United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	THE APPELLANTS NEITHER PRESENT NOR REPRESENTED


 


MR JUSTICE KIRKWOOD: This is a preliminary hearing of an appeal by employers from the decision of an Industrial Tribunal at Southampton on 3rd February 1998 that the employee, Mr Cartwright, had been in continuous employment by the second respondent, Tice & Son Ltd, for a period of not less than two years ending with the date of termination of his employment, so that the tribunal had jurisdiction to hear Mr Cartwright's claim for unfair dismissal.

The background to the case is that Mr Cartwright was employed by Tice & Sons Ltd, the second respondent, from August 1990 as a car valeter/driver and general handyman. The second respondent was a limited company with two shareholders, Mr G M Tice and Mr M J Tice. Each held 50% of the shares in the company and each was a director. Trading seems to have been under the names of Tice (Wimborne) and Tice (Poole). Mr Cartwright worked at Wimborne.

Early in 1996 Mr Cartwright was convicted of an offence of indecent exposure. His continued employment at Wimborne, where there were female staff, became untenable. Mr G M Tice, however, felt sorry for Mr Cartwright and wanted to help him. Mr G M Tice and Mr M J Tice also traded in partnership at Spur End Service Station. In that venture they were equal partners.

In the upshot, Mr Cartwright's employment by Tice & Son Ltd was terminated on the ground of gross misconduct. His wages were paid up and his employment ended on Friday, 26th April 1996.

In his letter of dismissal Mr Cartwright was however informed that he could then commence work at Spur End Service Station. The letter told him that that was a separate legal entity and his employment would not be continuous. Mr Cartwright began work at Spur End on the following Monday, 29th April 1996. He resigned on 4th September 1997 and made a complaint to the Industrial Tribunal of unfair dismissal which was in the context of a claim of constructive dismissal.

The Industrial Tribunal had to determine the question of continuous employment because Mr Cartwright had not been at Spur End for two years or anything like it, though he had been working in the Tice empire for more than two years. The Industrial Tribunal considered s.218(6) of the Employment Rights Act 1996 which deals with the question of continuity of employment when the employee moves to a second employer who is an associated employer of the first employer. The tribunal also considered s.231 of the 1996 Act which describes what an associated employer is. It says:

"For the purposes of this Act any two employers shall be treated as associated if-

(a) one is a company of which the other (directly or indirectly) has control ..."

So the question was whether the partnership trading as Spur End Service Station directly or indirectly had control of Tice & Sons Ltd. The Industrial Tribunal held that it did have indirect control so the employment was continuous.

The point essentially argued is that Mr G Tice and Mr M Tice were equal partners, neither having control over the other, since they might in fact disagree. Thus, it could not be said that the partnership had control over the company.

The Industrial Tribunal correctly reminded itself of the decision in Hair Colour Consultants Ltd v Mena [1984] ICR 671 which is a case that demonstrates that a 50% shareholding is not sufficient to give control of a company. Importing that principle to this case neither Mr G Tice nor Mr M Tice, standing alone and apart from the other, had control of Tice & Sons.

The tribunal made findings in paragraphs 18 and 19 of its extended reasons, which I do not need to read into this judgment, but which make clear the way in which the tribunal saw the practicalities of the arrangements relating to these various businesses.

Having considered those paragraphs in the extended reasons, it is absolutely clear to us that the question raised by this appeal is purely one of law. Can a partnership of two equal partners be said in law to have control over a company in which each of the two partners held a 50% of the shareholding? That is a limited point of law. There is nothing else in this case that we consider should go to a full hearing of it. But on that limited point alone, we allow the case to go to a full hearing. There will be a time estimate of ½ a day for that point to be argued. The case will be listed as Category C.