United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	No appearance or representation by or on behalf of the Appellant


 


MR JUSTICE LINDSAY (PRESIDENT)

1. This is a preliminary hearing of the appeal of Wills Legacy & Law Ltd in proceedings which were brought by Mrs Macbeath and Mrs Williams against two Respondents, the First Respondent, J H D Associates, and the Second Respondent, Wills Legacy & Law.
2. We should mention that at various points Mrs Macbeath becomes Mrs Macbeth and sometimes the women are described as Ms and sometimes as Mrs, but those doubts apart, the position is today that this is a preliminary hearing, ex-parte of course, on behalf of Wills Legacy & Law and no one appears for Wills Legacy & Law; we have a letter that says, on their writing paper from a Mr Bryant that says:

"I am unable to attend todays appeal hearing due to illness in my family.

I have already submitted my skeleton arguments, which were to form the basis of my appeal."

We have that letter and we take it from that letter that Wills Legacy & Law Ltd are content that we proceed with the matter in the absence of any representation, but paying attention to the Skeleton.

3. The history of the matter is as follows: on 16 February 2000 Mrs Macbeath launched an IT1 against "J M D Associates" for "lieu of notice; holiday pay". She had worked for J H D Associates only a short time, from 11 May 1999 to 3 December 1999, and she claimed that she had worked full time for J H D, only from 11 October 1999. She said:

"I was told on 3 December 1999, along with a number of others, that the company J H D Associates no longer existed and from date the company was to be known as Wills Legacy & Law. We were then told that the new company could not afford to keep all staff and we were duly finished. I received wages for the hours worked but no lieu of notice. I was actually given no notice"

So, that was Mrs Macbeath's claim.

4. On 1 March 2000 an IT1 was presented by Mrs Williams, this time against Wills Legacy & Law. She had worked for that company from 1 September 1999 to 3 December, so she claimed. She claimed breach of contract and unlawful deduction from wages, and what she said in her IT1 was:

"1 I was employed from 1 September 1999 to the 3 December 1999 as a Will Writer formerly by J H D Associates and until my dismissal on 3 December 1999 by Wills, Legacy and Law who took over the business .

2 I was made redundant on 3 December 1999 and received two weeks pay owing. I was not entitled to a redundancy payment, since I did not have the qualifying service."

5. At some point the two separate proceedings of Mrs Macbeath and Mrs Williams were consolidated. We have not seen an Order for consolidation but it obviously took effect in that way. There was an IT3 from Wills Legacy & Law as to Mrs Williams's claim saying she had never been employed by Wills Legacy & Law; there was no IT3 from J H D Associates.
6. On 25 July there was a hearing at the Tribunal at Leicester before Mr P.G Pollett, sitting alone. No one appeared for either Respondent. On 10 August, the decision was sent to the parties; the unanimous decision of the Tribunal was that:

"Mrs Macbeath is entitled to £187.50 gross, being one weeks pay in lieu of notice.

Mrs Williams is entitled to:

i) £224.50 gross, being one week's pay in lieu of notice.

ii) Increase in hourly rate of £11.25.

iii) £165 gross holiday pay.

iv) £30 unpaid bonus.

All such payments, to both applicants, are payable by Willis Legacy & Law, the Second respondents."

7. On 30 August the Employment Appeal Tribunal received a Notice of Appeal from Wills Legacy & Law and four grounds are summarised, the third and fourth of which were:

"3 There was no transfer of undertaking; Wills Legacy & Law was started by some of those made redundant when JHD ceased.

4 Mrs Macbeath and Mrs Williams have never been employed by Wills Legacy & Law"

8. On 10 October, Mr Clough, on behalf of Wills Legacy & Law, swore an affidavit. It said:

"Details given by the applicant regarding wages are not correct.

We intend to resist the application on the following grounds:

Mrs MacBeath has never worked for Wills Legacy & Law Partnership or Wills Legacy & Law Limited.

The Partnership was only formed on the 6^th December 1999. All bank and PAYE records support this fact."

On 12 October Mr Clough said that he only found out about the cases and their hearing too late to attend at the hearings.

9. On 23 November Mr Clough asserted that Wills Legacy & Law never employed either Mrs MacBeath or Mrs Williams, and as I mentioned, we have a Skeleton Argument of 23 November. We bear that in mind. Now, it is one thing to say that Wills Legacy & Law never employed these two women but Mr Clough might not have in mind the Acquired Rights Directive and its spawn: the Transfer of Undertakings (Protection of Employment) Regulations 1981 and it is necessary to make a brief reference to those: paragraph 3(1):

"(1) Subject to the provision of these Regulations, these Regulations apply to a transfer from one person to another of an undertaking situated immediately before the transfer in the United Kingdom, or of part of one, which is so situated.

(2) Subject as aforesaid, these Regulations so apply whether the transfer is effected by sale or by some other disposition or by operation of law."

Regulation 5.1 says:

"5 (1) [Except where objection is made under paragraph (4A) below], a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor in the undertaking or part transferred but any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee.

(2) Without prejudice to paragraph (1) above, [but subject to paragraph (4A) below,] on the completion of a relevant transfer -

(a) all the transferor's rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this Regulation to the transferee; and

(b) anything done before the transfer is completed by or in relation to the transferor in respect of that contract or a person employed in that undertaking or part shall be deemed to have been done by or in relation to the transferee."

And at paragraph 8(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."

And then in paragraph 8(2) there is a special case of:

" economic, technical or organisational reasons"

10. So the position is that the old common law position, in which the transfer of the business from one to the other would have automatically terminated the contract that an employee had with the transferor and would not have led to the position in which the employee became the employee of the transferee, no longer applies. There has been considerable overlay of provision, as those paragraphs indicate.
11. With that in mind, we revert to the Tribunal's decision and what they say in their paragraph 6 is:

"However, in addition to the fact that there was a director who was a director of both of the companies the new company took over all the equipment of the old company. They had the same field consultants, there was a transfer of the office and office equipment from one to the other, the transfer of the database from one to the other and Mrs Macbeath's employment continued exactly in the same way until she left. Document 3 of the bundle is a reference for Mrs Macbeath, on Wills Legacy & Law paper stating that she had worked with them since May 1999.

7. I find on that evidence that there was a transfer of the business from JHD Associates to Wills Legacy & Law and the effect of regulation 5 of the Transfer of Undertakings Regulations is that the transferee company Wills Legacy & Law take over all the liabilities of the transferor company at the time of the transfer. One of those liabilities is an obligation to pay, an employee proper notice. JHD Associates did not do that in the case of Mrs Macbeath and I find that she is entitled to a payment in lieu of notice which by virtue of the transfer become the responsibility of the transferee, Wills Legacy & Law. This is so whether in fact transfer was effected on Friday 3 December 1999 or Monday 6 July because it was an obligation on the transferee by virtue of the transfer."

And at their paragraph 14, they say:

"Again as in the case of Mrs Williams I am satisfied that Wills Legacy & Law took over the assets of the former business of JHD Associates and whether this was on Friday 3 December 1999 or Monday 6 December 1999 the effect of that transfer of the undertaking carrying on the same business as had been carried on before, the effect of that under the Transfer regulations 5 is that the pre-existing liabilities of the transferor pass to the transferee Wills Legacy & Law and, therefore, these payments are due in both the applicant's cases from Wills Legacy & Law, transferee."

12. So far as we can see no arguable error of law there emerges. If, had only Wills Legacy & Law had turned up at the hearing below and made argument to the contrary, they might have succeeded, but they have no one but themselves to blame for not having turned up. It is not said that Wills Legacy & Law had not received Notice of the Employment Tribunal hearing, and it must be remembered that Wills Legacy & Law actually put in an IT3 from Overton House, which is the address that had been given for communication with them. If Wills Legacy & Law has changed its address, it was incumbent upon it to advise the Employment Tribunal that that was the case because otherwise service would continue to be appropriate on the Overton House address, and that would suffice as good service - see Employment Tribunal Rule 3(1)(a) and Employment Tribunal Rule 20 (3)(c)(i). So if it did not learn in sufficient time of the hearing, then as we have said, it had no one to blame but itself.
13. The Employment Tribunal naturally rules upon what is laid in front of it at the hearing and if Wills Legacy & Law did not put an argument before the Tribunal, the Tribunal could hardly be criticised for not dealing with it.
14. We have been unable to find any error of law in relation to the material that was laid before the Tribunal and accordingly we dismiss the appeal even at this preliminary stage.