At the Tribunal | |
On 29 July 2002 | |
Before
THE HONOURABLE MR JUSTICE NELSON
MR J HOUGHAM CBE
MR D A C LAMBERT
APPELLANT | |
(2) W S ATKINS FACILITIES MANAGEMENT LTD (3) SERCO LTD |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
Revised
THE HONOURABLE MR JUSTICE NELSON
The Facts.
"from our established labour force at our Shrewsbury office.. or engaged under TUPE obligations from the existing permanently employed site staff "
The Employment Tribunal Decision.
1) That there was a stable economic entity in the performance of package 6 of the WSM Contract. The reactive maintenance programme comprised in package 6 was a distinct part of the undertaking which made up the WSM Contract. The performance of package 6 was substantially a matter for Mr Lowe and the package that he performed retained its identity following the transfer to Williams Brothers. The fact that some of the work was subcontracted in a way that meant additional duties were also taken on by Williams Brothers did not alter this conclusion as a business before and after a relevant transfer did not have to be identical. Here the customers remained essentially the same and the work performed for those customers was essentially the same. That work continued after transfer and was performed by a full time electrician as Mr Lowe himself was. The same buildings were used and security clearance still had to be provided.
The Employment Tribunal considered the authorities and concluded that the performance of a contract by a single employee, could amount to a stable economic entity and did so on the facts of this particular case.
2) The work carried out under package 6 was absorbed into the duties carried out by Williams Brothers following the transfer. The presence of very strict requirements in the WSM Contract for identifying tasks, categorising them in terms of urgency and agreeing costings, meant that there was no difficulty in identifying the economic entity which had been transferred to Williams Brothers.
3) The manner in which Williams Brothers dealt with Mr Lowe's CV and interview suggested that they were trying to avoid any potential liability to accept him as a transferred employee under TUPE.
4) There was a relevant transfer of a stable economic entity of which Mr Lowe, who devoted 98% of his time carrying out specific tasks for that entity, formed a part.
The Appellant's submissions.
'an organised grouping of persons and assets facilitating the exercise of an economic activity which pursues a specific objective.'
That, Mr Napier submits, suggests that one person is not enough, and if there is only one employee there is a risk that the entity will be confused with the activity entrusted to it.
"Thus, in certain labour-intensive sectors, a group of workers engaged in a joint activity on a permanent basis may constitute an economic entity. Such an entity is, therefore, capable of maintaining its identity after it has been transferred where the new employer does not merely pursue the activity in question but also takes over a major part, in terms of their numbers and skills, of the employees specially assigned by his predecessor to that task (Suzen paragraph 21). Thus, an organised grouping of wage earners who are specifically and permanently assigned to a common task may, in the absence of other factors of production, amount to an economic entity (Hernandez Vidal & others, cited above paragraph 26.)"
The Respondents submissions.
"Nor is the fact that the activity in question was performed, prior to the transfer, by a single employee sufficient to preclude the application of the Directive, since its application does not depend on the number of employees assigned to the part of the undertaking which is the subject of the transfer. It should be noted that one of the objectives of the Directive, as clearly stated in the secondary recital in the preamble thereto, is to protect employees in the event of a change of employer, in particular to ensure that their rights are safeguarded. That protection extends to all staff and must therefore be guaranteed even where only one employee is affected by the transfer."
"In Schmidt [1994] IRLR 302, cited above, the Court held that that provision must be interpreted as covering a situation, such as that outlined in the order for reference, in which an undertaking entrusts by contract to another undertaking the responsibility for carrying out cleaning operations which it previously performed itself, even though, prior to transfer such work was carried out by a single employee."
"..the mere fact that the service provided by the old and the new awardees of a contract is similar does not therefore support the conclusion that an economic entity has been transferred."
"Schmidt still stands as a reminder of how very little is required to amount to something capable of being an undertaking – one cleaning lady and her organisation – once due regard is paid to the safeguarding of employee's rights, the subject matter of the Directive."
In Cheesman [2001] IRLR 144 Mr Justice Lindsay expressed similar views at paragraphs 22 and 23 of his judgment.
"that protection extends to all staff and must therefore be guaranteed even where only one employee is affected by the transfer."
(paragraph 15)
Conclusions.
"Schmidt still stands as a reminder of how a very little is required to amount to something capable of being an undertaking – one cleaning lady and her organisation – once due regard is paid to the safeguarding of employee's rights, the subject matter of the Directive."
"Schmidt..illustrates that the fact that only one employee is within a particular sector does not itself deny the sector the title of 'undertaking'".
We agree with that statement.