United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MISS E BANTON (of Counsel) Instructed by: Mr J Neckles Public Transport (Staff) Consortium 31b Mervan Road Brixton London SW2 1DP
For the Respondents	MR I MacCABE (of Counsel) Instructed by: Messrs David Wagstaff & Co Solicitors 19 The Avenue March Cambridgeshire PE15 9PS


 


MR JUSTICE LINDSAY (PRESIDENT)

1. Over some 7 days between the 4th May and the 8th September 1999 the Employment Tribunal at London (South) under the Chairmanship of Mr C.P. Baron had before it a Preliminary Hearing raised in relation to 224 applications to the Tribunal made by employees of London General Transport Services Ltd. ("LGTSL") in and around November 1997. The IT1s had all been broadly similar and claimed unlawful deduction of wages and breach of contract against LGTSL. The 224 cases had been consolidated, with Mr Lynch's case being taken as the lead case. The nature of the Applicants' claims was that their terms of employment had been unilaterally and unlawfully altered by LGTSL and that in consequence each had suffered a loss in that lower wages or salaries had been paid than should have been. On the 18th March 1998 a different Chairman had ordered a Preliminary Hearing to deal with questions which, as refined in a later hearing of the 13th January 1999, were framed as follows:-

"(a) Whether at any time between the date of incorporation of the Respondent and the 30th November 1994 there has been any transaction or series of transactions which alone or collectively is/are a relevant transfer within the Transfer of Undertakings (Protection of Employment) Regulations 1981;

(b) Whether at any time between the date of incorporation of the Respondent and the 30th November 1994 there has been any transaction or series of transactions which alone or collectively is/are covered by Council Directive 82/891/EC and/or U.K. Regulations made pursuant to that Directive;

(c) If the Directive or any such Regulations do potentially apply as a consequence of any such transaction or transactions, is the Respondent a body which is covered by some such Directive and/or Regulations?"

2. If the parties had wished to embark on whatever process would be the slowest way of resolving the litigation between them they could hardly have bettered the course they adopted. That course was, after a number of directions or other hearings, to raise, as preliminaries, questions which, whichever way they were decided, would not be and were not agreed to be determinative of the litigation and then to allow appeal against the answers received. Thus that it is in February 2001 we are still dealing with what are preliminary questions arising out of IT1s of November 1997.
3. In a long and careful decision sent to the parties on the 3rd December 1999 the Tribunal had directed that there had been a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE") and that it had occurred on the 31st March 1989 and had consisted of a transfer of part of the undertaking previously carried on London Buses Ltd. ("LBL") to LGTSL (for whom Mr Maccabe appeared both here and below). The Tribunal also decided that there had not, after the 31st March 1989, been any event or series of events which alone or together amounted to a relevant transfer within TUPE. They continued:-

"There has not any time between the date of incorporation of the Respondent and the 30th November 1994 been any transaction or series of transactions which either alone or collectively is/are covered by Council Directive 82/891/EEC and/or any U.K. Regulations made pursuant to that Directive."

4. Before the Employment Tribunal had sent out its extended reasons (but after it had indicated orally what its decision would be) the Applicants sent a Notice of Appeal to the EAT which was received on the 11th October 1999. On the 17th January 2000 the Applicants served an "Appellants' Amended Particulars of Appeal" for which leave was given on the 9^th February 2000. That was met on the 19th May 2000 by "Respondent's Amended Answer to the Amended Grounds of Appeal". The matter has proceeded on the basis of the Applicants' document of the 17th January representing a timely Notice of Appeal. On the 29th January 2001 Miss Banton (who appears for the Appellants before us and had appeared for the Applicants for part of the hearing below) lodged a comprehensive skeleton argument advancing only those parts of the "Amended Particulars of Appeal" as were identified as Grounds 1(a), 1(b), 1(c), 1(d), 3(a) and 3(b). There is no cross-appeal.

We shall take those Grounds of Appeal in turn.

Ground 1(a)

5. If we might summarise this Ground it is that there was no or no adequate evidence upon which the Employment Tribunal could have held that there was a TUPE transfer on 31st March 1989 from LBL to LTGTSL.
6. There is no doubt that the Employment Tribunal was concerned that it had heard no evidence as to consultation before any such transfer nor as to communication between Unions and their members relative to such a transfer. The Employment Tribunal was concerned, too, that there was a lack of contemporaneous legal or quasi-legal documentation; they would have expected some such and were shown none. The Tribunal speculated why that was so and reflected that it might have been that LGTSL had had difficulty in obtaining documents from LBL. Miss Banton criticises that as a speculation unsupported by any evidence and, in any event, we add that for our part we would expect LGTSL to have had its own copies of any documentation involving itself and LBL. Miss Banton contrasts the lack of documentary evidence from LGTSL with the voluminous evidence produced by the Applicants which suggests, she says, that the employer continued, after the 31^st March 1989, to be someone other than LGTSL.
7. However, we must remind ourselves of the rôle of an Appeal Tribunal which can only deal only with points of law. In Piggott Bros & Co. Ltd. -v- Jackson [1991] IRLR C.A. 309 at 312 para 17 Lord Donaldson M.R. says:-

"A finding of fact which is unsupported by any evidence clearly involves an error of law ..... What matters is whether the decision under appeal was a permissible option. To answer that question in the negative in the context of Employment Law, the EAT will almost always have to be able to identify a finding of fact unsupported by any evidence ....."

To similar effect is Eclipse Blinds Ltd. -v- Wright [1992] IRLR 133 where, in the Inner House of the Court of Session, Lord Allanbridge said at paragraph 14:-

"The thrust of the Applicants' argument to that effect was based on the submission that that Tribunal gave insufficient weight to the evidence regarding the question of consultation by the employer. In our view such an argument is misconceived. The weight to be attached to any evidence in any case is a matter for the Tribunal determining the facts. It can never be for an Appellate Tribunal, concerned only with errors of law, to take upon itself the task of deciding what weight should be attached to particular facts."

The Employment Tribunal did have evidence supporting their conclusion that there had been a transfer in March 1989. It had received the audited accounts of LGTSL. The Employment Tribunal found much useful information in them; the first accounts to the 31st March 1990 showed LGTSL had traded from the 1st April 1989, its principal activity being the provision of road passenger transport services within the Greater London area. There was reference to 650 buses operating from 6 garages. The accounts disclosed a payroll of over £34m per annum and an average number of employees at 2,324. There was no reference to a charge being payable to LBL to cover the provision of staff by LBL to LGTSL. Mr Elms, LGTSL's former Commercial Director and later its Operations Director, gave oral evidence as to buses rented by LGTSL and as to LGTSL's trading from the 1st April 1989. There was evidence of LGTSL operating bus routes formally operated by LBL without the routes having changed in any material way. There was evidence of an Operators' Licence being granted to LGTSL from the 1st April 1989 and of LBL's surrender of its similar licence in October 1989 in respect of 5,050 vehicles. There was evidence of a change of registration with the Metropolitan Traffic Commissioner from LBL to LGTSL. On the other side, the Employment Tribunal carefully summarised the evidence from pay-slips and similar documents produced by the Applicants. The Tribunal also referred to a document headed "Notice to all staff - formation of London General as a company". They said, of a document plainly referring to LBL when saying "London Buses":-

"It states unequivocally that "[w]ith effect from the 1st April 1989 London General Transport Services Limited will trade as a limited liability company wholly owned by London Buses and Unit 4 staff currently employed by London Buses will be transferred to the new company."

The Tribunal specifically rejected evidence from the Applicants' side that the Trade Unions had not been aware of the change of employer. Notwithstanding the Tribunal's comments at the paucity of the evidence produced by the Respondent LGTSL and notwithstanding what they were able to derive from the Applicants' evidence to the contrary, they concluded in their paragraph 114 as follows:-

"However, it is clear to us that in fact the Respondent took over part of the LBL's business from the 1st April 1989. We are particularly affected by the contents of the audited accounts to which we have referred. They show that the Respondent was trading, and there is no dispute that any such trading was the running of bus services in South London. The activity of the Respondent was the same as that of LBL. The contents of the accounts are set out above and will not be repeated here. We note the facts relating to the routes taken over by the Respondent, and the granting of the Operators' Licence. The customers of the business (being the passengers that used the routes) were presumably the same on 1st April 1989 as on the 31st March. The assets involved in the business were the same, although for different periods they were "leased" from LBL or subject to similar arrangements. We find from all the evidence that the employees of that part of the business transferred to the Respondent became employed by the Respondent ...... We conclude that there was no material change in the economic entity from the 31st March to the 1st April 1989."

The Tribunal also summarised evidence from which they concluded that management had recognised there had been a change in the identity of the employer from the 1st April 1989.

8. It is not for us to reflect on the credibility of evidence nor as to its sufficiency. Those are matters for the Employment Tribunal. Whether we would have decided that there had been a transfer or not is neither here nor there. If, as we should, we ask ourselves whether there was any evidence for the Tribunal's conclusion that there had been a relevant transfer within the meaning of TUPE on the 31st March 1989 of part of the undertaking previously carried on by LBL, being a transfer from LBL to LGTSL, then against the background of the evidence received by the Employment Tribunal which we have summarised we could not possibly answer that there had been no such supporting evidence. Miss Banton complains that Mr Elms was allowed to recant in relation to an earlier statement given by him at a previous Tribunal hearing. But the Tribunal knew that he was doing so; they expressly referred to his conclusion that his earlier evidence had been wrong. His credibility is not a matter for this Appeal Tribunal.
9. As for whether such a transfer was a relevant transfer for the purposes of TUPE, the Tribunal had the 1981 Regulations in front of it and a number of cases including Spijkers -v- Gebroeders Benedik Abattoir C.V. Case 24/85 ECJ [1986] ECR 1119 were cited to them as also was the then-recent case of ECM (Vehicle Delivery Service) -v- Cox [1999] IRLR 559 C.A.. In this part of her case Miss Banton's complaint is as to the facts; she does not suggest that the Tribunal misdirected itself as to the law on what, for the purposes of TUPE, is to be taken as a relevant transfer.

In our judgment Ground 1 (a) of the Notice of Appeal fails.

Ground 1 (b)

10. The argument here is this: the London Regional Transport Act 1984 provides a statutory machinery for transfers, including transfers of assets and routes. Any transfer other than by way of a statutory Scheme by a body such as LBL, which was within the range of those bodies regulated by that Act, would have been an impermissible attempt to escape the terms of the Act and therefore either did not take place, being unlawful and therefore a nullity, or (possibly) was voidable and avoided. As to this argument the Employment Tribunal said:-

"We have noted that a statutory scheme could have been made under either sections 5 (1) or 9 (6) of the 1984 Act to transfer the economic entity known as Wandle District from LBL to the Respondent, and it appears that there was no such scheme. However, we cannot find anything in the 1984 Act which precludes the events which have occurred from occurring. We are not aware of any provision to the effect that a transfer has to be effected by a Scheme under the Act."

Miss Banton accepts that there is no provision in the Act that there should be no form of disposal or transfer by LBL other than by way of a scheme under the Act. It is easy to accept that there is no such provision; it would be hard to contemplate Parliament requiring that a disposal such as the sale of, say, second-hand LBL buses should require a Scheme, still less, perhaps, the sending to the scrapyard of worn out ones. Once Miss Banton had accepted that there was no prohibition in the Act as to transfers or disposals other than by way of statutory scheme, we raised with her the question of whether she was arguing that every form of transfer or disposal not expressly authorised by the Act had to be taken to be forbidden by it. We were surprised that that was, indeed, her case. We must reject it; that is not the law. We find the Employment Tribunal's answer to the point to be devoid of error.

11. The cases cited by Miss Banton - Cheney -v- Conn [1968] 1 All E.R. 779 and Prince of Hanover -v- Attorney-General [1957] 1 All E.R. 49 are, with respect, nothing to the point. The former (speaking of a time before the European Court of Justice acquired its present rôle) said that a statute could not be unlawful as what a statute provided was itself the law. No-one is doubting that the 1984 Act is the law but that, in our view, is no reason to read it as including a prohibition which it does not contain. The latter case emphasises that a Court or Tribunal, in order to discover the true intention of Parliament, should pay regard to the whole of the Act in question and its legal context. No-one could doubt that but that does not enable a Court or Tribunal to suppose the existence of a prohibition which is not present especially where, had Parliament intended it, it would have been the work of only a few words to provide it.
12. There had been transfers by way of statutory schemes in 1993 and Miss Banton argued, here and below, that if a transfer had taken place in 1989, as LGTSL were arguing, then the 1993 transfers would have been entirely otiose. The Employment Tribunal dealt with this argument. It looked carefully at the Schemes of 1993. It was implicit, it held, in one of them that LGTSL was already providing bus services. The Employment Tribunal noted that the contracts of employment which were transferred in 1993 were those in respect of contracts for persons not already employed by LGTSL. The 1993 General Transfer Scheme recognised, said the Employment Tribunal, that LGTSL was already providing bus services and employing staff. The Tribunal said:-

"We conclude therefore that it is inherent from the wording of both the 1993 General Transfer Scheme and the 1993 Bus Asset Transfer Scheme that prior to that date the Respondent was in the business of operating bus services. We further conclude that they did not have the effect urged on us by Miss Banton."

13. The Tribunal well knew both that not all assets used by LBL in the relevant Wandle District had been transferred in 1989 and that there were transfers of plant, equipment, and of bus ownership later than 1989 - see their paragraph 115. But later transfers of ownership do not of themselves preclude an earlier TUPE transfer as that does not necessarily require a transfer of ownership. If it could have been shown by the Appellants that the 1993 Schemes were unequivocally transferring to LGTSL from LBL that which, on LGTSL's argument, had already been plainly transferred in 1989, we would have been receptive to an argument that cast doubt on the Tribunal's reasoning. But that was not shown to us and there is, of course, nothing about a transfer of something in 1993 which disproves the transfer of something else in 1989.
14. Moreover, the Tribunal implicitly made the point in its paragraph 127 that one can have what is for TUPE purposes a transfer of a part of an undertaking (for example by one body allowing assets to be used by another) yet where ownership of the assets in question is only transferred later or, indeed, not at all. It is no necessary part of a TUPE transfer that assets, tangible or intangible, should have passed from transferor to transferee - see, for example, ECM supra to which the Employment Tribunal was referred. Accordingly an argument that some rights or liabilities could be seen to be transferred in 1993 does not exclude there having been a TUPE transfer in 1989.

Ground 1 (b) fails.

Ground 1 (c)

15. The Appellants' argument here is in two parts; firstly that the Employment Tribunal failed to apply the correct test in determining whether there had been a transfer of undertakings within TUPE and, secondly, that the Tribunal's conclusion that there had been one in 1989 flew in the face of the evidence.
16. As for the right test having been applied, as we have mentioned, the Employment Tribunal had had relevant authorities cited to it, including, inter alios, Spijkers supra and Suzen -v- Zehnacker - Case C - 13/95 ECJ [1997] 662. It turned to the meaning of a transfer of undertakings in its paragraph 111 where it cited a passage from Spijkers as follows:-

"(11)...... It follows that the decisive criterion for establishing whether there is a transfer is whether the business in question retains its identity. (12) Consequently, a transfer of an undertaking, business or part of a business does not occur merely because its assets are disposed of. Instead it is necessary to consider, ...., whether the business was disposed of as a going concern, as would be indicated, inter alia, by the fact that its operation was actually continued or resumed by the new employer, with the same or similar activities. (13) In order to determine whether those conditions are met, it is necessary to consider all the facts characterising the transaction in question, including the type of undertaking or business, whether or not the business's tangible assets, such as buildings and movable property, are transferred, the value of its intangible assets at the time of the transfer, whether or not the majority of its employees are taken over by the new employer, whether or not its customers are transferred and the degree of similarity between the activities carried on before and after the transfer and the period, if any, for which those activities were suspended. It should be noted, however, that all those circumstances are merely single factors in the overall assessment which must be made and cannot therefore be considered in isolation."

The Employment Tribunal continued in its paragraph 114 (as we have already cited) as follows:-

"However, it is clear to us that in fact the Respondent took-over part of LBL's business from 1st April 1989. We are particularly affected by the contents of the audited accounts to which we have referred. They show that the Respondent was trading, and there is no dispute that any such trading was the running of bus services in South London. The activity of the Respondent was the same as that of LBL."

A little later they added:-

"We find from all the evidence that the employees of that part of the business transferred to the Respondent became employed by the Respondent."

In the Tribunal's paragraph 127 they said:-

"As already stated, we are satisfied that there was a relevant transfer on the 31st March 1989 from LBL to the Respondent of part of the undertaking of LBL. From that date on, from the evidence produced to us it is apparent the undertaking was under the effective control of the Respondent. There was no evidence of any interference or practical control by LBL."

The Tribunal below was plainly satisfied that as between LBL and LGTSL in March 1989 a situation was created, in which, to use the language of Spijkers supra, the operation of the former was (as to a relevant part) actually continued by the new employer with the same or similar activities. We do not accept that the Tribunal applied the wrong test.

17. As for the Tribunal's conclusion flying in the face of the evidence, the Tribunal carefully examined the Applicants' evidence. Referring to those who had represented the Applicants below, the Tribunal said:-

"Much play was made by Mr Ibekwe and Miss Banton about the various miscellaneous employment documentation to which we have referred, and the alleged fact that employees were not told of, let alone consulted about, the transfer. We are not persuaded that any of that documentation which may indicate that the Respondent was not the employer of any of the employees mentioned in the period before the 3rd November 1994 is sufficient to counteract the evidence the other way."

The Tribunal specifically accepted Mr Elms' evidence. It was for the Employment Tribunal to assess which evidence to prefer and what weight to be given to the various elements within the evidence. We reject the Appellants' Ground 1 (c).

Ground 1 (d)

18. Here Miss Banton argues (if we have followed her correctly) that even if the London Regional Transport Act 1984 contains no prohibition of transfers made otherwise than by statutory Scheme (which she denies) then in any event any transfer has to be by way of such a scheme as otherwise employees would be deprived of the benefit of EC Directive 77/187 and the Act would have been circumvented.
19. As for the circumvention of the Act, we have already ruled that the Tribunal did not err in law in holding that the Act contained no prohibition of transfers otherwise than by Scheme. No circumvention of the Act thus arises.
20. As for deprivation of the benefit of the Directive, the protection which the Directive gives is on the occasion of a transfer of an undertaking or part of an undertaking - Article 1 (1) (a). That there has been such a transfer is not in issue; LGTSL so argue, as do the Appellants. What is in issue is the date and content of the transfer.
21. If the transfer was, as the Employment Tribunal held, on the 31st March 1989 and not after that date, employees will have the protection appropriate to that transfer and nothing in the Employment Tribunal's answer to the questions put before it as preliminary issues can deny employees the protection which is appropriate to that transfer. That may and, no doubt, will deny employees the protection that would have been appropriate had some other and later transfer been made but to deny them that protection is only to deny them that to which, for want of there being a later transfer, they were found not to be entitled.
22. Miss Banton referred us to Collino and Schiappero -v- Telecom Italia SPA [2000] IRLR 788 ECJ, a case in which the respondent had sought to argue that under the special provisions of Italian law as to transfer from a public law body to a private law body which, the respondent there argued, regulated that case, there had been no transfer of an undertaking within the Directive. The ECJ held that the Directive did apply to all transfers. No corresponding argument was raised here or in the Tribunal below and we fail to see the relevance of Collino. Miss Banton seeks also to rely on Marleasing SA -v- La Comercial Internacional de Alimentacion SA - Case 106/89 ECJ. The case is authority for the proposition that in applying its National law a National Court called upon to interpret that National law should, as far as possible, do so in the light of the wording and the purpose of the Directive and in order to achieve the results pursued by the Directive. But there is nothing in Marleasing that authorises or requires us to read into the London Regional Transport Act 1984 a prohibition which is not there.

We detect no error of law on the Tribunal's part under heading Ground 1 (d).

Ground 3 (a)

23. Here Miss Banton argues, by reference to Smith -v- Secretary of State for Trade and Industry [2000] IRLR 6, that by reason of the rôle of the Secretary of State in the appointment and the cesser of membership of Lay Members of the Employment Tribunal and in fixing their pay and the terms under which they serve, that Tribunal is not independent and impartial within the provisions of Article 6. But in Smith the Secretary of State was a party and in any event the case did not conclude that the Employment Tribunal had failed to comply with Article 6 even in such a case. The case at hand, as Mr Maccabe urges, and as we accept, is nothing at all to do with the Secretary of State. Finding herself in difficulties in that part of her argument, Miss Banton then surprised us for a second time by saying that she was, indeed, asserting actual personal bias on the part of the Chairman or Members of the Employment Tribunal. However no affidavit had been filed on the point, as would have been required under the Employment Appeal Tribunal's Practice Direction had only the allegation been made earlier as, if to be made at all, it should have been. We reject Ground 3 (a).

Ground 3 (b)

24. This Ground concerns the alleged paucity of evidence in support of LGTSL's submissions, the willingness of the Employment Tribunal to speculate as to why that was so, their willingness to explain that paucity away and a complaint as to the declining of witness orders and orders for discovery or otherwise in favour of the Appellants in their search, during or ahead of the hearing below, for evidence.
25. As we have already mentioned, matters of facts and of evidence are (broadly speaking) the province of the Tribunal below and only of that Tribunal. There had been no appeal against any of the refusals to grant relief in respect of discovery or witness orders or otherwise as would arguably have improved the Appellants' case. In effect, the Appellants took the tactical decision to go ahead with the case as it was. The Tribunal concluded as it did despite their concern as to the poverty of LGTSL's evidence in some areas; that poverty was plainly in mind as it was expressly referred to. There is, in our judgment, no error of law (and we emphasise it is only with errors of law that we can deal) in this part of the Appellants' case. Ground 3 (b) fails.

Grounds 2 (a) and (b)

26. Miss Banton's skeleton argument omitted these Grounds altogether but it transpired that she did not wish to abandon them. Both rely on Directive 82/891 "Concerning the division of public limited companies". She did not take us to any of the provisions of the Directive nor to any cases or comments upon it, nor was any argument developed in relation to it. We have no reason to detect any error of law in the Employment Tribunal's view, at its paragraphs 107 and 108, that it is nothing to do with the case at hand, see also Hillman and Others -v- LGTSL (unreported) EAT/498/97.

Conclusion

27. We have now dealt with all the Grounds open to the Appellants. None has found favour, for the reasons we have given. We dismiss the appeal.