in our judgment obviously right to have concluded that there was a transfer of a business. As to the alleged misdirection, we do not understand how that contention has been made. To some extent whether employees do or do not transfer is a relevant question but is not determinative of the issue and their perception that they were simply continuing on as before is one of those relevant factors. The case law to which reference was drawn has been as I have indicated somewhat superceded by the later decisions of the European Court of Justice. It seems to us that therefore there is no merit whatever in the appeal which has been lodged in this case and we dismiss it as it is not reasonably arguable.