United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR C BOURNE (Of Counsel) Instructed by: Messrs Thompsons Solicitors 17 Wellington Street Leeds LS1 4DL
For the 2nd Respondent	MR A SCARGILL (Representative) National Union of Mineworkers (Yorkshire Area) 2 Huddersfield Road Barnsley S70 2LS


 


MR JUSTICE WALL

1. From 20 February 1979 until 4 June 1999, Mr Peter Aldridge and his wife Mrs Rose Shirley Aldridge (the Appellants) were respectively the superintendent and the matron of premises known as The Low Hall at Scalby near Scarborough in North Yorkshire. Their employer was Yorkshire Miners Welfare Convalescent Home (hereinafter called "The Trust").
2. On 22 August 1999 the Appellants issued forms IT1 claiming "unfair dismissal due to redundancy contrary to TUPE". Their case was that on 4 June 1999 there had been a transfer of the Trust's undertaking in relation to Low Hall to the second Respondent in the proceedings, the National Union of Miners (Yorkshire Area) (hereinafter for convenience referred to as NUM (YA)).
3. The Appellants' applications for unfair dismissal came before the Employment Tribunal sitting at Leeds on 30 March 2000, and in a decision promulgated on 20 April 2000, the Tribunal decided unanimously that there was no transfer of the Trust's undertaking at Low Hall, to the NUM (YA); that the dismissals had been fair and were for redundancy. The Appellants appeal against that decision
4. There was a third Applicant before the Tribunal, Mr Anthony Michael Scott. Mr Scott was first employed by the Trust in January 1994. He was employed at Low Hall as a chef. Low Hall was operated as a convalescent home for disabled miners who had worked in the Yorkshire Coalfields. It was opened to guests from April to October each year. Mr Scott's case was that he was employed from January/February to December, and in the weeks/months when guests were not present, he continued working on general duties in the kitchen and elsewhere in the property. In the break between seasons, Mr Scott took holidays for which he was not paid a salary or retainer. His case was that his absences from work were temporary, and due to the type of business conducted at the home. There was not enough work to go round in the closed season, but each year Mr Scott was left with the clear impression that he would be returning to Low Hall as soon as it began to prepare for the new season. This arrangement continued until June 1999.
5. On 28 May 1999, Mr Scott received a letter from the Trust effectively terminating his employment. . Mr Scott, accordingly, sought a finding from the Employment Tribunal that he had continuity of employment from 1 April 1996 with the Trust. The Tribunal duly made that finding, and as we understand it there is no appeal from it. The Trust has taken no part in this Appeal, and like the Appellants, Mr Scott's claim against NUM (YA) depends upon the existence or otherwise of the Transfer under TUPE of the Trust's undertaking at Low Hall to NUM (YA).
6. The historical background to these appeals is set out in a helpful and detailed chronology prepared by Mr Arthur Scargill, the President of NUM (YA). This discloses that Low Hall was purchased by the National Union of Mineworkers in 1926 for use as a convalescence home for Yorkshire Miners. It was originally operated by two trusts, the West Yorkshire Miners Convalescent Home and the South Yorkshire Miners Convalescent Treatment Fund. Both sent miners who had been injured at work to this and three other convalescent homes for treatment and rest.
7. On 26 April 1966, a scheme was established by the Charity Commissioners known as the Yorkshire Miners Welfare Convalescent Homes (the Trust). This scheme (the 1966 Scheme) incorporated all the former charities and was constituted subject to and in conformity with the provisions of the 1966 Scheme. Clause 23 of the 1966 Scheme provided that the trustees of the trust were to use the land and buildings in providing convalescent homes for the benefit of persons who were or had been employed in the Yorkshire division of the National Coal Board in the coal industry or in activities allied to those of the coal industry, together with their dependents.
8. On 20 March 1998 a temporary scheme was ordered by Lindsay J in the Chancery Division of the High Court. This scheme amended Clause 23 by deleting the words "employed in any of the Yorkshire areas of the Board" and by substituting the words "employed in any of the former Yorkshire areas of the National Coal Board". Clause 30 of the principal scheme was also amended to provide that the income of the charity should be applied towards defraying the cost of the upkeep and maintenance of the convalescent homes at Lynwood and Scarborough, (owned by The Trust) and Scalby (owned by the NUM (Yorkshire Area) including the cost of the care and maintenance of the beneficiaries in those homes.
9. Although the homes had initially been funded by the Coal Industry Social Welfare Organisation, this body gradually ceased to provide money to cover the costs of the convalescent homes. As a consequence, in 1971 the NUM (Yorkshire Area) consulted its members and it was agreed that its members should pay a 1p weekly levy to the Trust.
10. Mr Scargill recounts that despite this assistance, the Trust closed the home in Scarborough, and by the mid 1970s it had become obvious that unless something radical was done, the Trust could no longer support three convalescent homes. The trustees concluded that either one home would have to be closed and sold, or that an alternative arrangement should be concluded with the permission of the Charity Commissioners.
11. At the request of the Trust, discussions were held between the trustees, the NUM (Yorkshire Area) and the Charity Commissioners. An agreement was reached on 9 December 1977, which provided for Low Hall to be sold to the NUM (Yorkshire Area) for £44,000, but with an undertaking that the NUM (Yorkshire Area) would defray all the running and maintenance expenses of Low Hall – including any expenses incurred by the Trustees of the Trust in using Low Hall for the purposes of convalescence, for as long as there was in the opinion of the Trustees a need for three (our emphasis) convalescent homes.
12. These provisions were subsequently incorporated into a conveyance dated 20 April 1978, a copy of which is in our papers. The NUM (Yorkshire Area) as purchasers covenanted with the Trust that the Trust would be committed to use Low Hall for the purpose of a convalescent home "for as long as there is in the opinion of the vendors or their successors a need for three convalescent homes" (Mr Scargill's emphasis). The sale agreement and the conveyance both provided for the NUM (Yorkshire Area) as purchasers to use the Low Hall at such times of the year when the home was not in use for convalescence, or to use at any time such parts of the Low Hall and its grounds which were not being used for convalescence, in accordance with Clause 23 of the Trust deed.
13. In 1981, the Trust sold its Convalescent home at Lytham St Annes. In the light of the term of the sale agreement and the conveyance of 20 April 1978, the view of the NUM (Yorkshire Area) was that from that date it was no longer obliged to pay the capital, maintenance and revenue cost of Low Hall, for the simple reason that the Trust was only operating two homes. That construction of the 1978 conveyance was supported by Mr Justice Neuberger when the matter was before the Chancery Division in 1988.
14. Mr Scargill's case is that between 1978 and 1982 the NUM (Yorkshire Area) had expended well over £1m in capital costs relating to Low Hall, and at the same time had paid the revenue and maintenance cost of the property. Although there was no longer any obligation on the NUM (Yorkshire Area) to pay capital maintenance or revenue costs in respect of the property, it continued to pay all the running costs of the home until the end of 1988.
15. In December 1988 the Trust reached an agreement with the NUM (Yorkshire Area). This agreement provided for the Trust to cover all the running and maintenance costs for Low Hall. In return, the NUM (Yorkshire Area) agreed that union members who paid a weekly levied rent to the NUM should divert that levy to the Trust. The levy was increased from 5p to 9p per week. The weekly levy was subsequently further increased, and in 1999, the weekly levy diverted from the NUM (Yorkshire Area) to the Trust was 50p per member per week.
16. In 1998, the Trustees of the Trust acting on the advice of the Charity Commissioners decided at a meeting on 31 March that the NUM (Yorkshire Area) should be asked to provide "a written guarantee of Security of Tenure for the use of the Low Hall by the Trust Charity until the end of 1999 as minimum" The NUM (Yorkshire Area)'s response was to make Low Hall available to the Trust for convalescence (Mr Scargill's emphasis) purposes for a minimum period of five years.
17. By the beginning of 1999, it is clear that the Trust was in considerable financial difficulty in operating Low Hall as a convalescent home. One method of raising money was to offer the facilities to convalescent miners from outside the Yorkshire Area, an activity which the NUM (YA) considered unlawful. A special meeting of the Trustees was held on 30 March 1999, to discuss the various options open to the Trust, and on 26 May 1999, the Trust's secretary wrote to the NUM (Yorkshire Area) informing it that the Trustees had decided that the Trust no longer wished to use Low Hall as a convalescent home and would vacate it by Sunday 6 June 1999.
18. The letter made clear that the Trust would cease to provide convalescent home services and personnel at Low Hall as and from Sunday 6 June 1999.
19. Mr Scargill's case is that the NUM (Yorkshire Area) did not carry on with the same business or even a similar business following the Trust's withdrawal from Low Hall on 4 June 1999. The NUM (Yorkshire Area) he argued, took in commercial paying guests from outside the Yorkshire Area – as permitted by both the Trust Deed, the conveyance and the agreement between the NUM (Yorkshire Area) and the Trust. All guests at Low Hall after 4 June 1999 were, he submitted, paying commercial guests. No beneficiaries of the Trust, he said, have used any facilities at Low Hall since the date when the Trust ceased using the home. Beneficiaries of the Trust are now accommodated at Lynwood.
20. Mr Scargill argued that no evidence had been submitted naming any individual guest who was a beneficiary of the Trust, and whilst the Appellants may well have seen people who visited the home before, those who attended Low Hall after 4 June 1999 were not beneficiaries of the Trust. All guests at Low Hall after 4 June 1999 were either from outside the Yorkshire area and/or if they were from the Yorkshire area they did not meet the criteria laid down by the Trust for beneficiaries eligible for attendance for convalescence.
21. The Appellant's case on the TUPE question was that Trust beneficiaries were permitted to stay free of charge at Low Hall, and the Trust paid the NUM for those stays at an agreed rate. Non beneficiaries also stayed at Low Hall, but the Trust received payments for such visitors from the organisation which had arranged their stay, and the NUM received the same or similar payments for occupancy from the Trust. One such group of visitors came from a similar convalescent charitable trust in the North East of England under an arrangement which had been in place for the previous four years. Whoever stayed at Low Hall and whatever the financial arrangements, the Appellants looked after them during their stay.
22. After the Trust withdrew from Low Hall with effect from 4 June 1999, the Appellants' case was that guests from the North East arrived, as had been pre arranged, and were looked after by the volunteers from the NUM, not just from Yorkshire but from other areas. This arrangement was necessary because all staff had been made redundant by the Trust when they withdrew.
23. The Appellants accepted that a group of beneficiaries of the Trust who had an arrangement to attend Low Hall were transferred to the Trust's other home at Lynwood as a consequence of the Trust's withdrawal from Low Hall. Thereafter, the Appellants accept that the Trust sent no one to Low Hall to convalesce or for any other purpose.
24. What happened at Low Hall after the Appellants were made redundant and occupation of the property reverted to the NUM (YA) was plainly crucial to the issue of whether there had been a relevant transfer under TUPE. The Tribunal dealt with the matter in the following way:-

"(d) Difficulties arose between the NUM and the Trust regarding the use of the Low Hall in the latter part of 1998 and the early part of 1999. Matters came to a head in May 1999 when the Trust found itself in difficulties in that a booking had been made for miners who were not beneficiaries of the Trust to attend at the hall. In the previous 4 years when this group of miners had attended from the North East arrangements had been made directly with the Trust in relation to the cost of their attendance. However on this occasion arrangements had been made with the National Union of Mineworkers and the trustees of the Trust were concerned that they would be in breach of their charitable obligations if arrangements were not made for recovery of the cost of providing for those guests at the Hall in the period beginning in June 1999.

(e) Thus a decision was taken by the Trust that it would not be possible to continue without appropriate financial arrangements during the visit of the miners from the North East. As a result urgent arrangements were made for the staff to be made redundant at the end of May 1999 with redundancy taking effect on 4 June.

(f) At that point the NUM became aware of a Trust's plans in relation to the Low Hall and decided to call for volunteers who were to come in to assist with providing for the needs of the miners from the North East who were booked to attend on 7 June. Mr Hardman who is from Lancashire was one of those volunteers who assisted as did other local mineworkers who had completed their shifts and attended at the Low Hall to help. There was a gap of about a month, after which approximately 7 of the previous staff were re-employed by the NUM to work at the Low Hall at a date in early July 1999. Mr and Mrs Aldridge were allowed to remain in their living accommodation at the Low Hall at no charge but they were not re-employed by the NUM as superintendent and assistant and assistant superintendent after the change took place.

(g) The Trust was also faced with the difficulty in that it had arrangements for miners who were beneficiaries whom it had hoped to entertain at the Low Hall. Those miners had therefore to be relocated to the other property Lynwood and accommodated by reducing the time of their visits from 11 to 5 days.

(h) No evidence was produced in relation to the use by the Second Respondent of Low Hall after the date of the termination of the employment of the Applicants as a convalescent home. The only direct evidence we received in relation to this period was from Mr Hardman who ceased to operate as a volunteer at the Low Hall approximately 2 weeks after the 4 June date. There was in the bundle of documents an advertisement indicating the use of the property as a holiday home in the early part of the present year 2000.

(i) The picture in summary, therefore, was that prior to 4 June the Low Hall was operated by the Trust as a convalescent home with ancillary use for other guests on a commercial basis by which is meant covering their costs. At the request of the NUM it was also used in connection with seminars and study groups on a paying basis. The Applicants accepted that if there was not a transfer of the undertaking in this case there was no claim of unfair redundancy made against the First Respondent. It was accepted by Mr and Mrs Aldridge and by Mr Scott that there was no other work to which the First Respondent could have allocated them there being only one other home operated by the First Respondent at Lynwood which was already full staffed for the reason before the events of June 1999."

25. These were the Tribunal's findings of fact. The Appellants argue that the statement in the first sentence of paragraph (h) above is simply wrong, and it was this point which persuaded the Employment Appeal Tribunal at the preliminary hearing of this appeal to allow the appeal to go forward and for the chairman's notes to be produced. For the Appellant, Mr Bourne sought to extend parts of the evidence of Mr Hardman (a volunteer who helped on 4 June 1999) to the fact that there were people in the home convalescing after 4 June 1999. He also relied on the statements of the Appellants, and in particular Mrs Aldridge's statement to the effect that after 4 June 1999 the NUM came in and took over the operating of the home. Nothing changed, she said, in the sense that the same type of service was provided for the same clients. Mr Bourne also relied on a letter from the NUM (YA) dated 27 May 1999 calling upon members of the union to "save your convalescent home at Scorby and make sure that its marvellous facilities continue to be available to you and your family in accordance with the undertakings given by the NUM".
26. In these circumstances, Mr Bourne submitted that there was ample unchallenged evidence that the NUM (YA) had continued to use Low Hall as a convalescent home, albeit not for beneficiaries of the Trust as such beneficiaries.
27. The NUM (YA)'s case was that there had been a radical change of user after 4 June 1999. Whereas prior to that date Low Hall had been available for convalescent miners from the Yorkshire Coalfield, after 4 June 1999 all such miners were accommodated by the Trust at Lynwood. Low Hall was used by the NUM (YA) for a variety of purposes, including seminars, conferences and as a holiday home, but all those who attended or used the facilities paid for them. There had, accordingly been a radical change of use. Specifically, however, the use of the home as a place for convalescent miners from the Yorkshire Coalfield pursuant to the terms of the Trust ceased. All such miners were accommodated elsewhere for recuperative or convalescent purposes. There was, accordingly, Mr Scargill argued, no transfer of the Trust's undertaking.
28. Having heard full and careful argument from both sides, we are satisfied that the phrase used by the Tribunal in paragraph (h) of its reasoning set out above "No evidence was produced in relation to the use by the NUM (YA) of Low Hall after the date of the termination of the employment of the Applicants as a convalescent home" is ambiguous. The sentence could have been more clearly expressed. We are, however, satisfied that what it means is that the Tribunal took the view that the NUM (YA) did not use Low Hall after 4 June 1999 as a convalescent home for Yorkshire miners. In our view, in the context of this case, that was a legitimate view of the facts for the Tribunal to take.
29. If the Tribunal's analysis of the facts is as we believe it to be, then we do not think it can be said that the Tribunal misapplied the law to those effects. The Tribunal referred to the case of Spijkers [1986] ECR 1119 to assist it identify the factors which needed to be taken into account when deciding whether or not there had a been a transfer under TUPE. The Tribunal's conclusion in the following paragraph seems to us on which it was it was entitled to reach. It said:-

"9. Applying those factors to the circumstances of this case it was the Tribunal's conclusion that there was not a transfer of the undertaking in this case. The Tribunal considered the primary issue to be that the undertaking of the (Trust) was the undertaking of the operation of a convalescent home that is the objective of their trust. There was an absence of any evidence to suggest that such a convalescent home was undertaken by the (NUM (YA)) after the date of the transfer of the date of the termination of the Trust's occupation of the Low Hall on 4 June 1999. Thus the Trust ceased operation of a convalescent home. The NUM did not undertake that function which the Trust accommodated elsewhere. Secondary factors taken into account were that there was only a proportion of casual seasonal staff taken on by the (NUM (YA)) after an interruption of one month and that there was not a transfer of customers in the sense that the convalescent beneficiaries of the Trust were subject to other arrangements at Lynwood and were not accommodated at the Low Hall after 4 June 1999. Similarly the transfer of assets was limited to items where ownership was disputed and could not be a determinative factor in this case. Those are the factors the Tribunal took into account in finding that there was no transfer in this case."

30. There is no appeal by the Trust or the NUM (YA) against the Tribunal's findings that Mr Scott had continuity of employment, and accordingly the appeal stands to be dismissed in its entirety.
31. We cannot leave this case without expressing our sympathy for the Appellants and in particular for Mr and Mrs Aldridge, who were close to retirement, and who had served the Trust well. It is to be noted, however, that the NUM (YA) permitted them to remain at Low Hall until they had been able to make alternative arrangements for their accommodation. On the Tribunal's findings the NUM (YA) had no obligation to them. It is, however, most unfortunate that at the end of their respective careers – certainly the career of Mr Aldridge, they should have been involved in a dispute between the Trust and the NUM (YA) which was not of their making, and of which they have been the unfortunate victims.
32. For completeness, we record that at the outset of the hearing before us, Mr Scargill made an application for the NUM (YA) to be dismissed from the proceedings on the basis that it had been improperly joined as a Respondent. For reasons which we gave in an interlocutory judgment, we refused that application.
33. We also share the concern expressed by the Employment Appeal Tribunal presided over by Judge Reid at the Preliminary Hearing of this appeal that the Tribunal's decision in its extended form is notable for its brevity. No point on Meek v Birmingham City Council was taken by the Appellants. We are, however, of the view that had the decision been more fully and more carefully enunciated, a full hearing of this appeal might have been unnecessary.
34. In the event, the appeal is dismissed.