United Kingdom Employment Appeal Tribunal

Appeal No. UKEAT/0255/12/JOJ

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

At the Tribunal

On 14 March 2013

Before

MR RECORDER LUBA QC

BARONESS DRAKE OF SHENE

MR T HAYWOOD

MR S J BEYNON APPELLANT

CRASH ACCIDENT REPAIR SERVICES LTD (DEBARRED) RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

SUMMARY

TRANSFER OF UNDERTAKINGS – Transfer

On the issue of whether there had been a ‘relevant transfer’ for TUPE purposes, the Employment Tribunal (ET) preferred to the Respondent’s witness’s evidence that there had been no transfer.  It failed to give any reasons for preferring that evidence to the other evidence in the case.  Moreover, such an explanation was called for in the circumstances of the case by contradiction and inconsistency in that witness’s three witness statements.  The ET gave no other reasons for holding that no transfer had taken place and thereby failed to make the findings of fact essential to the multi-factorial approach to transfers required by Cheesman.

MR RECORDER LUBA QC

Introduction

1.            This is a Claimant’s appeal from the Judgment of the Employment Tribunal at Cardiff (Employment Judge Povey and Members) given on 10 January 2012.  By its Judgment the Employment Tribunal determined that a change of the Claimant’s employment, which had taken place in September 2009 was not a transfer to which the TUPE Regulations applied.

2.            That had the effect of limiting his continuity of employment and thereby curtailing both the amount of compensation he was to be awarded in respect of his unfair dismissal by the present Respondent and his entitlements to notice pay, his holiday pay and other sums contingent on his length of service.

3.            By an amended Notice of Appeal, for which permission to amend was granted on 25 February 2013, Mr Beynon contends that the Employment Tribunal failed to apply the correct law in determining whether there had been a relevant transfer for the purposes of the TUPE regulations in 2009.  In the alternative, it is said that the appeal should succeed because the Employment Tribunal failed to give adequate reasons and/or reached a conclusion which was perverse.  By dint of its failure to comply with procedural requirements, the Respondent has been debarred from resisting this appeal.

4.            Until September 2009, Mr Beynon had worked for Aberdare Ford in its body shop as panel beater/sprayer.  In 2009 the body shop premises were acquired by the present Respondent.  After that acquisition Mr Beynon was employed by the Respondent until his dismissal for redundancy in April 2011.  The Employment Tribunal found that he had been unfairly so dismissed and a remedies hearing was arranged to determine the extent of compensation and his entitlement to notice, holiday and other payments.  The first of the issues that the Employment Tribunal directed for consideration at the remedies hearing was whether there had been a change of employer from Aberdare Ford to the present Respondent which constituted a ‘transfer’ for the purposes of the TUPE Regulations.

5.            At the remedies hearing the Employment Tribunal heard evidence on that question from Mr Beynon and from a Mr Martin of the Respondent.  Mr Beynon had anticipated relying on the evidence of a Mr Lloyd who had been the Chief Executive of Aberdare Ford and witness summons had been issued for his attendance at the remedies hearing, however, Mr Lloyd had died before the date of that hearing.

6.            Mr Beynon’s case to the Employment Tribunal at the remedies hearing had been that the economic entity that had been the Aberdare Ford Body Shop had been transferred to the Respondent.  He pointed to the fact that there had been no break in time between his employment with Aberdare Ford and his employment with the Respondent and he relied on evidence that the previous customers of Aberdare Ford had simply become the customers of the Respondent.  His case was supported, at least in part, by the terms of an email that the late Mr Lloyd had sent to the Employment Tribunal Service.  In that email Mr Lloyd had stated:

7.            Mr Martin’s evidence, given for the Respondent, had been to the effect that the Respondent had not acquired the business of Aberdare Ford.  It had, on his account, simply acquired the body shop and it had taken on the former Aberdare Ford staff.  That had been in its own business interest at the time and it had not, said Mr Martin, acquired the economic entity that had been the Aberdare Ford body shop.

8.            Having summarised briefly the relevant law in relation to the transfer of undertakings as set out in the TUPE regulations, and having given an account of the evidence of the witnesses as we have shortly summarised it, the Employment Tribunal said this at paragraph 15 of its written Reasons:

9.            The only issue which was before the Employment Tribunal and the only issue with which we are concerned on this appeal is whether in 2009 there had been a relevant transfer from Aberdare Ford to the Respondent company in terms of the TUPE Regulations.  Those regulations, that is to say the Transfer of  Undertakings (Protection of Employment) Regulations 2006 SI No. 246 provide a definition of ‘relevant transfer’ at regulation 3.1(a) in the following terms:

10.         Mr Beynon was represented before us by Mr Watson of the Free Representation Unit.  We are grateful to him, in particular for the assistance he has given us by way of his written submissions in his concisely stated skeleton argument.  In support of the first ground of appeal “Error of Law” the skeleton argument took us to the decision of this Employment Appeal Tribunal in Cheesman v Brewer Contracts Ltd [2001] IRLR 144 and the approval of the approach of President Lindsey in that case by the Court of Appeal in McCarrick v Hunter [2012] EWCA Civ 1399.  Mr Watson, basing himself on the Cheesman decision, referred to the need for a multi-factorial approach by an Employment Tribunal in determining whether a relevant transfer had taken place.  His submission was that the Employment Tribunal had failed to apply the correct legal test as set down in Cheesman in the present case.

11.         In support of the second ground of appeal, concerned with the sufficiency of reasons, Mr Watson reminded us of the obligation on the Employment Tribunal set out in rule 30(6) of the Employment Tribunal Rules of Procedure requiring it to set out its findings of fact and a statement of how those findings of fact have been applied.  In short, the requirement to give reasons.  He took us to the familiar passage of the judgment of the Court of Appeal in Meek v City of Birmingham [1987] IRLR 250.

12.         Mr Watson’s submission was that the Employment Tribunal had failed to give any reasons as to why it had preferred, and indeed accepted, the evidence of Mr Martin.  Mr Watson’s case was that this had been particularly important in these proceedings because Mr Martin had put no less than three witness statements before the Employment Tribunal and they were inconsistent in material respects.

13.         In addition, Mr Watson’s submission was that, beyond expressing a preference for Mr Martin’s evidence over the evidence advanced by and for Mr Beynon, the Judgment of the Tribunal did not give any reasons for the finding that there had not been a relevant transfer.

14.         As to the third ground of appeal, perversity, Mr Watson concisely submitted that no reasonable Tribunal faced with the inconsistency in Mr Martin’s account could have reached the conclusion, based solely on his evidence, that there had not been a relevant transfer.

15.         We have no hesitation in holding unanimously that this appeal must be allowed.  The question of continuity of employment in this case was central to the determination of Mr Beynon’s claims for compensation for unfair dismissal and his other asserted monetary entitlements. 

16.         On the evidence before it, the Employment Tribunal had a powerful case from Mr Beynon.  He had worked until 2009 in the Aberdare Ford Body Shop.  That body shop had been acquired by the Respondent.  He immediately began working for the Respondent.  They repaired the cars of the same customers.  The Chief Executive of the disposing company had said in writing that the body shop had passed by lease to the Respondent and all their staff transferred at the same time to the Respondent.  Mr Martin had himself accepted in evidence, as the Employment Tribunal note at paragraph 28 of their Reasons, that the Claimant had been employed on the same terms and conditions as those under which he had been employed by Aberdare Ford. 

17.         It does not necessarily follow from that evidence that there had been a relevant transfer.  As indicated by this Appeal Tribunal in the Cheesman case, there are many factors in play that need to be considered in determining whether a relevant transfer has taken place.  The Employment Tribunal accepted the account given in oral evidence by Mr Martin for the Respondent in support of the contrary case.  But they have done so for no discernable reason.  If they had a good reason for accepting the evidence of Mr Martin, notwithstanding the earlier inconsistencies in his evidence, they have not said what it was. 

18.         Mr Beynon is understandably left wondering why, in the face of the inconsistencies in Mr Martin’s written account which were canvassed at the remedies hearing and given the contrary evidence of Mr Lloyd, the Tribunal decided that there had been no relevant transfer.

19.         We need go no further than to hold that the Employment Tribunal erred by fundamentally failing to make relevant findings of fact and, in equally fundamentally failing to set out its reasoning. 

20.         When this matter falls to be reconsidered, the Employment Tribunal determining this case will be required to make findings in accordance with the approach suggested by this Employment Appeal Tribunal in Cheesman; that is to say by taking a multi-factorial approach to the question of whether there has been a relevant transfer.

21.         Having indicated that we allow the appeal, the question arises as to which Tribunal should hear the remitted claim.  We are satisfied that the question of the assessment of the remedy in this case largely turns on the question of continuity of employment and that that question should be remitted to a different Employment Tribunal to determine.

22.         Our order will therefore be that we set aside the Judgment of the  Employment Tribunal in respect of the following paragraphs of its Judgment: in paragraph 1 the whole paragraph shall be set aside, in paragraph 3 there shall be set aside paragraphs 3.1, 3.2, 3.4 and 3.6.  For clarity, therefore, there will remain standing paragraph 2, paragraph 3.3 and paragraph 3.5.  That is our judgment.