United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	MR M HAY (of Counsel) Instructed by: Messrs Pollard Associates Solicitors The Old Mill Reedness Road Swinefleet Yorkshire DN14 8EN
For the Respondents	No appearance or representation by or on behalf of the Respondents


 


SUMMARY


 


THE HONOURABLE MR JUSTICE SILBER

I Introduction

1. In this appeal from a decision of the Employment Tribunal sitting in Leeds and sent to the parties on 27 October 2003, the issue to be resolved by that Tribunal was whether Mr. Stefan Spencer ("the Respondent") was employed by Ward Evans (Financial Services) Limited ("WEFS") in the undertaking or part transferred by WEFS to HLW 180 Limited ("HLW") on 20 December 2002.
2. At the hearing before the Employment Tribunal, it was common ground that there was a transfer of undertaking of WEFS to HLW but the issue was whether the Respondent was employed by WEFS "in the undertaking or part transferred" to HLW. If he was so employed, the liability for the Respondent's contract passed to HLW pursuant to the provisions of Regulation 5(1) of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("the 1981 Regulations"), to which we now turn.

II The 1981 Regulations

3. We gratefully adopt the summary of the relevant legal principles, which were enunciated by Mummery J (as he then was) in Buchanan–Smith v. Schleicher and Co. International Limited [1996] ICR 612 at 613, where he explained that:-

"(1) The starting point is the Acquired Rights Directive (Council Directive (77/187/E.E.C.) (O.J. 1977, L.61, p. 26) which has as its principal purpose "the protection of employees in the event of a change of employer, in particular, to ensure that their rights are safeguarded". Article 1(1) provides: "This Directive shall apply to the transfer of an undertaking, business or part of a business to another employer as a result of a legal transfer or merger". Article 3(1) provides:

"The transferor's rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer within the meaning of article 1(1) shall, by reason of such transfer, be transferred to the transferee".

(2) The Transfer of Undertakings (Protection of Employment) Regulations 1981, made to implement the Directive, provides as follows. Regulation 2(2): "references in these Regulations to the transfer of part of an undertaking are references to a transfer of a part which is being transferred as a business …" Regulation 3(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):

"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".

(3) The provisions in the Regulations must be interpreted, if it is possible to do so without distorting their meaning, to conform to the provisions of Directive (77/187/EEC) as interpreted by the European Court of Justice. In Botzen v. Rotterdamische Droogdok Maatschappij B.V. (Case 186/83) [1985] E.C.R. 519, the Court of Justice ruled on the interpretation of the Directive in the context of the transfer of part of a business and the application of the Directive to employees assigned to that part. Three questions were referred to the Court of Justice. Only the second and third are relevant. The questions were, at p.521.

"(2) Does the scope of the Directive also extend to the rights conferred upon and the obligations imposed upon the transferor by contracts of employment which exist at the date of transfer and which are made with employees whose duties are not performed exclusively with the aid of assets which belong to the transferred part of the undertaking?"

(3) Does the scope of the Directive also extend to the rights conferred upon and the obligations imposed upon the transferor by contracts of employment which exist at the time of the transfer and which are made with employees who are employed in a staff department of the undertaking (for example, general management services, personnel matters, etc.), where that staff department carried out duties for the benefit of the transferred part of the undertaking but has not itself been transferred?"

Those questions were referred to the Court of Justice in the context of the transfer of certain departments of the old company such as marine, general engineering, heavy machinery and turbines, but not of others, such as the general administrative and personnel department. The Court of Justice ruled as follows, on the second and third questions considered together, at p. 528, para. 16:

"Article 3(1) of Directive (77/187/E.E.C.) must be interpreted as not covering the transferor's rights and obligation arising from a contract of employment or an employment relationship existing on the date of the transfer and entered into with employees who although not employed in the transferred part of the undertaking, performed certain duties which involved the use of assets assigned to the part transferred or who, whilst being employed in an administrative department of the undertaking which has not itself been transferred, carried out certain duties for the benefit of the part transferred".

In reaching that conclusion the court upheld the contention of the Commission, at p. 528, paras, 14 and 15:

"the only decisive criterion regarding the transfer of employees' rights and obligations is whether or not a transfer takes place of the department to which they were assigned and which formed the organisational framework within which their employment relationship took effect … In order to decide whether the rights and obligations under an employment relationship are transferred under [the Directive] by reason of a transfer within the meaning of article 1(1) thereof, it is therefore sufficient to establish to which part of the undertaking or business the employee was assigned".

III The Proceedings before the Employment Tribunal

4. On about 25 February 2003, the Respondent presented an Originating Application to the Employment Tribunal in which he claimed that he had been unfairly dismissed, that he was owed arrears of wages and notice pay and that he was entitled to damages. In a Notice of Appearance, HLW contended that the Respondent had ceased to be employed by WEFS before the transfer or alternatively that "he was not part of the business transferred". Prosperis Limited ("Prosperis"), who later purchased the business of HLW, presented a Notice of Appearance contending that at the date of transfer from WEFS to HLW, the Respondent "did not work for [WEFS]". The issue in front of the Employment Tribunal as well as in front of this Appeal Tribunal related solely to consideration of the transfer to HLW as it was agreed that if the Respondent succeeded in showing that HLW became his employers, it will subsequently have to be determined how the Respondent's contract of employment was effected by the transfer from HLW to Prosperis.

IV The Employment Tribunal's Decision

5. The Employment Tribunal heard evidence for three days between 29 September 2003 and 1 October 2003, which came from the Respondent and a number of witnesses called by HFW and Prosperis on the preliminary issue of whether the Respondent's contract of employment was transferred to HLW. Much documentary evidence was put before the Employment Tribunal. As we have explained, it was accepted that there had been a relevant transfer of the undertaking from WEFS to HLW, but the real issue was whether the Respondent was assigned to that business at the time of the transfer.
6. At the hearing before the Employment Tribunal, the Respondent was represented by Counsel, HLW by a director of that company and the Appellants by an Employment Consultant. In its Extended Reasons sent to the parties on 27 October 2003, the Employment Tribunal explained why the contract of employment of the Respondent had been transferred to HLW and in brief, its conclusions were that:-

(i) the only written contract of employment concerning the Respondent's activities existed between himself and WEFS. Although there were subsequent variations, it was made clear to the Respondent on the occasion of each variation that his employment relationship continued to be based on the original contract of employment subject to those variations, which had been confirmed in writing;

(ii) the Respondent, particularly during the latter part of his employment performed work for other subsidiary companies and that for periods of time, the majority of the Respondent's efforts would have gone into providing support to those subsidiary companies. The requirement of the Respondent to perform those duties arose out of Clause 2.3 of his contract of employment with WEFS whereby they could require him to work for another company within the same group of companies as WEFS, whether on a temporary or permanent basis;

(iii) there was no evidence to support the proposition that the Respondent had been permanently transferred to the employment of another subsidiary company as he was clearly only sent in to assist such companies or divisions in order to perform specific tasks;

(iv) there was "absolutely no reason to believe that [his last] assignment [to One Direct] was going to lead to the permanent transfer of the Respondent to One Direct". Some other task would be found for him whenever the needs of the Ward Evans Group ("the Group") required his services;

(v) The Test for determining if the Respondent was transferred, was not one of employment but is one of assignment;

(vi) the Respondent was one of WEFS' employees, who worked partly for WEFS and partly for other parts of the Group;

(vii) Clause 14.1 of the Transfer Agreement between WEFS and HLW imposed a contractual obligation on HLW to take on the Respondent as an employee, particularly noting that within the definition clause, the term "employees" means the employees of WEFS engage in that business at the transfer date "including those whose names are set out in Schedule 2" (italicisation added). Although the Respondent's name did not appear within Schedule 2, the Employment Tribunal attached importance to the fact that the schedule was not expressed to be definitive;

(viii) the Employment Tribunal therefore found that at the point of transfer, the Respondent was employed by WEFS and assigned to WEFS. This meant that pursuant to the provisions of Regulation 5(1) of the 1991 Regulations, his contract of employment would have effect after the transfer as if it had been originally made between him and HLW as the transferee.

V The Employment Tribunal's Findings

7. It is necessary at this stage to summarise the relevant facts found by the Employment Tribunal in order to understand and to resolve the conflicting submissions. Prior to January 2002, the Group was a non-trading holding company with three subsidiary companies. Ward Evans Corporate ("Corporate") conducted insurance business for corporate clients. WEFS provided financial services to individual and corporate clients. One Direct Solutions Limited ("One Direct") sold insurance products over the telephone. There was also a relevant aspect of the business known as One Life, the nature of which we must now explain.
8. WEFS traditionally included within the services that it provided that of giving mortgage advice and mortgage broking. On 17 January 2002, One Life Mortgage Solutions Limited ("OLMS") was incorporated with the intention that all mortgage related work would be transferred to it. It did not, however, commence trading immediately because in order to transact mortgage business, OLMS had to obtain first, a consumer credit licence which it only obtained in May 2002 and second, the necessary regulatory approval to enable it to transact mortgage business which again it only obtained in July 2002.
9. In the interim period, WEFS decided to create an independent costs centre entitled "One Life", which was a trading name for the mortgage business that was transferred into that division. Internally, its accounts were separated from those of WEFS but One Life's business was always part of WEFS' corporate structure. By the time that OLMS would have been able to transact mortgage business in its own right, a group decision had been taken that it would no longer be interested in attracting new mortgage work and this meant that although for a short time OLMS may have actually traded, its life was short-lived. The shareholding of OLMS was not held by the Group but by directors of the Group, who also served as directors of OLMS.
10. Thus, when ultimately the Ward Evans Group collectively became insolvent and went into administration, OLMS was not included within the administration order. In the Statement of Affairs provided for the purpose of the administration proceedings, the directors of WEFS effectively declared that although OLMS was not technically included within the group of companies, they believed that when the 2003 Audit had taken place, a decision would have been taken to transfer the shares to the Group and that as a consequence, for the purpose of the administration, all the mortgage business conducted by OLMS should be regarded as the mortgage business of WEFS.
11. It is now appropriate to mention the role of Mr. Alex Dawson, who occupied a variety of roles between 1997 and 2002 and who was closely involved with the Respondent's activities. Initially, he was Sales Director for Corporate before in 1998 becoming a director of WEFS of which he continued to be a director until his resignation on 12 December 2002. Meanwhile, in July 1999 Mr. Dawson had become Group Managing Director and in October 2000, he became Managing Director of WEFS.
12. In November 2001, Mr. Dawson became a Director of One Direct and in March 2002, he became a Director of One Life. In April 2002, he became Managing Director of One Direct. The Tribunal found that during this period, Mr. Dawson had a variety of roles within the company and that he was a very significant personality within the Group as "to a very large extent he imposed his will upon the different Boards of Directors". The Tribunal also found that on occasions, Mr. Dawson made important decisions without necessarily referring the matter to the appropriate Board of Directors. The Tribunal concluded for reasons that I will shortly summarise that the Respondent was very much the "right-hand man" of Mr. Dawson.
13. The Respondent's dealings with WEFS commenced on 17 July 2000 when he accepted the post of Executive Consultant at its London office. On the following day, he entered into a Contract of Employment with WEFS when his job title was given as Executive Consultant and he was given a job description. Clause 2.3 of his contract states in respect of the Respondent that:-

"In addition to the duties which the job normally entails, the employee may from time to time be required to undertake additional or other duties as necessary to meet the need of the employer's business, which shall include being transferred to work for another company within the same Group of companies as the employer, whether on a temporary or permanent basis".

14. Clause 16 of the contract also stated in respect of the Respondent that:-

"16.1 The normal place of work will be London, but the employer reserves the right to change this to any place within the United Kingdom. The employee will be given at least one month's notice in writing of any such change. However, the employer will, where appropriate, provide financial or other relocation assistance under any Relocation Policy which it may operate from time to time.

16.2 The employee may be required to work at any of the employer's premises or at the premises of its customers, clients, suppliers or associates within the United Kingdom from time to time. The employee will be reimbursed any expenses properly incurred in connection with such duties, in accordance with the employer's Expenses Policy as amended from time to time".

15. The Respondent entered into a "Trust and Confidence Agreement" with WEFS which compelled the Respondent to preserve all confidential information in the possession of WEFS or in the possession of a group company. On 1 November 2000, the Respondent was given a new job title as Assistant Training and Development Officer, and he was transferred to the York Office of WEFS. As from 3 December 2000, the Respondent became authorised to carry out a wide range of financial services work, including personal financial planning, corporate financial planning, Group personal pension plans and he was authorised to perform supervisory duties. Thereafter, that authorisation of the Respondent continued in his capacity as an employee of WEFS.
16. On 15 March 2001, the Respondent received a pay rise and he was given a new title of Trainee IFA Manager. He was told that all other details would remain as set out in his contract of employment.
17. On 18 June 2001, in a letter written on "Group" notepaper, the Respondent was informed that his position in York would become redundant as from 16 July 2001, because the York Office was closing and all the functions, which had been previously undertaken in York were being transferred to Leeds. He was given the option of taking redundancy or transferring to Leeds and he selected the latter option.
18. In March 2002, the Respondent was asked to focus his attentions on the mortgage business then being performed by the "One Life" division and, in particular, there was a concern about the accounting records of One Life, which the Respondent was asked to investigate. As we have already explained, at this time, OLMS had by then been incorporated but it was not capable of trading as it had not received the necessary licence or regulatory approval. The Respondent completed his work in about three months and on 11 March 2002, the Respondent was informed that as from 1 April 2002, he was to be promoted to the position of Mortgage Manager with his letter of employment stating that "all other details will remain the same, as set out in your contract of employment, as amended by any subsequent letters to you".
19. The Respondent's salary was duly increased and he was notified of the changes by a letter written by a personnel administrator of One Direct who stated that the letters had been written at the instructions of Mr. Dawson. The Tribunal stated that "despite the fact that "One Direct" notepaper was used, quite clearly [the Respondent] was being asked to perform work for the "One Life" division of WEFS".
20. Bearing in mind that the intention was to create "One Life" as an independent costs centre as from a date in February 2002, the Respondent's pay slips not surprisingly began to be issued under the name of "One Life" with his salary in the words of the Employment Tribunal "no doubt debited to One Life's internal profit and loss account, but of course it was funded by WEFS".
21. The appointment of the respondent provoked internal discussions within the WEFS Board on the subject of whether or not it was appropriate for the respondent to retain his IFA authorisation because once WEFS had more than a certain number of authorised dealers, its capitalisation requirement would automatically be increased. This was significant because WEFS was very close to its capitalisation ceiling and as the Respondent was then apparently doing work for which authorisation was not required, an option, which was considered, was to remove him as an authorised advisor in order to provide WEFS with more "headroom" below its ceiling for its capitalisation requirement. Ultimately, the Board resolved that the respondent would be allowed to preserve his IFA status in the words of the Employment Tribunal "clearly on the basis that that status will be of benefit to WEFS in the future".
22. The Tribunal also found that although the Respondent had been asked to work within the One Life division, his role was not restricted entirely to One Life's business because the Group had decided that it would be of benefit to become accredited to Investors in People ("IIP"). It was decided to introduce IIP within One Direct rather than to see accreditation across the Group and the Respondent was given the responsibility of co-ordinating that project. The Tribunal found that the Respondent was at that time very active in the project and that it was the intention of the Group represented perhaps by the intention of Mr. Dawson that when IIP accreditation had been achieved by One Direct, "they would roll out the process to other members of the Group".
23. On 7 July 2002, the Respondent's role changed again as his role within One Life had been satisfactorily performed and Mr. John Laird was appointed to take over One Life or OLMS as it was shortly to become in place of the Respondent. The Respondent was then given the role of taking on a Group role of Management Training Co-Coordinator and so he again changed directions, becoming responsible for setting up training within the Group, as well as continuing to lead the introduction of IIP.
24. At about this time, WEFS discovered that they had a major problem with a corporate client in Evesham, as they had introduced a pension scheme into that company but gross errors had occurred in the way in which it had been set up and introduced to the employees of that company. Those problems presented a potential litigation risk while Mr. Dawson had identified this company as a potential client of Corporate. So, this situation had to be resolved and the respondent was asked by Mr. Dawson to deal with it. The Respondent co-ordinated the work that was necessary in order to re-establish the pension scheme on a proper footing and to arrange for the employees to have properly conducted interviews. This task involved the Respondent working with varying intensity and it took about three months to perform, even though it conflicted with other work, which the Respondent had been asked to do, including performing induction training for new employees of One Direct. The Employment Tribunal found that the Respondent was having to balance the needs of various parts of the group of companies, but by 12 August 2002, the Respondent attended a meeting of senior managers of WEFS when he was able to report on the progress that had been made at Evesham.
25. Having got on top of that problem in September 2002, the Respondent went away on a holiday but on his return, Mr. Dawson asked him if he could focus his attention upon the Customer Services Department of One Direct. That task involved dealing with customer complaints and problems, as well as attending to training issues that arose. The Respondent also continued with his other duties and so, for example, he had a meeting on 29 November 2002 with Mr. Dawson to discuss the proposed introduction of ISO 9022 quality accreditation. In addition as a supervisor, the Respondent continued to have a role in supervising trainee financial advisors.
26. On 18 December 2002, the Respondent was informed that Administrative Receivers had been appointed for Corporate while on 20 December 2002, those same Administrative Receivers were appointed for WEFS and for One Direct. On 18 November 2002, the business and assets of Corporate were sold by the Receivers, Ernst & Young to Current Trend Limited. On 20 December 2002, the business and assets of One Direct were sold to BH Shield and Company Limited. Finally, pursuant to an agreement made on 20 December 2002 ("the HLW agreement"), the business and assets of WEFS were transferred to HLW.
27. By a letter dated 23 December 2002, the Administrators wrote to each of the employees of the Ward Evans Group informing them of the changes and explaining that:-

"The sales have immediately taken effect on the date referred to above, and your employment with any of the above companies has automatically ceased and being transferred to the relevant acquiring company, depending on which of the above companies you were employed by. From that date onwards, the relevant acquiring company will be your employer".

28. The Respondent was at that time working within One Direct and he asked Mr. Roger Snowdon, a director of this company, if his employment had been transferred to BH Shield and Company Limited, but he was told that as he was not employed by One Direct, he, the Respondent, was not the responsibility of One Direct. The Respondent therefore turned his attention to Mr. Egerton, a Director of HLW, who in a letter of 19 February 2002 contended either that the Respondent had resigned from his employment from WEFS before the business had been transferred to HLW or alternatively, that the Respondent had been employed by OLMS, but the consequence of that was that the employment of the Respondent had not been transferred to HLW but finally, that if all else failed, then in the words of the Employment Tribunal, "Mr. Egerton was to inform [the Respondent] that if, contrary to his earlier assertions [the Respondent] had been employed by WEFS and that employment had been transferred to HLW, he was dismissed for misconduct".
29. The Tribunal found that the tax records showed that the Inland Revenue at all relevant times believed that the respondent was employed by WEFS. The arrangements under the HLW agreement were that the business that was transferred "means that the BDA business, the SIFA business and the CFA business excluding the business carried on by One Direct Solutions Limited and the business carried on by Ward Evans Corporate Limited and the SBU business".
30. Paragraph 14.1 of the HLW agreement provided that-

"The parties agree that this agreement constitutes the sale of a business as a going concern to which the Transfer Regulations shall apply, and that in accordance with the Transfer Regulations, the buyer shall, with effect from the transfer date, take over from the seller the contracts of employment of the employees and each of them, but of no other person".

31. There was also a definitions clause in the HLW agreement stating that employees "means the employees of the seller engaged in the business as at the transfer date, including those whose names are set out in Schedule 2".
32. The name of the Respondent did not appear within Schedule 2 Clause 2.2 of the HLW agreement provided that specifically excluded from the sale, any assets owned by either One Direct or Corporate or Group.

VI Submissions of the Appellant

33. Mr. Mohammad Hay, Counsel for HLW and Prosperis, contends that the Employment Tribunal was wrong in finding that the Respondent was assigned to that part of the undertaking of WEFS, which was transferred to HLW under the HLW agreement. He contends that the Employment Tribunal should have found that the Respondent was part of the undertakings of One Direct or of OLMS or of Mr. Dawson.
34. Mr. Hay's far-reaching submissions can be summarised by stating that he contends that the Employment Tribunal erred because:-

a) its Extended Reasons contained errors of law ("The errors of law point");

b) it was perverse ("The Perversity Point");

c) it does not follow the decided cases ("The Authorities Point);

d) it attached too great importance to the Respondent's contractual employment relationship and therefore did not apply the proper test for the application of Regulation 5 (1) ("The Contract of Employment Relationship Point");

e) it placed too much emphasis on the need for there to be a permanency in any change of the Respondent's employment before it could be regarded as relevant for the application of Regulation 5 (1) ("The Permanence Point");

f) it did not consider other alternatives and in particular that the Respondent was part of the undertakings of One Direct or by OLMS or by Mr. Dawson ("The One Direct/OLMS/Mr. Dawson Undertaking Point");

g) it failed to make adequate material findings of fact and it did not give comprehensible reasons for its decision ("The Findings of Fact and Comprehensible Reasons Point").

VII The Errors of Law Point

35. It is appropriate now to analyse the Employment Tribunal's reasoning in order see if it was erroneous. As we previously explained, the critical feature in determining whether the respondent was employed in an undertaking or part is simply: "was he assigned to that undertaking or part?" (per Mummery J in Buchanan-Smith (supra) at page 623 C).
36. That approach is not in dispute in this case. Helpful guidance has been given in relation to situations such as that confronting the Employment Tribunal in this case by the Appeal Tribunal in Duncan Webb Offset (Maidstone) Limited v. Cooper [1995] 1 IRLR 633, in which Morison J gave illustrations of different employment situations, of which the third was:-

"3. X employs a number of people on X's sole business. The whole of that undertaking is transferred by X to Y. X is part of a group of companies. Some of X's employees work partly for X and partly for other parts of the group. Here, it seems to us, that almost certainly X's employees will be transferred; but we recognise that there may be cases where one could say that despite being employed by X, they were in reality assigned to the business of another part of the group. This simply recognises that the Contract of Employment test is not the only matter for consideration. In other words, an employee might be employed by one company but be assigned to the business of another. Again, tribunals will keep in mind the purpose of the directive and the need to avoid complicated corporate structures and getting in the way of a result that gives effect to that purpose" [17].

37. We agree with the Employment Tribunal that this situation is apposite to describe the Respondent's position because he was one of WEFS' employees who worked partly for WEFS and partly for other parts of the group.
38. The Employment Tribunal held that the Respondent had not been assigned to the business of any other part of the group as they explained that he was merely sent in to assist companies or divisions in order to perform specific tasks. That, they say, explains why he was sent to the Mortgage Division to set up the finances and then he was moved to Evesham to deal with one of their clients before finally going to One Direct to sort out customer relations difficulties. In essence, the Employment Tribunal saw the Respondent as a trouble shooter for WEFS, who moved from job to job as required. The Employment Tribunal's conclusion was that "there is absolutely no reason to believe that assignment was going to lead to a permanent transfer to One Direct".
39. In the light of this background, the Employment Tribunal were quite entitled to reach the decision which it did and it was a response open to it in the light of the established legal principles and its findings of fact. That conclusion is based on the material which the Employment Tribunal considered important and it does not show an error of law.

VIII The Perversity Point

40. At the heart of Mr. Hay's submission was the contention that the decision was perverse and that requires some more detailed consideration of the Tribunal's reasoning, which we have already summarised. The salient points are that the Appellant was originally employed by WEFS and on each occasion when there was a variation, it was made clear to him that his employment relationship continued to be based on the original contract of employment subject to the variation. We did not understand Mr. Hay to challenge that point or the fact that clause 2.3 of the Respondent's contract of employment with WEFS required him to work for any other company within the Group whether on a permanent or temporary basis. The Respondent appeared to work as a form of trouble-shooter, going as we have explained, to different parts of the Group to sort out some of their difficulties, which arose from time to time before moving on to the next problem elsewhere in the Group.
41. Mr. Hay refers to a substantial number of very relevant factual matters which he contends that the Employment Tribunal failed to consider, either individually or cumulatively. Thus, he says that the Employment Tribunal, for example, failed to address adequately or at all the documentary diary information indicating that the Respondent had little or no involvement with regard to time spent with WEFS. Mr. Hay also points out that the Employment Tribunal failed to consider properly the documentary evidence relating to the general lack of the Respondent's involvement with WEFS. He also says that the Employment Tribunal failed to look at accounts, business plans and costs allocations relating to the respondent, which Mr. Hay submits show that it was not intended that the Respondent would be assigned to WEFS. Mr. Hay also pointed to witness statements and oral evidence of Mr. Edgerton, Mr. Neil Gunn, Ms. Hilary Austin, Mr. Dawson and Mr. Kayat which he submits were not considered properly by the Employment Tribunal. There is other material to which Mr. Hay says that the Tribunal should have referred. He also says that the Employment Tribunal's decision was perverse.
42. We are unable to accept that submission for three reasons. First, there was no obligation on the Employment Tribunal to specifically refer to every part of evidence. It is important to bear in mind that the Employment Tribunal only have to give their basic conclusions, together with reasons for it. After we reached that view, we came across two apposite comments, the first was that the Tribunal's decisions are "not required to be an elaborate formalistic product of refined legal draftsmanship, but must contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic factual conclusions and a statement of the reasons, which have led them to reach the conclusion, which they do on those basic facts" (Meek v. City of Birmingham District Council [1987] IRLR 250, 251 [8] per Bingham LJ, with my italicisation added). The second relevant judicial comment was made by Lord Russell of Killowen, who was sitting in the Court of Appeal and who said that "the function of the Employment Appeal Tribunal is to correct errors of law where one is established and identified. I think care must be taken to avoid concluding that an experienced Industrial Tribunal by not expressly mentioning some point or breach has overlooked it" (Retarded Children's Aid Society Ltd v. Day [1978] 1 CR 437, 444). This determination of the Employment Tribunal accords with that guidance, which also shows that all the evidence need not be referred to in the Employment Tribunal's reasons.
43. Second, in any event, even taking into account all the matters referred to by Mr. Hay in his skeleton argument on these points, it was still open to the Employment Tribunal to reach the decision which they did. Third, in any event, a perversity submission of the kind put forward by Mr. Hay "ought only to succeed where an overwhelming case is made out, the Employment Tribunal reached a decision which no reasonable Tribunal, on a proper appreciation of the evidence of the law, would have reached" (per Mummery LJ in Yeboah v. Crofton [2002] IRLR 634 [93] with my italicisation added). The Appellant failed in front of the Employment Tribunal in this case because it found that first, the Respondent was not permanently to work for One Direct or any other entity, second that he had previously been used to help out companies or divisions in the Group and third, that WEFS had the contractual right to require the Appellant to do this. There certainly was not an "overwhelming" case that a perverse decision had been arrived at.

IX The Authorities Point

44. Mr. Hay contends that the Employment Tribunal failed to follow the guidance given by this Appeal Tribunal in the cases of Duncan Webb Offset (Maidstone) Limited v. Cooper [1995] IRLR 633, Buchanan-Smith v. Schleicher [1996] ICR 613 and Sunley Tariff Holdings Limited v. Thomson and Others [1995] IRLR 184, as well as the decision of the Court of Appeal in CPL Distribution Limited v. Todd [2003] IRLR 28. Finally, it is contended that the Employment Tribunal ignored the decision of the European Court of Justice in Arie Botzen and others v. Rotterdamsche Droogdok etc BV [1985] ECR 519. We will consider each of those cases in turn.
45. Mr. Hay contends in respect of the Botzen case that the Employment Tribunal failed to take note of the acceptance by the European Court of the conclusion that "… the only decisive criterion regarding the transfer of employees' rights and obligations is whether or not a transfer takes place of the department to which they were assigned and which formed the organisational framework within which their employment relationship took effect" ([14] and [15]).
46. We do not agree with that submission as the Employment Tribunal expressly referred to this statement in paragraph 35 of its Extended Reasons before applying it in their conclusion in paragraph 46 of the Extended Reasons that "at the point of transfer, the [respondent] was both employed by WEFS and assigned to WEFS".
47. Next, Mr. Hay contends that the Employment Tribunal misunderstood and misapplied the ratio of Duncan Webb in which Morison J set out three different scenarios. Mr. Hay contends that the Employment Tribunal failed to understand and apply the relevance of the Guidance in the first scenario, which was that:-

"(1) X has a business in which he employs a number of people. X transfers part of his business to Y. In order to determine which employees were employed in the part transferred, it is necessary to ask which employees were assigned to the part transferred…. In the course of argument, a number [of factors] were suggested, such as the amount of time spent on one part of the business or the other; the amount of value given to each part by the employee; the terms of the contract of employment showing what the employee could be required to do; how the cost to the employer of the employee's services were allocated between different parts of the business. This is, plainly, not an exhaustive list; we are quite prepared to accept that these or some of these matters may well fall for consideration by an [Employment] tribunal which is seeking to determine to which part of his employers' business the employee had been assigned" [15].

48. The Employment Tribunal considered this scenario, but it explained correctly in our view that it was not part of the business of WEFS that was being transferred, it was the totality of the business. The Employment Tribunal also pointed out that the terms of contract of the Respondent's employment showed that he was required to perform services for sister companies. The Employment Tribunal then explained that "WEFS would not have included such a clause within his contract unless there was value to them in being able to require him to do that work" ([42]).
49. We regard that reasoning as perfectly acceptable and unimpugnable, especially bearing in mind that Morison J attached importance to the terms of the contract of employment as showing what the employee could be required to do. In any event, the Employment Tribunal was not at fault in not considering each of the factors referred to by Morison J for three reasons. First, they were simply regarded by Morison J as matters which "may well fall for consideration by an Industrial Tribunal". Second, as Bingham LJ and Lord Russell of Killowen explained, the Employment Tribunal was not bound to mention every matter which it considered. There was no obligation to consider and we do not consider all or any of them anything was amiss about the way it was dealt with. Third, in any event, the Employment Tribunal did attach importance to at least one factor, which was "the terms of the contract of employment, which showed what the employee could be required to do".
50. It is also said by Mr. Hay that the Employment Tribunal were at fault in failing to apply the second scenario put forward by Morison J, which was that:-

"2. A person is employed to work on Y's business when Y transfers that business into Z. For regulation 5 to apply, the employee must be employed by the transferor. Prima facie, the Regulations would not apply so as to transfer the employee. However, [Employment] Tribunals will be astute to ensure that the provisions of the Regulations are not evaded by devices such as service companies, or by complicated group structures which conceal the true position. Thus, it may well be possible to say, in any given case, that if the person always and only worked on Y's business then X was employing him on behalf of and as an agent for Y. Alternatively, there may be circumstances in which X might be regarded as a party to the transfer, even if not expressly named in the contract of sale. Or, on the other hand, it may be that the employer remained employed by X, who had other work for him to do. Again, these are matters for the [Employment] Tribunal and not for us" [16] (italicisation inserted by Morison J)."

51. The Employment Tribunal considered this scenario to be of greater assistance to it than the first one, but they explained that it was not a case where it was possible for them to say the respondent had always and only worked for the business of One Direct. That fact led to the Employment Tribunal's conclusion that this was a case where the Respondent remained employed by WEFS, who would have had other work for him to do. Again, that is reasoning which was open to them to adopt on the facts.
52. Mr. Hay also criticises the Employment Tribunal for failing to understand and apply the relevance and the guidance in the third scenario, which is set out in paragraph 36 above. Mr. Hay's criticism is that the Employment Tribunal over-emphasised the contractual test as a critical factor without considering the possibility that "an employee might be employed by one company but assigned to the business of another". The Employment Tribunal did consider this point as it held in paragraph 44 of its Extended Reasons that it could not find that the Respondent was assigned to the business of another part of the Group because when he went there, it was not on a permanent basis. In our view, the Employment Tribunal were quite entitled, if not bound, to look as it did at the whole of the Respondent's employment and that included his contractual duties in order to decide if there had been an assignment or not.
53. Mr. Hay next refers to the Buchanan-Smith case, which he says that the Tribunal did not consider properly as it failed to take note of all the relevant circumstances. In Buchanan-Smith, it was held by this Tribunal that there was a valid transfer because the employee was regarded as assigned to and employed in the part of the business transferred. On the facts of the present case, it was open to the Employment Tribunal to find that there was not an assignment of the Respondent to the business of another part of the Group because, as we have explained, the Respondent was employed by WEFS and he was not assigned to, but merely performed duties for, other parts of the Group. In those circumstances, it was open to the Employment Tribunal to decide that the respondent was both employed by and assigned to WEFS.
54. The next case to which Mr. Hay refers is Sunley Tariff, but in that case this Appeal Tribunal upheld the decision of the Industrial Tribunal based on its own particular facts, which were that the employee was employed in the part of the undertaking transferred. That was a fact-sensitive decision, which certainly does not show that the Employment Tribunal in the present case should have reached a decision different from that which it did.
55. The final case referred to by Mr. Hay is the CPL Distribution case in which it was held that the employee was a personal assistant to a particular manager, who was not assigned to the undertaking transferred. In the present case, although the Respondent was very much the "right-hand man" of Mr. Dawson, the Respondent worked separately from him or the Employment Tribunal was entitled so to find having considered all the relevant facts.

X The Contractual Employment Relationship Point

56. It is said by Mr. Hay that the Employment Tribunal attached too great importance to the Respondent's contractual employment relationship and so it did not apply the proper test for the application of regulation 5(1). Mr. Hay however, accepted that, in the words of Mummery LJ in Buchanan-Smith:-

"The test whether a person employed in an undertaking is simply: whether he is assigned to that undertaking or part? That is a question of fact to be determined by considering all the relevant circumstances" (page 623C)."

57. In our view, the Employment Tribunal applied the right test because they acknowledged "the test is not one of employment but it is one of assignment" (paragraph 42 of the Extended Reasons), before concluding that at the point of transfer the Applicant was both employed by WEFS and assigned to WEFS. Thus, this complaint fails.

XI The Permanency Point

58. It is also contended by Mr. Hay that the Employment Tribunal placed too much emphasis on the need for there to be permanency in any change of the Respondent's employment before the change could be regarded as relevant for the application of Regulation 5(1). As we have explained, the conclusion of the Employment Tribunal was that this case fell within the third scenario put forward by this Appeal Tribunal in Duncan Webb, in which some of the transferors' employees worked partly for the transferor and partly for other parts of the Group and to which we referred in paragraph 36 above. Morison J explained that it would "almost certainly" mean that the transferor's employees would be transferred but he accepted that "there may be cases where one could say that despite being employed by [the transferor], they were in reality assigned to the business of another part of the Group". In our view, the Employment Tribunal as the industrial jury, was quite entitled to take the view that the Respondent's position fell within that third scenario.
59. The consequence is that the Respondent's employment would have been transferred unless he had been assigned to another part of the business, such as One Direct. Thus, it was that matter, which had to be considered by the Employment Tribunal and who were then entitled to find as they did that there had been no assignment. There is no merit in this complaint.

XII The One Direct/OLMS/Mr. Dawson Undertaking Point

60. Mr. Hay complains that the Employment Tribunal did not consider other alternatives to the employment of the Respondent being transferred by WEFS to HLW. The Employment Tribunal did consider the position of a transfer to One Direct before it concluded that the Respondent did not always work for them but that he remained employed by WEFS, who would have had other work for him to do after his dealings with One Direct had finished in the same way as he had moved jobs within the Group before.
61. Thus, the Tribunal was entitled to find that the Respondent was not part of the undertaking of One Direct. There was nothing to suggest that he was part of the undertaking of OLMS or Mr. Dawson, who had never employed him and was merely at most his line manager. Mr. Hay did not point to any other cogent evidence to show that this conclusion had to be reached by the Employment Tribunal.

XIII The Findings of Fact and Comprehensible Reasons Point

62. As we have already explained, the Employment Tribunal gave comprehensible and clear reasons for its decision. It made adequate findings of fact in relation to the matters in dispute. As Bingham LJ indicated in the passage quoted in paragraph 42 above, there was no need for the Employment Tribunal to go further and make any more findings, nor was it obliged to deal with every issue that is raised.

XIV Conclusion

63. None of the matters referred to by Mr. Hay whether considered individually or cumulatively show an error of law on the part of the Employment Tribunal. Thus, notwithstanding the sustained and helpful submissions of Mr. Hay, this appeal must be dismissed.