United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	Mr D Stevenson, Solicitor Of- Messrs Thompsons Solicitors 16-18 Castle Street EDINBURGH EH2 3AT
For the 1st & 2nd Respondents For the 3rd to 14th Respondents	Mr P Goulding, Queen's Counsel Instructed by- Messrs Osborne Clarke Solicitors 2 Temple Back East Temple Quay BRISTOL BS1 6EG No Appearance Nor Representation

SUMMARY

Section 2 of the European Communities Act does not render ultra vires the extension of TUPE protection to workers for whom it is not required by the Acquired Rights Directive (in this case, seafarers employed in a ferry service). On the facts the tribunal were entitled to find that there had been a transfer of an undertaking and that both seafarers and maintenance and repair staff based on shore had been employed in the undertaking or parts transferred.


 


THE HONOURABLE MR JUSTICE BEAN:

1. Until September 2002 P&O Scottish Ferries Ltd (POSF) operated ferry services between mainland Scotland, Orkney and Shetland using 3 multipurpose vessels and 1 freight vessel. When the contract was due to expire the Scottish Office invited tenders for the service under the Public Procurement Directive. The tender was won by Northlink Orkney and Shetland Ferries Ltd ("Northlink") whose services started on 1^st October 2002. They did not use any of the 4 ships with which POSF had operated. It was a condition of the tender that the vessels were to be compliant with Safety of Life at Sea (SOLAS) requirements, and the existing ships were not.
2. Two hundred and forty permanent seafarers were employed on board the ferries until September 2002 by POSF (Bermuda) Ltd which, as its name suggests, is a sister company of POSF registered in Bermuda. For present purposes nothing turns on the distinction between the two associated companies and we shall refer to them jointly as "P&O". Among the 240 were 75 members of the National Union of Maritime Aviation and Shipping Transport (NUMAST). The remainder were ratings represented by the RMT Union. There were also 104 shore staff in a variety of occupations including 14 maintenance staff employed in a workshop in Aberdeen. Their job was to maintain the 4 POSF vessels used on the service as well as shore plant. The workshop was at Jamieson's Quay until August 2002 when it had to be demolished to allow the carrying out of harbour works, and the POSF maintenance staff moved to Blaikie's Quay.
3. As from 1^st October 2002 Northlink Services Ltd ("NSL"), an associated company of Northlink, employed 247 seafarers, 218 of whom had previously been employed by P&O. (Again, nothing turns on the distinction between the two Northlink companies.) The other 22 seafarers retired or chose to take other jobs. But the workshop staff were not offered employment with Northlink; instead Northlink had the maintenance and repair of the new ferries operating the service carried out by contractors.
4. Two hundred and sixty eight cases were lodged with the Employment Tribunal. One was brought by NUMAST, the remainder by individuals. The Respondents included the two P&O Companies, Northlink, and other respondents who are not relevant to the present appeal and have taken no part in it. The central issue concerned the applicability of the Acquired Rights Directive and the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE").
5. The individual applicants argued that there had been no transfer of an undertaking for the purposes of TUPE; that they had been dismissed by P&O by reason of redundancy, and that they were therefore entitled to redundancy payments from P&O under that group's contractual scheme irrespective of whether or not they were re-employed by Northlink or anyone else. NUMAST also argued that there had been no TUPE transfer; that their members had been dismissed by P&O by reason of redundancy; that there had been a failure to consult as required by section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992; and that accordingly a protective award should be made pursuant to section 189 of that Act. Northlink supported the argument that there had been no TUPE transfer. P&O, however, argued that there had been a TUPE transfer and that therefore any remedy to which the applicants were entitled was not against them.
6. In order to facilitate the efficient handling of this large number of conjoined claims, a Directions Hearing was held at Aberdeen on 14^th May 2003. With the agreement of all parties, the Chairman fixed a Preliminary Hearing to determine the question of whether TUPE applied to the change in operation of the ferry service, and if so to whom did an undertaking or any part thereof transfer. He gave directions for an Agreed Statement of Facts: the result was a 42 page document. Test cases were selected to represent six categories of individual applicant; Mr. Paul Allardyce, a ship's carpenter was selected to represent those formerly based at the workshop and carrying out work of maintenance and repair either there or on board the ferries when they came in to harbour.
7. The Preliminary Hearing, which included a site visit, took place over 11 days between 3^rd November 2003 and 5^th Feb 2004. In a reserved decision with extended reasons promulgated on 11^th June 2004 the Tribunal held that the ferry service from mainland Scotland to the Northern Isles, together with the assets deployed and the employees engaged in the provision of that service, constituted a stable economic entity and an undertaking in terms of TUPE; that the undertaking was transferred from POSF to Northlink; and that TUPE was applicable to the transfer. The Tribunal proceeded to give directions for the future conduct of the applications.
8. NUMAST and Mr. Allardyce appeal from that decision, jointly represented by Mr. David Stevenson. P&O resisted the appeal and were represented by Mr. Paul Goulding QC leading Ms Shaheed Fatima. Some of the other test case applicants lodged an appeal but those appeals were withdrawn on 10^th February 2005. The remaining applicants and respondents, including Northlink, were not parties to the appeal.
9. The issues before the Tribunal were agreed as follows:-

"(a) The application of Article 1(3) of the Acquired Rights Directive.

(b) Is Regulation 2 of TUPE ultra vires?

(c) Is there an economic entity?

(i) If so, what is the economic entity?

(ii) If so, is it a stable economic entity?

(d) Has the economic entity been transferred to Northlink?

(i) Did Northlink obtain the economic entity as a going concern?

(ii) Has the economic entity retained its identity in the hands of Northlink?"

10. Issue (a) involved an argument by the Applicants that Article 1(3) of the Acquired Rights Directive had direct effect against either or both of P&O and Northlink. The Tribunal rejected that proposition and Mr. Stevenson has not pursued it on appeal. Thus, as the Tribunal pointed out, it is the TUPE Regulations themselves that are applicable in deciding whether there has been a relevant transfer; which leads to the Tribunal's second issue.

Is Regulation 2(2) of TUPE ultra vires?

11. Regulation 2(2) derives from Article 1(3). The Article provides:-

"This Directive does not apply to sea-going vessels"

This paragraph was not altered by the amending Directive 98/50, and accordingly is still in its original form in the codified Directive 2001/23.

Regulation 2(2) provides:-

"Reference 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 and, accordingly, do not include references to a transfer of a ship without more."

It is also relevant to note Regulation 13, which provides:-

"1. Regulation 8, 10 and 11 of these Regulations do not apply to employment where under his contract of employment the employee ordinarily works outside the UK.

2. For the purposes of this Regulation a person employed to work on board a ship registered in the UK shall, unless (a) the employment is wholly outside the UK or (b) he is not ordinarily resident in the UK, be regarded as a person who under his contract ordinarily works in the UK."

12. It is plain that Article 1(3) refers to a class of employees. The Directive is concerned with employment, and one cannot employ a ship. The extensive researches of the parties suggest that Article 1(3) has not been interpreted by the European Court of Justice. Its natural meaning would appear to be that the Directive does not apply to seafarers. But that does not mean that as a matter of European law the Directive cannot be applied to seafarers. On the contrary, Article 8 of the 2001 Directive (Article 7 in the original 1977 text) permits Member States to apply or introduce laws or regulations or administrative provisions concerning its subject matter which are more favourable to employees than the Directive requires.
13. In Addison v Denholm Management Ltd [1997] ICR 770 at 785 this Tribunal, Lord Johnston presiding, said:-

"In our view, the plain purpose of the Directive as a whole is to regulate the rights of employees in undertakings and accordingly, in removing sea-going vessels from the scope of the Directive, the only sensible purpose in the minds of the legislator must have been to include in the exclusion, or be concerned with, the crews of those vessels. Whatever may have been the thinking behind such an exclusion, which might have been because of the peripatetic nature of a seaman's job, to construe the Directive as taking out ships, but not their crews, from its scope, in our view offends common sense and, accordingly, the purpose of the Directive in that context. While the Regulations of 1981 use the word "ship" we nevertheless consider that, having construed "sea-going vessel" to mean crews of same, or at least to include them, the same must be said of "ship" in the Regulations of 1981. Thus the Regulations simply track the Directive. Therefore we conclude that "without more means "more than the ship and its crew"".

14. In Castle View Services Ltd v Howes [2000] SLT 696 the First Division (the Lord President (Rodger), Lords Sutherland and Caplan) said:-

"[Counsel for the appellant employers submitted that] ….it was not in all circumstances that the crew of a sea-going vessel were excluded from the benefit of the Regulations. Article 1(3) does not in fact refer to the crew at all, providing as it does that the Directive shall not apply to sea-going vessels. As the Directive is concerned with the employment of individuals and not vessels, plainly this article has to be construed. Parties were agreed that the proper construction in accordance with previous cases, was that the Directive does not apply to sea-going vessels or to the crews of such vessels. However this is an exclusion from the benefit of the Directive and Member States are entitled to relax that exclusion. Counsel submitted that Regulation 2(2) plainly did constitute such a relaxation. Where it is said in the Regulations that the transfer of part of an undertaking does not include reference to a transfer of a ship without more, it clearly implies that if there is more, then the reference to transfer of a part of an undertaking does include references to the transfer of a ship. The fact that crews of a sea-going vessel are not to be automatically and completely excluded can also be seen from Regulation 13. Counsel for the Respondent submitted that the Directive was clear and excluded the crews of sea-going vessels. As far as Regulation 2(2) was concerned it could be construed as meaning that as far as the transfer of a business was concerned those employees who were part of that business would not be excluded, but in so far as they were employees who were engaged as crew of a sea-going vessel, they would be excluded.

In our opinion Regulation 2(2), which is what we have to construe, does not automatically exclude all crewmembers of sea-going vessels. If we take the example of a shipping company with two vessels, if one of those vessels is sold to another company, the crew would be excluded from the Regulation. This would be because there has been the transfer of the vessel, but there is "nothing more". This would be consistent with the concept expressed in Spijkers that the sale of an asset does not constitute the sale of part of a business. If, however, the whole of a company was taken over by another company then the whole of the business would be transferred, including, of course, the two vessels. In that situation there would be transfer of business as a whole and this would constitute more than the mere transfer of the ship or ships. In that situation it appears to us that on a proper construction of Regulation 2(2) the crews of the vessels would not be excluded from the benefit of the Regulation. This construction would also give some content to Regulation13 which Counsel for the Respondents frankly admitted was inconsistent with his interpretation of Regulation 2(2)."

We respectfully agree with these observations of their Lordships.

15. Mr. Stevenson, however, advanced an argument which was not before the Inner House in the Castle View case, and is an unusual one to be put forward on behalf of a trade union. He submitted that as a matter of domestic law Regulation 2(2) is ultra vires in so far as it purports to confer TUPE protection on seafarers employed in an undertaking which includes, but is not limited to, a ship and its crew.
16. Section 2(2) of the European Communities Act 1972 provides:-

"Subject to Schedule 2 to this Act, at any time after its passing Her Majesty may by Order in Council, and any designated Minister or Department may by Regulations, make provision – (a) for the purpose of implementing any Community obligation of the UK or enabling any such obligation to be implemented, or of enabling any rights enjoyed or to be enjoyed by the UK under or by virtue of the Treaties to be exercised; or (b) for the purpose of dealing with matters arising out of or related to any such obligation or rights or the coming into force or the operation from time to time, of sub-section (1) above; and in the exercise of any statutory power or duty including any power to give directions or to legislate by means of orders, rules, regulations or other subordinate instruments, the person entrusted with the power or duty may have regard to the objects of the Communities and to any such obligation or rights as aforesaid."

17. In R v Sec of State for Trade and Industry, ex parte UNISON, GMB and NASUWT [1996] ICR 1003 Otton LJ (with whom Newman J agreed) described these as very general and wide powers. He said that the phrase "relating to" was to be given its natural meaning, and did not mean "tangential to or consequential". However, in its judgment in Addison this Tribunal, immediately after the passage quoted above, went on to express the following view:-

"Assuming, finally that that issue of construction which we prefer is erroneous, the matter of vires does arise. Without venturing a view as to whether R v Sec of State for Trade and Industry, ex parte UNISON, is correctly decided on its own facts, we confess considerable concern with the general approach of Otton LJ if he is seeking to suggest that "related to" in section 2(2)(b) of the European Communities Act 1972 can be used to enable a Minister to widen, by Regulation, the main thrust or effect of the Directive it is seeking to implement. In our opinion, as a matter of general law in relation to primary and subordinate legislation, as stated by Lord Mackay of Clashfern LC in Hayward v Cammell Laird Shipbuilders Ltd (No.2) [1988] ICR 464, 473, if the Directive is to be regarded as the parent the child cannot be larger, wider, or have greater implications than its parent allows. Accordingly, if the effect of Regulation 2(2) of the Regulations of 1981 is to confer a lesser exclusion, and thus a wider benefit, to workers otherwise excluded by the directive, we consider that the Regulation is ultra vires the enabling power, and would require primary legislation as contemplated by Article 7 of [the Directive]. The paradox is that, if this approach is correct and Regulation 2(2) is defective and if, applying severability, it is merely deleted, there is no exclusion at all, and the Transfer of Undertakings (Protection of Employment) Regulations 1981 as a whole, therefore, do not reflect Article 1(3) of the Directive. Since this question is not essential or even material to the main thrust and base of our decision, we offer no further view on this difficult point. This is the principal reason why we approach the matter as a matter of general construction of the extent, or limits, of the exclusion in Article 1(3) of the Directive."

18. These observations were, as the Appeal Tribunal were at pains to observe, obiter dicta, as were similar remarks made by this Tribunal, again with Lord Johnston presiding, in Perth and Kinross Council v Donaldson 2004 IRLR 121. As a general proposition it may well be correct that a Minister cannot widen by regulations made under the European Communities Act 1972 "the main thrust or effect" of the Directive which the Regulations are seeking to implement. But we do not accept, particularly given the terms of Article 7 of the Acquired Rights Directive, that to include within the scope of TUPE a group of workers who might otherwise be excluded from protection is an improper use of the regulation-making power. We are fortified in that conclusion by the opinion of the Inner House in Castle View Services Ltd v Howes albeit without having heard the ultra vires argument. We therefore conclude that Regulation 2(2) of TUPE is not ultra vires.

Was there a stable economic entity? If so what was it?

19. In Cheesman v R. Brewer Contracts Ltd [2001] IRLR 144 Lindsay P, giving the judgment of this Tribunal, distilled the European and domestic case law as to whether there is an undertaking for the purposes of TUPE into a series of criteria:-

"i. There needs to be a stable economic entity whose activity is not limited to performing one specific works contract, an organized grouping of persons and of assets enabling (or facilitating) the exercise of an economic entity which pursues a specific objective.

ii. In order to be such an undertaking it must be sufficiently structured and autonomous but will not necessarily have sufficient assets, tangible or intangible.

iii. In certain sectors such as cleaning and surveillance the assets are often reduced to their most basic and the activity is essentially based on manpower.

iv. An organized 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.

v. An activity of itself is not an entity; the identity of an entity emerges from other factors such as its workforce, management staff, the way in which its work is organized, its operating methods and, where appropriate, the operational resources available to it."

20. The Employment Tribunal found that in the present case:

"…..there can be seen instantly an organized grouping of persons and of assets which comprised the conduct of an economic activity pursuing the specific objective of providing a ferry service to the Northern Isles from Aberdeen and from Scrabster for passengers and their accompanying car, livestock and freight. It was clearly structured and autonomous with wage earners as an organized group specifically and permanently assigned to that common task. The constituent elements of that grouping were the seafarers, the reservations staff, stevedores and cleaners. The maintenance workers in the Aberdeen workshop were also part of the POSF ferry service, albeit their workload had been reduced after the disposal of the groupage and haulage (G&H) business, since their work was primarily in connection with the vessels and other elements such as buildings, which were integral to the service. A very significant element in the economic entity was the grant from the Scottish Executive, without which the service could not possibly survive economically. The evidence was clear to that effect."

21. Mr Stevenson, in arguing against the existence of a stable economic entity, pointed to the selling off, 9 months before the ferry service changed hands (though admittedly on a TUPE basis), of the G&H business of POSF. The Tribunal found that factor to be immaterial, the activity not being in their view a necessary or integral part of the ferry service. We agree. We also agree that the time at which the existence or otherwise of a stable economic entity falls to be considered was at the time when POSF ceased to operate the ferry service, that is to say at the end of September 2002.
22. The Tribunal concluded that at the point of transfer there was an undertaking within the meaning of TUPE, which consisted of "the ferry service to the Northern Isles including the physical and intangible assets employed in the provision of that service, the sea-farers, reservations staff, stevedores, maintenance staff and cleaners. It also included the entitlement to the government subsidy, without which the service could not survive economically." They therefore held that, subject to the issue of "stability", the tests identified in Cheesman were met. We agree.
23. The adjective "stable" appears neither in the Directive nor in the Regulations but derives from the decision of the European Court of Justice in the Rygaard case [1996] ICR 333. A one-off contract for the construction of a canteen was started by contractor A and finished by contractor B. The change from A to B was held not to constitute a transfer of an undertaking within the meaning of the Directive.
24. Rygaard is generally regarded as being of limited scope. We agree with the Tribunal that for these purposes a stable economic entity is to be contrasted with one which is carrying out a single contract or operation and is likely to have a limited duration. The Tribunal noted that a ferry service from Aberdeen to the Northern Isles had been in existence in one form or another since about 1790 and that POSF themselves had been providing the service for a considerable number of years. They concluded, and were clearly entitled to conclude, that the requirement of stability was satisfied.

Was the economic entity transferred (within the meaning of TUPE) to Northlink?

25. This question has two elements: whether the entity retained its identity and whether it was transferred as a going concern. The case law beginning with the leading decision of the European Court of Justice in the Spijkers case [1986] ECR 1119 was summarized in Cheesman in 12 propositions which it is not necessary to repeat.
26. The principal area of argument was over the absence of transfer of major tangible assets. Mr Stevenson laid great emphasis before us, as he and Mr Truscott QC had in the Employment Tribunal, on the fact that the 4 ships with which P&O had operated the service were not transferred to Northlink. He drew an analogy with the facts of the Oy Liikenne case [2001] IRLR 171. The operation of 7 of Helsinki's bus routes previously run by company A was awarded to company B. Company A thereupon dismissed 45 bus drivers, 33 of whom were re-engaged by company B, but on less favourable terms and conditions. No vehicles or other assets connected with the operation of the bus routes were transferred, although company B bought uniforms from company A for some of the drivers who entered its service. The applicants, who were among the 33 drivers taken on by the new operator, claimed that there had been a transfer of an undertaking, so that they were entitled to enjoy the terms and conditions applied by their former employer. The Supreme Court of Finland referred a question to the European Court of Justice to which, unusually, the Court gave an answer not merely setting out general principles but saying how the case should be decided. It held that "in a sector such as scheduled public transport by bus, where the tangible assets contribute significantly to the performance of the activity, the absence of a transfer to a significant extent from the old to the new contractor of such assets, which are necessary for the proper functioning of the entity, must lead to the conclusion that the entity does not retain its identity. Consequently, in a situation such as that in the main proceedings, Directive 77/187 does not apply in the absence of a transfer of significant tangible assets from the old to the new contractor."
27. Mr Stevenson's submissions on this subject were neatly summarised by the Tribunal in these terms: "No transferred buses, no continuing entity. No transferred ships, no continuing entity."
28. In P&O Trans-European Ltd v Initial Transport Services Ltd [2003] IRLR 128 (a case involving a P&O group company but nothing to do with ferries) this Tribunal held that the European Court's decision in Oy Liikenne did not lay down a principle that in all cases of asset-intensive industries the absence of a transfer to a significant extent of such assets would always lead to the conclusion that no transfer had taken place. When the judgment is read as a whole, it is apparent that the Court of Justice was reaffirming the principle that all relevant factors have to be weighed in assessing whether or not a transfer had taken place, and that the weight to be given to particular factors would vary in accordance with the facts of the case. In an asset-intensive industry the fact that assets were not transferred will be a circumstance to be taken into account. But the whole of the transaction has to be looked at in order to see whether one particular factor is decisive. The approach of the European Court of Justice in deciding whether a transfer of an undertaking occurred remains "multi-factorial".
29. The Tribunal found that it was incorrect to say in the present case that no significant assets were transferred, even if the ships were not. They found that there was a strong correlation between the various premises and piers occupied and used respectively by POSF and Northlink at the various ports. This obviously came about by means of the termination of leases or licences which had been granted by the various port or harbour authorities to POSF, and the subsequent granting of fresh leases or licences for practically the same properties to Northlink. These included not merely buildings and yards but berths and piers. They held that the numerous premises and piers at the various ports were essential and integral to the operation of the ferry service, as conducted by POSF and Northlink, and constituted significant tangible assets which were transferred. They noted that no such element was present in Oy Liikenne.
30. Summarising their findings on matters other than the transfer of tangible assets, they attached importance to the transfer of a significant intangible asset, namely the government subsidy; to the fact that 90% of the seafarers previously working for POSF were taken on by Northlink; and to the fact that passengers who had used the ferries in POSF's time inevitably transferred to Northlink (there being no alternative, other than by air, and none at all if one wished to bring a car). All of these factors pointed in the direction of the transfer of an undertaking.
31. As to the degree of similarity between the activities carried on before and after the transfer, the Tribunal found on the facts that there was a high degree of similarity. In particular they noted that POSF and Northlink:-

Both operated ferry services from the mainland to Orkney and Shetland for passengers, cars, livestock and freight.

Both operated 4 vessels for this purpose and with one exception did so on the same routes to and from the same ports.

Both occupied various premises at these ports and to a large degree the same premises.

In the main both used the same piers and berths at the various ports.

Both had personnel consisting of seafarers and shore staff.

Both serviced the same customers.

Both were able to conduct their operations by being in receipt of the same or similar government subsidy.

Both operated the same or similar reservations systems.

Both required and conducted the activities of loading and unloading the vessels by the use of stevedores, tug-masters and goosenecks.

Both, to a greater or lesser extent, required to carry out maintenance and repair to their respective vessels, and also the cleaning of vessels and premises.

32. Finally, the Tribunal drew attention to the fact that the intentions of the parties expressed at the time of the alleged transfer, while of course not conclusive (for example when parties are attempting to evade the applicability of the Regulations), may be taken into account. At the time of this transaction Northlink expressed their intention that TUPE would apply. Their attitude later changed. The Tribunal found that the change of stance was motivated by a desire not to cause upset amongst the seafarers upon whose knowledge and experience in operating the particular ferry routes they depended. Accordingly they followed the result of the seafarers' ballot in which, in the hope of receiving large enhanced redundancy payments, the seafarers had declared, almost to a man, that they did not wish TUPE to apply. The Tribunal found that Northlink did not wish to be regarded in the eyes of the seafarers as responsible for, or contributing towards, a situation whereby these men were prevented from receiving the redundancy payments. Nevertheless, they regarded the declared intentions of Northlink as to the applicability of TUPE as relevant and as making easier an inference of transfer.
33. The Tribunal's conclusion on this issue was that an observer would conclude that the ferry service to the Northern Isles had continued just as it had done before – no doubt with a number of changes and improvements, but basically continuing the same service. They found that there was retention of identity with the business being continued as a going concern, and accordingly that the undertaking was transferred to Northlink within the meaning of TUPE. These are unimpeachable conclusions, and come at the end of a Tribunal decision to which we would pay tribute as a model of clarity and thoroughness. The appeal of NUMAST must be dismissed.

The maintenance and repair staff

34. On the appeal of Mr Allardyce, the applicant representing the maintenance and repair staff, Mr Stevenson argued that Northlink did not take on the workshop premises, nor the 14 employees of POSF who were based there although they did some work on board the ships in harbour. He therefore argued that even if the seafarers were found to have been employed in an undertaking or part transferred, the maintenance and repair staff were not, and that to hold otherwise was to confuse an activity with an undertaking. He also submitted that there was a good deal less repair work to be done on the new ferries than had been required for the old vessels operated by POSF.
35. The Tribunal found as follows:

"We consider that the first correct question was whether this activity itself [maintenance and repair] was one which was continued or not by Northlink – quite apart from the degree or frequency with which it was required, or the manner in which it was organized. On the facts, the answer to that question would appear to be in the affirmative. Mr Allardyce was the source of the evidence which showed that the work in which he was engaged on the Northlink vessels through the sub-contractor as his new employer, was basically of the same nature as had been carried out previously by the workshop of the POSF vessels. Naturally there was much less of it, at least in the period of our review, since the Northlink vessels were brand new; and much of it was carried out under a warranty arrangement by the shipbuilders. However, these factors appear to us to be matters of degree or which concern the manner in which the activity was carried out. At its basic level the activity of maintaining and carrying out repairs to the vessels still existed".

36. As we have already recorded the Tribunal also found that the activities and functions of the workshop (it would be more accurate to say of the maintenance and repair staff based at the workshop) were necessary and integral to the undertaking which transferred as a whole to Northlink. It follows that Mr Allardyce and his colleagues were employed in the undertaking immediately before the transfer. The appeal in Mr Allardyce's case must likewise be dismissed.