United Kingdom Employment Appeal Tribunal

APPEARANCES

 

 

For the Appellant	Mr J Carruthers, Advocate Instructed by- Messrs Petticrew Solicitors 25 Barns Street AYR KA7 1XB
For the Respondents (1) For the Respondents (2)	No Appearance Nor Representation Mr A Murdoch, Solicitor Of- The McKinstry Company Queen's Court House 39 Sandgate AYR KA7 1BG


 


LORD JOHNSTON:

1. This appeal, at the instance of the employee, arises in rather unusual circumstances.
2. For some time prior to March 1999 the appellant was employed by the first respondents. They were a freestanding organisation, funded by central Government, concerned with youth projects generally. They had assets which comprised, computers, printers, photocopier, video printing material, art materials, canoes, wetsuits, ropes and office furniture. They also acquired a licence for outdoor activities from the Adventure Activities Licensing Authority. By definition, they also had employees.
3. The facts disclose that the operation to the first respondents came to an end some time in 1998 when the Government withdrew the relevant funding. The second respondents were established in, or about, the beginning of 1997 for the purpose of making a plant for North Ayr and to determine strategy for youth involvement. They were funded by the Scottish Office which remitted funds to the local authority, in this case, South Ayrshire Council.
4. It appears that at the time of the determination of the first respondents' activities, the appellant was dismissed following investigation into financial irregularities. This issue is only live therefore in respect of the subsequent, if any, transfer of the activities of the first respondents by reason of an apparent claim for unfair dismissal being pursued by the appellant. The question is, against whom should it be directed.
5. The determination of the Tribunal, Chairman sitting alone, on the preliminary issue of whether there had been a transfer of undertaking, was that the activities of the first respondents which were accepted by both parties to be an undertaking within the meaning of the relevant regulations have been transferred to South Ayrshire Council and not to the second respondents. The application was accordingly dismissed and it is against that decision this appeal is taken.
6. In a very well presented debate the issues were narrowed, it being accepted by both parties that prior to its determination, the first respondents' activities comprised an undertaking. Such an undertaking had been transferred but the question and only question was to whom. There was no real dispute as to the relevant law which can be most recently summarised by a decision of the European Court, Temco Service Industries SA v Samir Imzilyen & Others case C-51/00 decided on 24 January 2002. The most recent decision of the EAT usefully summarising the position is Cheesman & Others v R Brewer Contracts Ltd [2001] IRLR 144. There being no dispute as to the relevant law to be applied, we need not summarise it.
7. Mr Carruthers, Advocate, appearing for the appellant, submitted that the Chairman had misdirected himself by concentrating, essentially, on the question of contracts of employment after the date of the transfer which were undoubtedly with South Ayrshire Council as the paying authority, notwithstanding the terms of the original letter re-engaging the other employees which referred to the second respondents. This was said to be an error which factor was accepted by the Chairman. Mr Carruthers submitted that this was too narrow a view and, that when the matter was looked at broadly, it was not determinative of the matter that the employees were now paid for by the South Ayrshire Council. What was much more significant was that the licence to perform the outdoor activities had been transferred to the second respondents as it had apparently some of its fixed assets.
8. Mr Murdoch, appearing for the second respondents, submitted the Chairman had properly applied the law, addressed all the material factors and was entitled to place the emphasis he did upon the circumstances of actual employment by the remaining employees subsequent to the transfer which he accepted had taken place but that he submitted properly to the South Ayrshire Council rather than to the second respondents.
9. We were informed that South Ayrshire have been sisted into the process but have not made any submissions, the sisting process having taken place subsequent to the original hearing before the Employment Tribunal. We were favoured with a copy of their response which inter alia takes a position on time bar.
10. We are satisfied that the Chairman in this case placed too much emphasis on the single issue of contract of employment against the broader background of whether or not an undertaking has been transferred. As has been said many times, what one looks for in the issue of transfer, is what aspects of the undertaking can be found in the new employer/transferee. It is not conclusive, although it may be an important factor that no employees of the transferor are transferred to the transferee. We do not therefore regard it as the determinative that the remaining employees are paid by South Ayrshire Council and subject to their terms and conditions of payment.
11. To our mind, there is an open question yet to be resolved as to who is properly to be regarded as the transferee in this case. We are satisfied that the Chairman misdirected himself but we are equally not prepared to make any finding ourselves. We are also concerned that if there is a proper claim for unfair dismissal in the background of this case, the appellant should not lose the opportunity of pursuing it, merely, because of a dispute between two parties closely connected with each other, namely, the second respondent and the South Ayrshire Council.
12. Accordingly, in these circumstances we shall allow this appeal on the basis of a misdirection by the Chairman in law and remit the matter back to a differently constituted Tribunal before which there should be present both the second respondents and South Ayrshire Council. Given that they are the architects of this unfortunate situation, this Tribunal would not be sympathetic to any attempt by them to hide behind an issue of time bar. They had been well aware of the situation from its inception and it would be wholly inappropriate for them to take that technical position. We very much hope the matter can be resolved and thus leave to be determined whether or not there is a proper claim for unfair dismissal.
13. There was a submission by the second respondents in relation to expenses but we are not prepared to make any order in that respect.