United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR P O'BRIEN (of Counsel) (Non-practising)
For the First Respondent	The First Respondent is debarred
For the Second Respondent	MR M DUGGAN (of Counsel) Instructed by: Messrs Debenhams Ottaway Solicitors Ivy House 107 St Peters Street St Albans AL1 3EW


 


SUMMARY

TRANSFER OF UNDERTAKINGS

Transfer

Whether temporary cessation of operation at putative transfer date prevents relevant transfer as Employment Tribunal held. Answer: No.

Appeal allowed, case remitted for Employment Tribunal merits hearing.


 


HIS HONOUR JUDGE PETER CLARK

1. This appeal raises a TUPE point. Does the economic entity referred to in regulation 3(1)(a) of the 2006 Regulations have to retain its identity on the transfer date, or may it be sufficient that the operation resumes at some later date? That is the question posed in this appeal by the Claimant Mr Wood against the majority judgment of an Employment Tribunal sitting at Watford promulgated with reasons on 3 September 2009. The appeal is resisted by the Second Respondent below, London Colney Parish Council. The First Respondent, Caledon Social Club has taken no part in the appeal.

The Facts

2. The Second Respondent is the freehold owner of a property known as the Caledon Community Centre in London Colney. In August 1967 the Second Respondent granted a 99 year lease of the Centre to London Colney Community Association (LCCA). LCCA sub-let or granted licenses of various parts of the Centre, including an occupational licence granted to the First Respondent of the two bars, bar area, kitchen area and beer cellar (the club area) from 1 April 1994 until 31 March 2010. Members of the LCCA had the right to use the club area, which had a premises licence for the sale of alcohol ("the premises licence certificate").
3. On 23 October 2005 the Claimant was employed by the First Respondent as a bar steward. He was their sole employee and the licensee. On 6 June 2008 the premises licence certificate was withdrawn by the Licensing Committee of St Albans & District Council. An appeal was lodged against that withdrawal. On 11 August LCCA, surrendered the lease of the Centre to the Second Respondent and on 12 August the Claimant was dismissed.
4. On 29 August the First Respondent withdrew its appeal against the withdrawal of the premises licence certificate and on 16 September 2008 the First Respondent surrendered its licence of the club area to the Second Respondent. By then the First Respondent had fallen into financial difficulty with debts of nearly £20,000, mainly to the brewery. The Second Respondent set up a new management committee, the Caledon Community Association (CCA) to replace the LCCA.
5. On 30 September the Second Respondent made an application for a premises licence certificate for the club area. A personal licence was granted to Councillor Flynn, a member of the Second Respondent Council and the bar re-opened on 6 October 2008. On 8 November a second premises licence was granted to the Second Respondent.
6. Councillor Flynn ran the bar on Friday, Saturday and Sundays. Occasionally the bar opened on Wednesday and Thursdays. Casual bar staff was used from time to time. No full time steward, like the Claimant, was appointed on grounds of cost.

Employment Tribunal Reasoning

7. The Employment Tribunal found that if a relevant transfer took place it did so on 16 September 2008. Although there was an economic entity in existence before that date it did not, in the view of the majority (Employment Judge Mahoney and Mr Howlett-Bolton), retain its identity at the date of transfer because, on that date an essential element of the operation was missing, that is, a premises licence certificate. Accordingly, the majority held that there was no relevant transfer.
8. The minority member (Mrs Brosnan) took a different view. In her opinion the absence of a premises licence certificate on the putative transfer date did not end the matter. She attached no particular importance to the end of work by the transferor (the First Respondent) and the start of work by its successor (the Second Respondent). She would have found that a relevant transfer had taken place.

The Appeal

9. Mr O'Brien submits that the approach of the minority member was correct. Applying the relevant law, which he accepts is correctly stated by the Employment Tribunal (Reasons, paras 5, 6) to the facts as found it is enough that the pre-transfer operation is resumed in identical form after the transfer date; it need not continue from that date. He draws attention to the guidance given by Lindsay P in Cheeseman v Brewer [2001] IRLR 144 and in particular this proposition (set out at para 6.10.1 Employment Tribunal Reasons).

"6.10.1 The decisive criterion for establishing the existence of a transfer is whether the entity in question retains its identity, as indicated, amongst other things, by the fact that its operation is actually continued or resumed."

10. Mr Duggan, to the contrary, argues that the majority was correct in focusing on the putative date of transfer. Only if the economic entity then retains its identify can a transfer take place.
11. We have been referred to and can find no authority directly in print. Alterations in leaseholdings, as in Bork [1989] IRLR 41 and Daddy's Dance Hall [1988] IRLR 315, both ECJ, do not assist on this point. Nor, with respect, does the case of Charlton [1995] IRLR 79 to which Mrs Brosnan referred in her minority opinion below.
12. In our judgment the correct analysis on the particular facts as found by the Employment Tribunal is that there was here a temporary cessation of the bar operation at the Centre. It is plain that, by 16 September, the Second Respondent intended to obtain a fresh premises licence certificate and themselves to re-open the bar area, operating precisely as it had done under the First Respondent. That is what happened. The economic entity did not cease on 16 September; it was temporarily suspended until the bar re-opened on 6 October, a personal licence having then been granted to Councillor Flynn.

Conclusion

13. In these circumstances we shall allow this appeal; substitute a declaration that a relevant transfer for the purposes of regulation 3(1)(a) TUPE 2006 took place from the First to Second Respondent on 16 September 2008 and remit the matter to an Employment Tribunal to be appointed by the Regional Employment Judge at Watford for further hearing on the merits of the Claimant's unfair dismissal claim.