At the Tribunal | |
Before
THE HONOURABLE MR JUSTICE LINDSAY (PRESIDENT)
MR J C SHRIGLEY
MR A D TUFFIN CBE
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
Revised
For the Appellants | THE APPELLANTS NEITHER PRESENT NOR REPRESENTED |
For the Respondents | MR T NEWTON (Consultant) |
MR JUSTICE LINDSAY (PRESIDENT): We have before us the appeal of Flairmark Limited in the matter (1) Mr K Allen (2) Mr T J Halliday (3) Mrs V Halliday v Flairmark Limited. There was hearing on 12th February 1999 before an Employment Tribunal sitting at Newcastle-upon-Tyne under the Chairmanship of Mr J D Myers sitting with Mr R Keating and Mr R Smith. The decision, with extended reasons, was promulgated on 4th March 1999. The unanimous decision of the tribunal was that:
" all applicants are qualified to bring unfair dismissal claims. "
"The Respondents purchased Meadridge Ltd on 19 May 1998 when the Applicant became an employee with duties of administrative assistant."
That was how Flairmark described their employee in Mrs Halliday's case. In Mr Halliday's case they used the same beginning but ended up in respect of him that "he became an employee with the duties of General Manager". In Mr Allen's case, again the beginning was the same but there they said "became an employee with the duties of Production Manager". So at that stage Flairmark itself was averring that each applicant was its employee or had been its employee. But in each case there was added that the applicant "has insufficient service with the Respondents to bring a claim for unfair dismissal." That raised, of course, a preliminary issue and a preliminary hearing was arranged at the Employment Tribunal to deal with the one question, namely:
"whether the applicants have sufficient continuity of employment as employees to bring a claim for unfair dismissal against the respondent".
The qualifying period relevant to dismissal in September 1998 was, at that time, two years.
"2 However, today, during the course of the hearing, the respondents alleged that in fact Flairmark Ltd is not the proper respondent, rather it should be Meadridge Limited. To that extent therefore they say that these applications against them are misconceived and any applications for amendment to add Meadridge Ltd in each case are out of time and if such applications be made they should be rejected."
"3 Mr Newton made the application that we the Employment Tribunal, among other things, give leave to the applicants to add Meadridge Limited as second respondent and to reserve upon them all appropriate amendments to the applications."
6 all three of the applicants, Mr Allen and the husband and wife, Mr and Mrs Halliday, were employed by a company called Durham Counters Ltd. There is no doubt that the applicants, all three, were employed by Durham Counters Limited."
There seems to have been no dispute but that those contracts with Durham Counters Limited began in 1995. That is the first stage in the chronology. The second is that there had been a CVA as to Durham Counters Limited which failed "in or about 17 April 1998." That appears from correspondence with the Insolvency Service. That is the second stage in the chronology. The third stage is, as found by the Employment Tribunal in their paragraph 7:
"Meadridge Limited took over, we find on balance of probabilities, the economic entity that was Durham Counters Limited. The only thing that changed was the presence of Meadridge Limited. If they had put a sign over the door to that effect, nobody would have known any real difference because the same work went on, the same 30 staff plus directors were continuing to work at producing the same products with the same machinery etc as before. The reality is that there was an independent economic activity transferred and it was transferred from Durham Counters Ltd to Meadridge Limited. We do not think we need to go into the various reported cases that have been cited to us, whether it's the case of Ny Molle KRO [1989] IRLR page 37 or Spijkers [1986] 2 Common Market Law Reports 296 or anything else for that matter. We are quite satisfied that the evidence is plain, what was transferred was an definite, definable, economic concern which continued at all times and did not change. It was transferred and we so find."
Although the tribunal did not, in terms, mention that there had been a relevant transfer for the purposes of TUPE, it is manifest that that was what they held had occurred. So that in ordinary course the employees of Durham Counters Limited would automatically have become employees of Meadridge. That is the third stage in the chronology. The fourth is that Flairmark bought all the shares in Meadridge Limited in April or May 1998. What the tribunal says is this:
"8 Shortly thereafter, meaning towards the end of April 1998 or beginning of May 1998, (it matters not precisely), there was then an acquisition of Meadridge Limited's issued share capital by Flairmark Limited. There is an agreement produced whereby the respondents on 19 May 1998 are acquiring [the] share capital of Meadridge Limited the employers of the three applicants. Share transfers are not covered and do not relate to the Transfer of Undertakings Regulations at all. What happened however after the share capital acquisition by Flairmark was that the three applicants continued to work in the same business of Meadridge Limited making the same goods, from the same place, with the same technical skills until eventually they were dismissed. "
That fourth stage was the acquisition by Flairmark of the total issued share capital of Meadridge Limited. The next stage is that on 6th August 1998 Durham Counters Limited went into compulsory liquidation. That appears from correspondence with the Insolvency Service. On 22nd September 1998 one arrives at the date of the alleged dismissals. That is the sequence of fact as found by the Employment Tribunal and is discernible from the papers, which we have.
"We purchased the shares of Meadridge Ltd from Mr Ken Allen and Mr Terry Halliday on the 19th May 1998. Mr Allen and Mr Halliday resigned as directors at the time of the purchase. They were however re-employed as managers at Meadridge Ltd and were paid by that company. The arrangement did not work out and their employment was ended in September 1998."
" The respondents did not in plain and clear terms indicate on paper in the Appearance that they were not technically the employers of the applicants. It seems to this Tribunal that that is something they should certainly have done. They only aver that the applicants had insufficient service with them meaning Flairmark Ltd. "
"This business was then sold to FLAIRMARK LIMITED at the end of April 1998. There was a transfer of the whole of the workforce, use of the same equipment and transfer of goodwill."
"(1) That Meadridge Ltd be added as second respondent and be served with the Originating Applications of each applicant.
(2) That the applicants do amend the Originating Applications to show their case(s) against both respondents. They shall present their amended Originating Applications in 14 days from 12 February 1999 and each respondent shall enter an appearance or amended appearance within a further 14 days thereof."
"The Applicant contends that s(he) was employed by Flairmark Limited and that liability in these claims rests with that Respondent. In the alternative, liability lies with Meadridge Limited."
So the three individual applicants were now putting their case in the alternative.
"2. The First Respondent claims it did not employ the applicants at the effective date of termination and has never employed them.
3. The Second Respondent is a wholly owned subsidiary of the First Respondent and was at all material times the employer of all three applicants.
4. The Second Respondent acquired the business of Durham Counters Limited, the original employers of the applicants, in August 1998.
5. The share capital of the Second Respondent was acquired by the First Respondent on 19th May 1998 by a transfer of shares and does not come within the scope of the Transfer of Undertakings (Protection of Employment) Regulations.
6. The First Respondent denies that it is liable to the applicants as alleged or at all, and that the application against it should be dismissed."
"It seems to us quite plain, we think it really is unarguable, that the situation is and we do find that it is a fact that although the share capital was acquired the applicant's employment continued with Meadridge until Flairmark, though the fact that they had a 100% of the shares in Meadridge, exercised rights either of ownership, or acting as agents for the company dismissed the three applicants. We are quite satisfied that until they were dismissed there was continuous employment, a continuous thread, running from their starting year in Durham Counters through to Meadridge being acquired and continuing on after Meadridge was acquired."
"The unanimous decision of the Tribunal is that all applicants are qualified to bring unfair dismissal complaints."
is ambiguous because it does not say unfair dismissal claims against whom.
"(3) The hearing of all three applications is hopefully to be on 7, 8 and 9 April 1999 which is a provisionally fixed date for hearing. All parties shall notify the Employment Tribunal within 7 days ie on or before 19 February that this date is (is not) convenient. If no notification is received the dates 7, 8 and 9 April will be treated as the definitive dates of hearing.
(4) There is to be mutual discovery of documents in 21 days from today."
Save for those dates, that decision, it seems to us, should stand.
"all applicants are qualified to bring unfair dismissal claims ."
we do not set that aside so far as it relates to unfair dismissal claims as against Meadridge. But the substantive hearing should proceed from a starting point that whereas two years plus continuity has been demonstrated as against Meadridge, the question of whether Flairmark was at any material time the employer, and if it was, whether the applicants or any of them had two years plus continuity against Flairmark, are questions as yet unresolved but which are best left to be ruled upon at the substantive hearing when the facts need to be gone into.