United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR J BOWERS (of Counsel) Messrs Steele & Co Solicitors 2 The Norwich Business Park Whiting Road Norwich NR4 6DJ
For the Respondents	MISS J EADY (of Counsel) Messrs Birketts Solicitors 24-26 Museum Street Ipswich IP1 1HZ


 


MR JUSTICE BELL: This is an appeal by Mr Brian Morris against an Industrial Tribunal's dismissal of his complaint of unfair dismissal by John Grose Group Limited. The Industrial Tribunal was held at Norwich on 19 March 1997 and its Decision was entered in the Register on 8 April 1997.

The facts found by the Tribunal in its Extended Reasons were as follows:

"1. The applicant was a Service Manager for Mereside Motor Company Ltd from March 1978 until his dismissal by reason of redundancy on 30 September 1996.

2. The receivers were called in on 27 September 1996 and the applicant was selected for redundancy. The decision to make him redundant was made on that day.

3. On 30 September 1996 he was made redundant.

4. The reasons for making him redundant were primarily to slim down the workforce, such that the company could keep trading, in order to make it more attractive as a going concern in due course. It was of prime importance to the receivers that the company was able to continue trading because the alternative was to cease trading which would not necessarily have been in the interests of the creditors.

5. The Ford Motor Company, which was the franchiser in this case, was informed of the receivership, contacted John Grose Group Ltd whose representatives in the form of Mr Raywood and Mr Starling attended on 30 September 1996.

6. We are satisfied that John Grose Group Ltd knew nothing of the receivership as at 27 September 1996 and had no knowledge whatsoever of the redundancy decisions that were made on that day.

7. John Grose Group Ltd entered into negotiations in October with the receivers and a deal was eventually struck on 5 November 1996. "

The Tribunal found some further facts as part of its conclusions and reasoning in paragraph 9 which read:

"We are satisfied that, interpreting Regulation 8(1) of the Transfer of Undertakings Regulations, significance should be attached to the use of 'the' transfer. Where, as in the present case, the employee had been dismissed before any offer had been made for the business, even though the dismissal can be said to be for 'a' reason connected with the possible transfer of the business, it is not by reason of 'the' transfer, or for a reason connected with 'the' transfer. Although Mr Justice Morison, giving the judgment of the Employment Appeal Tribunal in the Ibex case, said on the facts of that case that the transfer was a mere twinkle in the eye and might never have occurred, we do not go that far. The receivers in this case certainly had in mind the possibility of a transfer and clearly hoped in the motor trade that the Ford Motor Company would be able to come up with a possible purchaser. We are also mindful of the fact that the John Grose Group Ltd became interested and attended for initial negotiations on the day that the redundancies took effect which, to some extent, separates the facts of our case from the Ibex Trading Company case. However, we are satisfied that the reason for the redundancies was not in connection with the transfer of the business, although the possibility of the transfer was clearly in the mind of the receivers at the time."

We take the words which we have quoted from paragraph 9, taken all together and with the findings at 2 above, to mean that the Tribunal found that at the time when Mr Morris was made redundant on 30 September, the receivers not only had in mind the possibility of a transfer of the undertaking to someone, but specifically the possibility of a transfer to John Grose, although the Tribunal was satisfied that the reason for the redundancies was not in connection with the transfer of the business to John Grose. The Decision is not as clear as it might be on this point, but the last words which we have quoted refer to "the possibility of the transfer" (our emphasis) in a paragraph which has already stressed the Tribunal's view of the importance of the definite article, and they do so after pointing out that John Grose attended for initial negotiations on the day that the redundancies took effect. We do not have the Chairman's notes of evidence, but the Receiver's Grounds for Resisting the Application state that the redundancies were discussed with Mereside's Managing Director on the afternoon of Friday 27 September; that all staff who had been selected for redundancy were asked to attend a meeting on the morning of Monday, 30 September, at which they were made redundant; and that at 11.30 am the same day the Receivers had an initial meeting with Ford representatives who introduced John Grose. In those circumstances it would be unlikely, to say the least, that the receivers would be unaware of John Grose's possible interest at the time of the dismissals. We have no basis for assuming that the receivers knew of a John Grose interest on the 27 September, when the decision to make Mr Morris redundant was made. There was certainly no finding of fact to this effect. Indeed there was a finding that John Grose itself knew nothing of the receivership as at 27 September 1996.

On 24 December 1996 Mr Morris made his Originating Application to the Industrial Tribunal claiming unfair dismissal and unlawful deduction of wages, unpaid holiday and notice pay.

He made Mereside the first Respondent to his claims and John Grose the second. He claimed that both Mereside as transferor of the undertaking, and John Grose as transferee, were liable in respect of his "automatic unfair dismissal" by the operation of regulations 5 and 8(1) of the Transfer of Undertakings (Protection of Employment) Regulations 1981. Alternatively, he claimed actual unfair dismissal by Mereside.

The Industrial Tribunal first considered whether John Grose might be liable to Mr Morris by the operation of the Regulations, and decided that it was not. It dismissed John Grose from the proceedings. It went on to find that Mr Morris had been unfairly dismissed by Mereside and that he was due monies and damages for breach of contract from Mereside. This was not, however, as satisfactory a conclusion from Mr Morris's point of view as success against John Grose would have been, so he brought this appeal to challenge the decision in favour of John Grose.

Regulation 5 of the 1981 Regulations renders the transferee under a relevant transfer liable for unfair dismissal or contractual claims in respect of a person employed "immediately before the transfer" but, in order to give effect to the purpose of the Regulations and EC Directive 77/187/EEC which led to the Regulations, those words are to be construed to include persons who would have been so employed had they not been dismissed unfairly before the transfer for a reason connected with the transfer: see Litster v. Forth Dry Dock Ltd [1989] ICR 341.

Article 4 of the Directive provides:

"1 The transfer of an undertaking, business or part of a business shall not in itself constitute grounds for dismissal by the transferor or the transferee. This provision shall not stand in the way of dismissals that may take place for economic, technical or organisational reasons entailing changes in the workforce.

2 If the contract of employment relationship is terminated because the transfer within the meaning of Article 1(1) involves a substantial change in working conditions to the detriment of the employee, the employer shall be regarded as having been responsible for termination of the contract of employment or of the employment relationship."

To meet this, Regulation 8 provides:

" (1) Where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee shall be treated for the purposes of Part V of the 1978 Act and Articles 20 to 41 of the 1976 Order (unfair dismissal) as unfairly dismissed if the transfer or a reason connected with it is the reason or principal reason for his dismissal.

(2) Where an economic, technical or organisational reason entailing changes in the workforce of either the transferor or transferee before or after a relevant transfer is the reason or principal reason for dismissing an employee -

(a) paragraph (1) above shall not apply to his dismissal ... "

It follows that, so far as Mr Morris's claim against John Grose was concerned, the Industrial Tribunal had to decide whether Regulation 8(1) applied to the circumstances of Mr Morris's case, subject to any effect of Regulation 8(2). Only if it did so apply, would it have to consider the possible effect of Regulation 8(2). The Tribunal decided that on a proper construction of Regulation of 8(1) alone, it did not apply to Mr Morris's case, so it did not go on to judge the possible effect of Regulation 8(2).

The Tribunal's reasoning in paragraph 9 led it to the conclusion that the transferee company, John Grose, was not at any stage deemed to be the employer of the applicant and that no liability attached to it.

Mr John Bowers, on behalf of Mr Morris, firstly argued that on a proper interpretation of what Morison J. said in Ibex Trading Co Ltd v.Walton [1994] I.C.R. 907, Mr Morris should have succeeded in his case against John Grose, subject to any effect of Regulation 8(2).

Secondly, Mr Bowers argued that if that contention did not persuade us, the judgment in Ibex, so far as it applied to the proper interpretation of Regulation 8(1), was wrong. It is not necessary, he contended, for a particular transfer or a particular transferee to be in the transferor's mind at the time of the dismissal, for Regulation 8(1) to bite on that transferee.

Thirdly, Mr Bowers argued that the Tribunal's finding that Mr Morris's dismissal was not in connection with the particular transfer to John Grose was perverse, and that any gap between the dismissal and the commencement of the process of the transfer was de minimis.

Fourthly, Mr Bowers contended that if regulation 8(1) did bite on John Grose, subject to regulation 8(2), then regulation 8(2) did not help John Grose on the facts of Mr Morris's case.

Finally, Mr Bowers' skeleton argument suggested that the Industrial Tribunal failed to give proper, clear reasons for its decision.

Ms Jennifer Eady, on behalf of John Grose, met Mr Bowers points and, in particular, argued that the judgment in Ibex, as it applied to Regulation 8(1), was correct, and that it was correctly applied to the facts of Mr Morris's case by the Tribunal, whose reasoning was clear, on substantive findings of fact. We should follow Ibex as the Tribunal did.

We were referred to a number of authorities in the course of argument, and it is convenient to set out the most material references before any further consideration of the points which counsel made.

In Litster v. Forth Dry Dock Ltd [1990] I A.C. 546, receivers of the transferor company agreed to sell the business assets to the transferee and one hour before the transfer took place the workforce was told by the receivers that the business was to close down and that they were dismissed with immediate effect. The facts were, therefore, far from the facts of this case. The real question was the meaning of the words "immediately before the transfer" in regulation 5(3), and the case proceeded on the basis that the dismissals were by reason of or for a reason connected with the particular transfer. However, Mr Bowers relied upon what was said in that case about the purpose of the regulations.

At page 559 F-H Lord Oliver said:

"The broad scope of the Directive appears from the following two recitals:

"Whereas economic trends are bringing in their wake, at both national and community level, changes in the structure of undertakings, businesses or parts of businesses to other employers as a result of legal transfers or mergers;

"Whereas it is necessary to provide for the protection of employees in the event of a change of employer, in particular, to ensure that their rights are safeguarded; ..."

Lord Oliver then referred to various articles of the Directive and to various of the Regulations, including regulations 5 and 8(1), before saying at pages 562F to 563C:

" It will be seen that, as it is to be expected, the scope and purpose of both the Directive and the Regulations are the same, that is, to ensure that on any transfer of an undertaking or part of an undertaking, the employment of the existing workers in the undertaking is preserved or, if their employment terminates solely by reason of the transfer, that their rights arising out of that determination are effectively safeguarded. It may, I think, be assumed that those who drafted both the Directive and the Regulations were sufficiently acquainted with the realities of life to appreciate that a frequent - indeed, possibly, the most frequent - occasion upon which a business or part of a business is transferred is when the original employer is insolvent, so that an employee whose employment is terminated on the transfer will have no effective remedy for unfair dismissal unless it is capable of being exerted against the transferee. It can hardly have been contemplated that, where the only reason for determination of the employment is the transfer of the undertaking or the relevant part of it, the parties to the transfer would be at liberty to avoid the manifest purpose of the Directive by the simple expedient of wrongfully dismissing the workforce a few minutes before the completion of the transfer. The European Court of Justice has expressed, in the clearest terms, the opinion that so transparent a device would not avoid the operation of the Directive, and if the effect of the Regulations is that under the law of the United Kingdom it has that effect, then your Lordships are compelled to conclude that the Regulations are gravely defective and the Government of the United Kingdom has failed to comply with its mandatory obligations under the Directive. If your Lordships are in fact compelled to that conclusion, so be it; but it is not, I venture to think, a conclusion which any of your Lordships would willingly embrace in the absence of the most compulsive context rendering any other conclusion impossible."

In Harrison Bowden Ltd v. Bowden [1994] I.C.R. 186, administrative receivers of the transferor company were appointed in January 1991. On 29 January they advertised the sale of the business as a going concern. The following day the company's alter ego expressed an interest in acquiring the business. On 31 January the majority of the workforce, including the applicant, was dismissed by the receivers. Between 4 and 8 February, when the sale of the business to the transferee employers was completed, the applicant went in to work to enable the business to be handed over as a going concern, and on 11 February the applicant was offered permanent employment. On 12 March 1991 he was dismissed. On his complaint of unfair dismissal an Industrial Tribunal found, on a preliminary issue as to jurisdiction, that the applicant's dismissal on 31 January 1991 was directly connected with the transfer of the business and that his continuity of employment was preserved by regulation 5 of the Transfer of Undertakings (Protection of Employment) Regulations 1981, so that he had the necessary qualifying period of two years' continuous employment.

The employers appealed contending that the Industrial Tribunal had erred in finding that there was an unfair dismissal under regulation 8(1).

In the judgment of the appeal tribunal at pages 190F to 191F, Tuckey J. said:

"Mr Jennings submits that the approach was incorrect because, he says, it is only in a case where there is a prospective transferee that regulation 8 has effect. Where the situation is, as here, that there are a number of possible transferees and no individual transferee has been identified or come forward, then regulation 8(1) of the Regulations of 1981 has no application. He relies in support of that submission on the definite article in regulation 8(1) that is to say 'the transfer' so, he says, there must be a transfer in existence or at least a prospective transferee and one cannot get round that construction by reference to the following words that is to say a reason connected with 'it' because 'it' refers back to 'the transfer' identified earlier in the regulation.

This construction of the regulation, he argues, was not followed by the tribunal because they merely asked themselves whether the dismissal was connected with the transfer to a 'proposed or possible' buyer and not, as they should have asked themselves, whether it was connected with the transfer to Mr. Harrison. They could not have answered that question in favour of the applicant, because at the time he was dismissed Mr.Harrison had done no more than say to Mr Gibson that he wanted to know more about the prospective sale of the business.

We have considered those submissions carefully. We are bound to say that, if the construction contended for by Mr Jennings is correct, it would open a loophole in this legislation which presumes continuity of employment and attempts to ensure the protection of workers when undertakings are transferred. There is also a conceptual difficulty in distinguishing between a prospective transferee and the actual transferee. Why should it make any difference if there is one front runner at the point of dismissal who is then perhaps, as the example was put to us, gazumped by another one but in the meantime the employees have been dismissed? If their dismissal was connected with the transfer one would expect this legislation to protect them.

We do not therefore accept the construction contended for by Mr.Jennings. We think that the reference to "the transfer" is a reference to a transfer which actually takes place which these Regulations contemplate by the definition of "the relevant transfer." Regulation 8(1) is directed to the situation both before and after such a transfer. We cannot see that it is of importance that the transferee has been identified at or before the moment of dismissal. P.Bork International A/S v. Forenginen af Arbejdsledere I Danmark (Case 101/87) [1988] E.C.R. 3071, the decision of the European Court of Justice which prompted and informed the decision of the House of Lords in Litster v. Forth Dry Dock & Engineering Co. Ltd. [1989] ICR 341, suggests that the approach in considering cases such as these is to look back in time to see what actually happened. In that case there was no question of the transferee being identified at the moment of dismissal and yet it was a case in which the workers concerned were protected by the Directive."

The facts in Ibex Trading Co.Ltd (In administration) v. Walton and Others [1994] I.C.R. 907, to which the tribunal in the present case referred, were that administrators were appointed to the transferor company in August 1991. They sought to reduce the size and wages of the workforce prior to selling the business. On 16 October 1991 those employees of the transferor who refused to accept the new terms were sent letters of dismissal to take effect on 4 November 1991. On 11 November 1991, an offer to purchase the business was made and negotiations culminated in a sale to the transferee on 13 February 1992. On complaints of unfair dismissal made by dismissed employees against both the transferor and transferee, an industrial tribunal found that, though the principal reason for the dismissals was the need to make the business more economic for a prospective purchaser and that was a reason connected with a relevant transfer within the meaning of regulation 8(1) of the Transfer of Undertakings (Protection of Employment) Regulations 1981, the dismissals were not automatically unfair, since the reason was an economic one within the meaning of regulation 8(2). But the tribunal went on to find that the dismissals were unfair in that the transferor had acted unreasonably within the meaning of section 57(3) of the Employment Protection (Consolidation) Act 1978 and, further, that the employees were not employed immediately before the transfer for the purposes of regulation 5, so that liability for the dismissals remained with the transferor.

The transferor appealed and its appeal failed on the basis that the finding of unfairness under the 1978 Act was clear and obvious and that liability for the dismissals were not transferred to the transferee. The Employment Appeal Tribunal held that the dismissals were not automatically unfair by the operation of regulation 8(1).

Giving the judgment of the Appeal Tribunal, Morison J. said at pages 914F -H:

"Contrary to what was said in Harrison Bowden Ltd v. Bowden [1994] I.C.R. 186, we attach significance to the definite article in regulation 8(1) 'that employee shall be treated .... as unfairly dismissed if the transfer or a reason connected with it is the reason or principal reason for his dismissal.' The link, in terms of time, between the dismissals and the transfers will vary considerably. In Litster v. Forth Dry Dock & Engineering Co.Ltd [1989] ICR 341 the time difference was one hour; often it will be more. A transfer is not just a single event: it extends over a period of time culminating in a completion. However, here, the employees were dismissed before any offer had been made for the business. Whilst it could properly be said that they were dismissed for a reason connected with a possible transfer of the business, on the facts here we are not satisfied that they were dismissed by reason of the transfer. A transfer was, at the stage of the dismissal, a mere twinkle in the eye and might well never have occurred. We do not say that in every case it is necessary for the prospective transferee to be identified; because sometimes one purchaser drops out at the last minute and another purchaser replaces him."

On that ground and on the further ground that the employees were not employed in the undertaking immediately before the transfer adopting the Litster test, the Appeal Tribunal held that regulation 8(1) did not apply to render the dismissals automatically unfair.

In Michael Peters Ltd v. (1) Farnfield and (2) Michael Peters Group plc. [1995] I.R.L.R. 190, Mr Farnfield, the applicant for unfair dismissal, was chief executive of a group holding company. The hearings before the Industrial Tribunal and the Employment Appeal Tribunal largely turned upon whether there was a transfer of the parent company's business rather than just that of certain of its subsidiaries, but the question of whether Mr Farfield's dismissal was unfair by reason of regulation 8(1) also arose.

The material facts on that issue were set out by Tucker J., giving the judgment of the Appeal Tribunal at page 191, paragraphs 6 and 7, as follows:

"By March 1990 a company referred to as CLK showed an interest in purchasing the group. Nothing came of it at that stage and another company then emerged as an interested purchaser. The group encountered financial difficulties, and on 22 August receivers were appointed to the group and on the following day to its subsidiaries. On that day (23 August) there was a brief meeting between CLK and the receivers and on 24 August CLK made an offer to purchase the group and one of the four companies. On 25 August the receivers indicated that there would be redundancies, and on 26 August they told the respondent that he would be made redundant. They sent him a letter of dismissal the following day, 27 August.

It is important to observe that at that time there had been no acceptable offer to purchase the four companies. The offer was made by CLK on 28 August and the deal was concluded with them on 30 August. The Industrial Tribunal found that at the time the respondent was dismissed there were other potential transferees. There was evidence before them that a number of other companies were interested in making a bid. CLK's offer had not been accepted, and a fresh offer was not made until after the respondent was dismissed. The Tribunal found that the receivers were looking for a sale of firstly the whole group, and later part of the group, and that that sale which in law was a transfer, took place, albeit the transferee was not identified until after the respondent had been dismissed."

At paragraphs 10 to 12, Tucker J. said:

" The Tribunal found that the principal reason for the respondent's dismissal was connected with the transfer because in order to achieve it, it was deemed necessary to reduce the number of staff employed by the group. They therefore found that the principal reason for the dismissal was the offer itself rather than by reason of any secondary consequential restructuring arising from the decision to effect the transfer.

The submission of Mr Elias Q.C. on behalf of the appellants is that on the findings of fact which they made, the Tribunal erred in law in reaching their conclusion. He submits that the crucial point is that the Tribunal found that the respondent was responsible for the running of the group - he had a group role - and that the respondent was not allocated or assigned to the part of the undertaking which was transferred. Mr Elias relies upon the facts that the group was not party to the agreement to sell, that at the time of the dismissal no transfer had taken place, and there were a number of interested purchasers.

In our opinion Mr Elias is correct in submitting that in order to succeed in establishing that the appellants are liable for his dismissal, the respondent has to prove the following matters .... That he was dismissed by reason of the transfer."

At page 192. paragraphs 24 and 25 Tucker J. dealt with that matter as follows:

"Was the respondent dismissed by reason of the transfer? In our opinion he clearly was. The Tribunal were correct in finding that the probable reason for his dismissal was connected with the transfer because in order to achieve the transfer it was deemed necessary to reduce the number of staff employed by the group.

Much attention has been focused on the use of the definite article in the latter part of reg.8(1). We see no significance in this. It is no more than a reference back to the words 'a relevant transfer' in the earlier part of the regulation. It has been held by the EAT in Harrison Bowden Ltd v. Bowden [1994] I.C.R. 186 that it is not necessary for the actual transferee to have been identified at or before the moment of dismissal, and Mr Elias concedes that it is not necessary for an actual contract to be in place - it can be projected. In our opinion, the later decision in Ibex Trading Co. Ltd. v. Walton and others [1994] I.R.L.R. 564 is not inconsistent with Bowden."

In Parmar v. Ferranti International PLC (In Administrative Receivership) (1997), [EAT 710/96 Unreported], the applicant was employed by Ferranti. Receivers were appointed on 30 November 1993. The applicant was one of a large number of employees whom the receivers dismissed with immediate effect on 10 December 1993. The Applicant presented a complaint of unfair dismissal naming Ferranti and the receivers as the respondents. Some time later he found that the part of the Ferranti business in which he had worked had been transferred on 31 October 1994 by the receivers to a company subsequently called Technologies. In the course of proceedings before the Employment Appeal Tribunal, Technologies were joined as a respondent and the applicant argued that he had shown an arguable case that he was employed in that part of Ferranti's business which was transferred to technologies, immediately before the transfer, and that his dismissal was by reason of that transfer.

The applicants referred the Appeal Tribunal to Harrison Bowden. Mr Bowers, appearing for the respondents referred the Appeal Tribunal to Ibex, and submitted that there was no conflict between Harrison Bowden and Ibex as was held in Michael Peters Ltd, or that if there was a conflict the Appeal Tribunal should follow the later decision in Ibex on the principle expounded by Mummery J. in Crosville Wates Ltd v. Stracey [EAT/578/93 Unreported] at papers 11G - 12D.

At page 8A-B of the transcript in Parmar, His Honour Judge Peter Clark, giving the judgment of the Appeal Tribunal, concluded:

" ... the prospective claim against Technologies is almost bound to fail. The time gap between dismissal on 10th December 1993 and the acquisition of the components business at the earliest on 31st October 1994 is inconsistent with the transfer being the reason for the dismissal, following the approach of Employment Appeal Tribunal in Ibex, as we consider we should."

In Crosville Wales Ltd the Employment Appeals Tribunal was faced with two conflicting decisions of the Employment Appeals Tribunal on whether a particular consideration could be taken into account in assessing compensation for unfair dismissal. The later of two cases, TNT Express (UK) Ltd, was itself the subject of appeal to the Court of Appeal when Crosville Wales Ltd was heard. At pages 11G-12D of the transcript in Crosville Wales Ltd, Mummery J. said:

" No useful purpose would be served by hearing full argument on which of the two conflicting authorities should be followed. It appeared from Mr Bowers' skeleton argument that considerable time would be spent on hearing submissions as to why he contended that TNT Express was wrongly decided. This might include looking at Parliamentary debates on the relevant provisions. The Tribunal concluded that, in view of the pending appeal to the Court of Appeal, no sensible purpose would be served by further judicial debate at this level of decision. The basis of the general rule laid down in Colchester Estates (Cardiff) v. Carlton Industries Plc ... was that, at the level of decision where the conflict occurs, there must be an end of debate in the interests of certainty. Hence the general rule that the matter is treated as settled at first instance by the more recent decision. A further decision of the EAT will not eliminate the uncertainty. That will continue to exist until a ruling from the Court of Appeal. A decision on this hearing not to follow TNT Express would add to confusion on the legal position. We therefore propose that the appeal of Crosville Wales should be decided on the basis that the TNT Express decision correctly represents the law until the Court of Appeal rules to the contrary. The appeal of Crosville Wales will, therefore, be allowed with leave to appeal to cover the event that the EAT decision in TNT Express is reversed."

In Secretary of State for Trade & Industry v. Cook and others [1997] 150 at page 151, paragraph 3, Morison J. said:

"The EAT is not bound by its previous decisions, although they will only be departed from in exceptional circumstances, or where there are previous inconsistent decisions."

We return to the present case, and start with the wording of regulation 8(1).

In order for regulation 8(1) to apply at all there must have been a relevant transfer which, of course means that the identity of the transferee, the date of the transfer and the terms of the actual transfer have all been decided by the time that the matter comes before an Industrial Tribunal.

In our view, however, the words "the transfer" towards the end of regulation 8(1) do not by necessary construction have to refer to the relevant particular transfer which has actually taken place. If that was the necessary meaning of regulation 8(1) it could have been made quite clear by the use of words such as "that transfer" or "the particular transfer". Although "the" is described as a definite article, it is not always used as such in ordinary English, and in our view the words "the transfer", as they are used in regulation 8(1), could perfectly well mean "transfer" or "a transfer".

In our judgment this view of the meaning of regulation 8(1) is more consistent with the broad scope of the Directive.

Moreover, to decide otherwise would lead to quite unfair anomalies, as the Appeal Tribunal in Harrison Bowden pointed out. Why, for instance, should employees who are dismissed by reason of a particular anticipated transfer which does not go through but which is promptly replaced by another comparable transfer in circumstances where a transfer to someone was inevitable, not have the benefit of regulation 8(1), subject to regulation 8(2), when they would have had that protection if the original transfer had gone through? Yet this would be the result of a restrictive construction of "the transfer" in regulation 8(1).

To construe regulation 8(1) in the way in which we do will not, in our view open the floodgate of automatic unfair dismissal in any case where dismissal has in fact preceded a transfer, as Ms Eady submitted. Transfer or a reason connected with it must still be the reason or principle reason for dismissal for regulation 8(1) to apply, and a Tribunal is unlikely to find that requirement proved if there are dismissals so that an undertaking can continue in operation when a transfer is no more than a remote possibility. In any event we see nothing incongruous or inconsistent with the purpose of the Directive and Regulations in a large proportion of dismissals before a transfer being caught by regulation 8(1), subject to regulation 8(2): quite the reverse in our view.

We, therefore, prefer what was said about the definite article in Harrison Bowden to what was said in Ibex, although we note that the judgment in the latter case contemplated it not being necessary for the prospective transferee to be identified at the time of the dismissal, and one purchaser taking the place of another for regulation 8(1) to apply. The judgment appears to contemplate one purchaser taking the place of another, which amounts to one transfer taking the place of another, but regulation 8(1) still applying.

Despite what was said in Crosville Wales and Parmar about the binding effect of the more recent of conflicting cases at the same level, we consider that we are at liberty to disagree with what was said about the definite article in Ibex, in the light of what was said about previous inconsistent decisions in Cook.

It follows that in our view the Industrial Tribunal erred in law in attaching the significance which it did to the definite article in this case. Does that impugn its eventual decision and, if so, what order should we make upon this appeal?

We cannot accept Mr Bowers' argument that the present case can be readily distinguished from Ibex because transfer to John Grose was more than the "mere twinkle in the eye" of the relevant transfer at the time of dismissal in Ibex.

We do not accept Mr Bowers' submission that, even asking the question which it did, the Tribunal should, in all good sense, have come to the conclusion that a reason connected with the transfer to John Grose was the reason for Mr Morris's dismissal. Even if one concentrates on a reason "connected with" the transfer, one is still taken back to the question of whether Mr Morris's dismissal was by reason of a proposed transfer to John Grose rather than anyone else.

Nor do we accept Mr Bowers' submission that the Tribunal's finding that the reason for Mr Morris's dismissal was not a reason connected with the particular transfer to John Grose was perverse, any gap between the dismissal and the commencement of the beginning of the process of transferring being de minimis. Whatever may be said about the timing of events on the morning of 30 September 1996, the Tribunal had decided that the decision to dismiss Mr Morris was made on 27 September 1996, before John Grose was identified as a possible transferee.

Although we have hesitated over the true interpretation of parts of paragraph 9 of the Tribunal's decision, we believe that the reasons for the decision were made clear enough.

However, our construction of regulation 8(1) does mean that, in our judgment, the Industrial Tribunal erred in law in asking whether the transfer to John Grose, or a reason connected with transfer to John Grose, was the reason for Mr Morris's dismissal. In our judgment the Tribunal should have asked whether a transfer to any transferee who might appear, or a reason connected with such a transfer, was the reason, or principal reason for his dismissal.

We are far from confident that the Tribunal would have come to the ultimate decision which it did, if it had asked itself, as in our judgment it should have done, whether a transfer to any transferee who might appear, or a reason connected with such a transfer, was the reason or principal reason for Mr Morris's dismissal. On the contrary it appears to us that the finding that "the reasons for making him redundant were primarily to slim down the workforce, such that the company could keep trading, in order to make it more attractive as a going concern in due course", might well have led the Tribunal to conclude that a possible transfer, indeed a hoped - for transfer, was the reason or principal reason for Mr Morris's dismissal. But on reflection we cannot be confident that that would have been the Tribunal's inevitable conclusion. We do not believe that we can safely decide the issue for ourselves on the material before us.

We heard some argument relating to the meaning and possible application of regulation 8(2) to the facts of this case; but the nature of the Tribunal's decision meant that it had no need to go on to consider the possible application of regulation 8(2), and we are certainly in no position to do so.

For all these reasons, this appeal must be allowed and the question of the Second Respondent's responsibility for unfair dismissal of Mr Morris by the operation of the regulation 8(1) must be remitted to a freshly constituted tribunal for decision in accordance with the construction of regulation 8(1) set out in this judgment.