Mr J Dunne v The Taunton Cider Company Ltd (In Creditors Voluntary Liquidation) and Heritage Cider Ltd: 1405184/2023

EMPLOYMENT TRIBUNALS

Case No 1405184/2023

Between

Mr Jonathan DunneClaimant

(1) The Taunton Cider Company Limited (In Creditors Voluntary Liquidation) (2) Heritage Cider LimitedRespondent

Before

Employment Judge Midgley

Mr S Harding (instructed by Counsel) for claimant

Date 5 December 2025

REASONS

Summary

[1]This Judgment determines whether the claimant’s employment transferred as a consequence of Regulations 3 and 4 of 15 of the Transfer of Undertaking (Protection of Employment) Regulations 2006 (“TUPE”) from the First Respondent to the Second Third Respondent. That issue was set down by Judge Roper on 12 June 2024 for determination at this hearing The Proceedings

[2]By a claim form presented on 19 September 2023 the Claimant brought claims of automatically unfair dismissal contrary to Regulation 7(1) TUPE, unfair dismissal contrary to section 111 of the Employment Rights Act 1996, breach of contract relating to notice pay pursuant to the Employment Tribunals Extension of Jurisdiction (England & Wales) Order 1994, and claims of failure to inform or consult contrary to regulations 13, 14 and 15 TUPE.

[3]The First Respondent failed to enter a response to the claims. The Second Respondent entered a response on [date] it argued “The defendant never worked for our company, nor did he ever apply for or was considered for a role;” but its argument in this hearing was predicated on the grounds that TUPE did not apply because: 3.1. The First Respondent ceased trading in May 23 when it was determined that the business could not be saved and/or sold as a going concern; 3.2. as soon as the company ceased training, the staff and directors were made redundant; 3.3. the claimant and others made representations to buy assets; 3.4. The Second Respondent bought several assets from the liquidator but that did not represent a business or a separate identifiable part of the business.

The Issues

[4]The claims were considered by Judge Roper at a case management hearing 12 June 2024, who identified the claims and issues. He listed the case for a preliminary hearing and identified the following specific issues for determination: 4.1. Was there a transfer of undertakings between the First Respondent and the Second Respondents. 4.2. Did the Claimant’s employment transfer from the First to the Second Respondent by reason of the Transfer of Undertakings (Protection of Employment) Regulations 2006 under reg. 3(1)(a) TUPE, by one or more transactions? 4.2.1. Was there an economic entity before the transfer? 4.2.2. Did that economic entity transfer to the Second Respondent? 4.2.3. If so, did the economic entity retain its identity? 4.2.4. Was the Claimant employed, immediately before the transfer, by the transferor and assigned to the organised grouping of resources or employees that were subject to the relevant transfer (reg. 4 TUPE) 4.3. In that event is liability for his claims transferred to the second respondent under Regulation 4(2); do either of Regulations 8(6) or 8(7) apply, as to which the tribunal will consider 4.3.1. when the appointment or institution of a creditors voluntary liquidation (“CVL”) of the first respondent occurred (the Liquidator and Companies House both suggest that this was 22 May 2023); 4.3.2. did any transfer occur before the CVL; 4.3.3. was any CVL within the definition of insolvency proceedings “not with a view to the liquidation of the assets” of the first respondent so that Regulation 8(6) applies, or 4.3.4. analogous insolvency proceedings instituted with a view to the liquidation of the assets of the first respondent and therefore falling within Regulation 8(7) so that Regulations 4 and 7 do not apply. 4.4. The claimant did have two years’ continuous service and the questions which the Tribunal will have to address are: 4.4.1. Has the claimant produced sufficient evidence to raise the question whether the reason for the dismissal was the TUPE transfer? 4.4.2. Has the respondent proved its reason for the dismissal, namely redundancy? 4.4.3. If not, does the Tribunal accept the reason put forward by the claimant or does it decide that there was a different reason for the dismissal? Procedure, hearing and evidence

[5]I was provided with following documents for the hearing: 5.1. An agreed bundle of 640 pages 5.2. A statement from the claimant 5.3. A statement from Mr David Syms for the Respondent 5.4. A skeleton argument and supporting authorities from Mr Harding on behalf of the claimant.

[6]I took time to read the statements, the documents referred to in them and the skeleton arguments.

[7]In breach of Orders, Mr Crowley had not prepared a written argument relating to the issues. I therefore directed that the Second Respondent’s case for the hearing would be constrained to the pleaded case, subject to any amendment application.

[8]I then sought to clarify with the parties’ representatives the extent to which there was agreement in relation to the economic activities of the First Respondent and the extent to which they were continued by the Second Respondent. I adjourned so that Mr Crowley could take instructions in relation to those matters. Following the adjournment Mr Crowley verbally set out the Secondment respondent’s position in relation to those matters. I asked him to address those matters fully in a written document.

[9]I provided a concise chronology of events as they appeared from the pleadings and the documents and asked the parties whether the chronology could be adopted as agreed facts. The parties consented to that course.

[10]The ‘Agreed Facts’ below reflect the agreed chronology and the agreement as to the various economic activities of the First and Second Respondents (again as detailed below).

[11]Mr Dunne gave evidence and was cross-examined. I found him to be an honest and credible witness.

[12]During his evidence, the claimant discovered that the High Court had granted the claimant’s application for Mr Hyams to be removed from his position as the Insolvency Practitioner appointed to oversee the liquidation of the First Respondent. The parties asked for time to consider the effect of that Order. The hearing was adjourned with the agreement that Mr Syms would give evidence the following morning and the respondent would provide a written summary of its position in relation to any argument relating to Regulation 8 of TUPE.

[13]Mr Crowley also asked to take further instructions in relation to the additional details of the First Respondent’s economic activities and his role in relation to them as had been described by Mr Dunne. He proposed to address that in his written argument which he would present the following day.

[14]On the morning of the second day, Mr Crowley provided me with his written summary of the Second Respondent’s position in relation to the issues for the hearing. That identified that the Second Respondent asserted that: 14.1. The First Respondent dismissed all its employees including the claimant on 5 May 2023. He argued that the claimant received a letter that day confirming his dismissal. 14.2. The Second Respondent commenced trading on 10 May 2023. 14.3. The First Respondent’s employees were not employed immediately before the transfer for the purposes of Regulation 4 TUPE. 14.4. The claimant was not assigned to any organised grouping of employees who were assigned to any economic activity which transferred to the Second Respondent. 14.5. That the Second Respondent did not purchase all of the First Respondent's assets, some were bought by third parties. 14.6. The undertaking of the Second Respondent was a much smaller economic entity than that of the First Respondent and that that would constitute and economic, technical or organisational (“ETO”) reason for their dismissal.

[15]Mr Crowley further confirmed that he was abandoning all arguments in relation to Regulation 8 TUPE.

[16]Mr Harding noted that the Second Respondent had not pleaded any ETO defence and that if it wished to rely on such a defence at the final hearing, it would need to apply to amend its response.

[17]I set out what I understood the parties agreed as to the First Respondent’s economic activities. Mr Harding applied for the claimant to give some additional evidence in relation to those matters, in the hope that they might also be agreed. Mr Wosley agreed to that course; I therefore heard further evidence from Mr Dunne and Mr Wosley was permitted to ask further questions by way of crossexamination.

[18]Mr Syms then gave evidence. As detailed below, I did not find Mr Syms evidence to be entirely candid; it was at times obtuse as I have detailed in the findings below.

[19]I heard submissions from the parties on the morning of the third day. I took time for consideration and handed down an extempore Judgment. The Relevant Facts The agreed facts

[20]The parties agree that the first respondent, hereinafter referred to as (“the Company”) carried out the following activities, all of which form part of the Company’s economic undertaking: 20.1. The operation and maintenance of an orchard, owned by Sewley Ltd; 20.2. The harvesting, pressing and fermentation of apples, and the storage of the consequent juices; 20.3. The production and packaging of cider: the conversion of base cider into ciders in bottles, kegs or pouches in three forms: 20.3.1. the conversion of the Company’s base cider from its apples or those that it had bought into products sold under its label; 20.3.2. the conversion of third parties’ apples into base cider, sold under the third parties label; 20.3.3. the conversion of third parties’ base cider into products sold under the Company’s labels. 20.4. Retail and marketing of the products, nationally and internationally and online through the preparation maintenance and application of a database and Company’s goodwill. This included the use of a horse box and roller bar for events at which the Company’s products were sold and promoted. 20.5. The management of financial accounts and returns consequent to those activities.

[21]The production and packaging of cider and its retail and marketing were undertaken from warehouse premise located on Cutliffe Farm, Taunton. The Orchard was at a separate location, and the pressing of apples was undertaken either at Cultiffe farm, or at a third-party’s venue. The warehouse was rented from Mr Paris, who owned the farm.

[22]The company employed the following employees to perform those activities: 22.1. Mrs Alison Simpson the Founding Director of the Company and the majority shareholder of the company. There was no direct evidence as to which function is any Mrs Simpson undertook on behalf of the company. 22.2. The claimant, Mr Dunne, who was also a Founding Director, oversaw the staff responsible for the operation and maintenance of the Orchard; additionally, he was heavily involved in the harvesting pressing and fermentation processes, again overseeing other staff members who assisted with those activities (as detailed below). He headed the sales operation for the Company, in particular his functions included: 22.2.1. Primary responsibility for negotiating white label deals with third parties; 22.2.2. Primary if not total responsibility for negotiating distributor contracts. He signed up small breweries, and setting up distributors abroad in locations such as Sweden, Holland, Belgium, Singapore, Switzerland, Austria and the USA. 22.2.3. Primary responsibility for Marketing: he designed the respondent’s packaging, merchandise and marketing, and distributed email and online adverts and campaigns; he maintained the Company’s social media sites and conducting interviews with the press. He represented the Company at trade meetings, and ran the respondent’s horse box and/or roller bar at events. 22.2.4. He would assist with distribution if required. 22.3. Mr Shane Fisher, the Company Bookkeeper with effect from 24 March 2021, who maintained Taunton’s financial books and accounts prepared the tax returns and other associated activities. 22.4. Mr Edward Down, the Production Manager, who was employed with effect from May 2021, who undertook Orchard management duties and oversaw the production of ciders. 22.5. Mr Doug Farrell, who was employed from 29 March 2021 and who undertook the delivery of products and assisted in the warehouse and with sales. 22.6. Mr Oliver Hunt, who was employed from October 2020, working in the warehouse assisting with the packing of products for delivery. 22.7. Miss Georgia Simpson, Mrs Simpson’s daughter, assisted with Sales and marketing, and was appointed as a director with effect from 15 March

[23]Some of those activities were seasonal; by way of example the maintenance of the Orchard, the harvesting and pressing of apples were activities primarily focused in the period late September to December when the apples were ready. Once the apples were harvested and pressed in the warehouse, in the period January to May there was little direct involvement required beyond maintenance and analysis of the product. Retail was an all-year-round activity, as were marketing and maintenance of the respondent’s database and application of its goodwill.

[24]The Company would engage contractors to assist during busy times, by way of example Malcolm Lawrence was engaged to assist with Orchard maintenance and or harvesting, and the company engaged contractors to drive tractors and trailers necessary to transport the apples from harvest to the warehouse. The Company’s Assets

[25]The company had the following assets which were in its direct control (ownership is indicated as appropriate): 25.1. The right to maintain and harvest the apples from the Orchard at a price (which was owned by Stewley Somerset Limited, ownership was transferred to Mr A Twczyniak on 12 October 2022 as security for an investment he had made) 25.2. A lease in respect of the office premises in Taunton and the warehouse at Cutliffe farm. 25.3. In its warehouse at Cutliffe Farm: 25.3.1. Four stainless steel tanks and a mixer tank, these were wholly owned by the Company; 25.3.2. Ten 30,000ltr plastic tanks which the Company had acquired in 2018 through a lease purchase made with Armada Asset Finance, in respect of which it was making ongoing payments 25.3.3. Various valves and pipework which were wholly owned by the Company 25.3.4. The base cider contained in the tanks 25.3.5. The bottled cider ready for sale 25.4. An apple Harvester which had been bought for £18,000 25.5. A horse box, converted for use as a bar which had been purchased at a cost of £9,840.00; 25.6. The Intellectual Property in the Company’s labels and brands 25.7. The Company’s goodwill and customer information contained in its databases 25.8. Its workforce and their expertise

Findings of fact

[26]I make the following findings of fact on the balance of probabilities in light of the evidence of the witnesses that I heard and the documents that were presented to me.

[27]The claimant invested significant sums from a family trust into the Company. Additionally, Mr Twczyniak, who was then living in Canada, invested huge sums to support the business in the form of unsecured loans; the Company’s accounts (as at 31 March 2023) detail a loan exceeding £360,000 and a separate charge of £90,000.

[28]Mr Twczyniak had known the claimant for more than 20 years at the time of the events which form the subject of these claims.

[29]The national restrictions consequent to the Covid 19 pandemic had a disastrous impact on the Company’s financial affairs given that it was no longer able to sell it products during the period of those restrictions to pubs. In consequence the claimant sought to develop the Company’s online sales and to increase international sales and distributors.

[30]In approximately late 2021 or early 2022, it was discovered that the claimant’s family solicitor had embezzled significant sums from the family trust with the result that a bank sought possession of the claimant’s family home. The claimant’s relationship with Mrs Simpson, his partner, underwent a catastrophic breakdown; Mrs Simpson was unable to be present in the same room or office as the claimant. In consequence from February 2022 the claimant no longer attended the office, and it became increasingly difficult for him to undertake activities at the warehouse.

[31]At about the same time, Mr Richard Paris, the owner of the Warehouse at Cutliffe Farm, notified the claimant of his desire for the Company to surrender possession of the warehouse within approximately 12 months.

[32]On 4 August 2022 the Company bought a grouse Apple Harvester for £18,000. At about the same time the claimant’s relationship with Mrs Simpson had reached crisis point.

[33]In September 2022, Mr Twczyniak asked Mr David Syms to appraise the Company. At that time, Mr Twczyniak was still living in Canada. Shortly thereafter, in recognition of Mr Twczyniak’s investment in the Company, the Company assigned its rights in the Orchard to him on 12 October 2022. The appointment of Mr Syms

[34]In approximately January 2023, Mr Twczyniak persuaded Mrs Simpson to accept the appointment of Mr Syms as a consultant to assist the Company. Mr Syms had over 20 years’ experience in alcohol sales, having worked for Whitbread. He was also a long-standing friend of the claimant for 40 years, and the claimant was the godfather to his eldest son.

[35]Mr Syms was however not appointed as an employee of the Company but was paid by Mr Twczyniak. He worked between two and a half and three days a week in the Company’s office.

[36]There is a dispute as to the scope and nature of Mr Syms’ involvement. Mr Syms suggests that it was limited solely to sales, and that he had no direct knowledge or involvement in the Company’s financial affairs and/or management and had no access to the data systems it used to record its transaction or sales. The claimant asserts that he was engaged as a consultant to review and oversee all functions of the Company’s operation.

[37]I unhesitatingly prefer the claimant’s case on this issue. That is because Mr Syms’ statement records that he was engaged to “appraise the company”. Mr Syms sought to suggest that that phrase could only be construed in relation to the activity of sales. That strains the ordinary English language to breaking point. In addition, I reject as implausible the suggestion that Mr Twczyniak, who was then at more than arm’s length from the Company, would engage Mr Syms solely in relation to sales; in my judgement Mr Twczyniak would want to know, from an independent third party whom he trusted, what the Company’s financial position was, what its trading position was, and what it sales prospects appeared to be. Indeed, Mr Syms’ evidence was that Mr Twczyniak had told him of the precarious financial position of the company and his refusal to invest further sums without tangible security or support.

[38]That, I find, was the purpose with which Mr Twczyniak engaged Mr Syms – to discern and report to him as to whether the Company was viable and whether it could be rescued or improved. Furthermore, I find it inherently implausible that Mr Syms could undertake any effective sales role or review of the sales process without access to the Company’s databases; at the very least it would be necessary for Mr Syms to know how much of each product the Company had, and what the applicable sales prices and margins were in order to fulfil his sales role.

[39]I found Mr Syms’ evidence as to the extent of his knowledge of the Company’s financial position to be inconsistent, contradictory and unsatisfactory. The Second Respondent and the acquisition of the Company’s Assets

[40]On 6 January 2023 the Second Respondent, Heritage Cider Limited (“Heritage”) was incorporated by Mr Syms. He was the sole director and shareholder.

[41]It is clear to me that Mr Syms’ role, as the consultant appointed by Mr Twczyniak, included the need to identify assets which could be treated as security for the loans made to the Company by Mr Twczyniak, so as to protect his investments insofar as was possible if the Company were placed into administration.

[42]In consequence, between 26 January and 14th March 2023, Mr Syms purportedly purchased the Company’s cider stocks through the vehicle of Heritage, using funds secured by Mr Twczyniak through a third party, namely Lapwing Advisers Limited. Thus, invoices were issued dated follows: 42.1. on 26 January 2023 £30,000 for 150,000 litres of the Company’s base cider and fermenting juice. This was paid on 27 January 2023 by Lapwing. 42.2. on 14 February 2023 £27,000 for 38,000 bottles of the Company’s bottled cider and inclusive of a delivery charge of £333.22. This was paid by Lapwing on 16 February 2023. 42.3. on 14 March 2023 £40,000 for the Company’s fruit cider and 2000 bottles of white label cider. This was paid by Lapwing on 16 February 2023. (Collectively “the Stock”)

[43]Invoices in respect of first two of those sales were prepared between 6 and 7 of March, although Mr Fisher backdated them to 26 January and 14th February respectively. The invoice in respect of the last was issued between the 29th and 30th of March but backdated by Mr Fisher to show 14 March.

[44]The agreement reached in respect of the sale of the Stock was that the Company retained the right to sell the Stock and to hold the profits from the sales. The Stock remained in the Warehouse.

[45]Similar actions were taken in respect of other of the Company’s assets.

[46]On 12 January 2023 Mr Fisher paid £4,000.00 to the Company. The payment is recorded as “SF loan”. Seven days later, on 19 January 2023, Mr Syms paid £6,500.00 to the Company. The payments were made for the Company’s Harvester and Horse box. Given that the Harvester was then a little older than four months old, it is difficult indeed to see why it was sold for £4,375.00 plus VAT. In the same vein, the Horsebox had been used at events and was well maintained and presented; it is therefore difficult to see why an appropriate resale value would have been less than half the cost of its initial purchase, excluding the cost of its preparation as a bar.

[47]Mr Syms’ explanation was that Mrs Simpson was desperate for funds for the Company, that Mr Twczyniak had refused to invest any further funds, and that the agreement was that the horsebox and harvester would continue to be held for use by the Company, but would be owned by Mr Fisher and Mr Syms in a personal capacity until such time as the Company was in a position to repurchase them.

[48]Again, I reject that explanation. That is because Mr Twczyniak had arranged in the same period for a payment of £30,000 to be made through a third party, Lapwing Advisers Ltd, through the front of Heritage, and would provide a further injection of £27,000 into the Company on 14 February. The negotiation of the sale of the stock can only have taken place between Mr Twczyniak and Mrs Simpson; the claimant was not made aware of it and had no part in it. In that context, and when viewed against the additional £40,000 paid in March 2023, the payment of £10,000 is insignificant in terms of a cash injection that would be sufficient to prevent the Company’s descent into administration.

[49]In that context it is appropriate to note that on 14 March 2023 the Company received a Notice of Enforcement (by taking control of goods) from HMRC in respect of a debt of £137,937. I infer from that that the Company had received prior notice of the debt given the letter refers to HMRC not having “received payment for your overdue amount.” Additionally, the Company’s accounts show liabilities for VAT and excise payments exceeding £300,000.00 and non-current liabilities exceeding £700,000.00. Put simply, a receipt of £10,000.00 against that financial position would not even represent a drop in the ocean. The Company’s lease of Atherstone Farm and the transport of tanks to it

[50]On 10 March 2023 the Company, acting through Mrs Simpson, signed a head of terms for a new premises at Atherstone farm. Mr Syms suggests that it was necessary for the Company to surrender the lease at Cutliffe and that the move to Atherstone farm represented a reduced cost to the Company. The claimant’s argument is that it was entirely unnecessary for the Company to relocate if, as Heritage argues, its financial position was one of impending insolvency. Heritage was unable to produce any evidence to demonstrate that the Company had been served with notice to vacate the Cutliffe premises.

[51]In the event the Company paid the deposit of approximately £12,000.00 and the rental of £3,714.00. I accept Mr Syms’ evidence that by this date there were open discussions between him and Mrs Simpson as to the Company’s disastrous financial position. I do not, however, accept his evidence that Mr Twczyniak’s expressed desire from 10 March was for the company to continue to operate as an ongoing concern. Given the Company’s debts and the notice from HMRC that it would take control of its goods in satisfaction of a debt to it, it was obvious to all, I find, that the Company could not trade itself out its insolvent financial state.

[52]On 15 March 2023 Miss Georgia Simpson was appointed as a director with the result, the claimant argues, that she and Ms Simpson could outvote the claimant in relation to the Company’s affairs. The claimant disputes the validity of her appointment, but that and the effect of Miss Simpson’s appointment is not a matter for me.

[53]On 16 March 2023, two events happened: first, Heritage obtained a licence to act as a producer and holder of cider (removing the obligation to pay duty on those sales); it recorded Atherstone Farm as its address. Secondly, the Company signed a tenancy at will for Atherstone Farm (at a rent of £3,174.00 a month, which was due on 20 March but which was paid on 16 March 2023). That was two days after the receipt of the HMRC enforcement notice. The Board Discussion with the Administrators

[54]On 17 March 2023, the Company’s Board consulted with administrators, ‘Insolve Plus,’ in relation to its financial position. The claimant was not informed of the meeting and did not attend. At that meeting the Board was informed that the Company was insolvent to such a degree that if it continued to trade the Directors may face personal liability for debts accrued, and the creditors would be unlikely to agree to a voluntary arrangement given the extent of the debts in question.

[55]The Board therefore expressed its preference for the Company to be placed into Administration and wound up. The administrator agreed to that course with the provision that the purpose of the administration was the hope of securing the sale of the business as a going concern. The Board was told it could only continue to trade if such trade was profitable and would place the Company in a position to meet any debt incurred as a result of that trade. The Board was also told that it must secure the Company’s assets and must not take any step which would place any creditor in a better position through the disposal of assets.

[56]It is worthy of note that the invoice for the sale of bottled fruit and white label ciders was issued 13 days later and was backdated to 14 March 2023, the day that HMRC gave notice of enforcement of the Company’s debt of £137,000.00.

[57]On 17 March the claimant was sent notice of a Board Meeting which was to take place on 21 March to vote on the appointment of an administrator.

[58]Between 21 and 22 March, the Company arranged for its stock (which was then 128,091 litres of base cider) in the tanks and mixer tanks, together with the valves and pipework to be transported to the premises at Atherstone Farm. Mr Down took receipt and set up the tanks and pipe-works for operation.

[59]On 27 March Mr T Hyams was nominated as the Administrator of the Company.

[60]On 25 April the claimant was notified of a board meeting by telephone on 27 April. The following day the online shop was closed. On 27 April Ms Simpson told the claimant at the Board meeting that the company was being placed into a creditor’s voluntary liquidation. The Second Respondent begins to trade

[61]Between late March and May 2023, Heritage took the necessary steps to begin to trade as a wholesaler and producer of ciders. Thus, on 31 March 2023, Heritage applied for an AWRS license as a wholesaler of cider and perry. In the same vein. Mr Syms approached Somerset Cider Solutions to reach an arrangement for Somerset to provide ciders for Heritage’s retail. Somerset was previously a provider to the Company. On 19 April, an agreement was reached for that supply.

[62]Mr Syms negotiated with the owners of Atherstone farm, Dillington Ltd, for the assignment of the lease to the premises. In May 2023, Heritage negotiated for insurance on those premises.

[63]On 5 May Heritage was granted an AWRS license.

[64]On that day, the existing staff who were in the office or warehouse, but not the claimant, who was not present given the difficulties with Mrs Simpson to which I have referred, were handed letters informing them of their dismissal and the Company ceased to trade. The claimant’s dismissal

[65]On 10 May the claimant received a letter from Ms Simpson terminating his employment. I discern the date from the date on the letter itself. The respondent has sought to suggest that the letter was provided earlier, and that the date was included in error. However in the absence of any evidence from the respondent or any other party to demonstrate that the letter was presented earlier or the claimant was notified of his termination earlier, I conclude on the balance of probabilities that the letter is correctly dated and it reflects the date on which it was provided to the claimant, given that he was absent from the office on 5 May 2023.

[66]On the same date, 10 May 2023, Heritage began to trade, selling the Companies stock of bottled ciders which had been purchased in March. Mr Syms undertook deliveries using his own vehicle, a 4 x 4 vehicle. By his admission, he continued to sell to the Company’s clients and to seek to develop and to sell to new clients.

[67]By way of example, on 15 May 2023, Mr Syms emailed Phil McLaughlin, the director of Taunton Cider Products, whom the Company had previously supplied. In that email Mr Syms wrote as follows I have been informed by Ed [Down] you would like some confirmation in writing that Heritage Cider Ltd have acquired all of Taunton Ciders stock. Please accept this email as that confirmation. We can fulfil Orders for currently six months what we have obtained. We are hopeful to purchase the Taunton Cider brand so we can continue to produce and market the same cider for the future. I hope this clarifies for you. If you would like to order, you may contact Ed or myself.

[68]Mr Syms has sought to suggest that Mr Down was not an employee of Heritage at that time and was not working, but simply told him of a message that he had received from Mr McLaughlin. He suggested that Mr Down had passed that information on as a matter of goodwill and that the only reason that he proposed that Mr McLoughlin could contact Mr Down was because of their existing relationship. If, as Mr Syms suggests, the reason for including Mr Down was simply because of his existing relationship with Mr McLaughlin, then there would be no need for Mr Syms to have included himself as a potential contact, he could simply have said “Please continue to deal with Ed he will inform me of any orders that you wish to place.”

[69]I reject that evidence, it is clear to me, particularly from the last paragraph, namely “if you would like to order, you may contact Ed or myself” that Mr Syms was holding Mr Down out as an employee of Heritage, who would be able to process orders on behalf of Heritage. It is the reasonable inference from those matters that Mr Down continued to provide services to Heritage in relation to sales and the processing of orders. The fact that Mr Down was offered a role with Barrow Hill Cider on 17 May does not alter my conclusion in that regard. It is quite possible that Mr Down would be seeking alternative employment, if only for the purposes of negotiating his contract with Heritage.

[70]Heritage has sought to assert that Mr Down, Mr Fisher, and Mr Farrell were not employed until 1 June 2023. It was open to Heritage to call evidence from any of those that it currently employs, so as to address the question of when they began activities for Heritage. It has not done so, nor has it produced any evidence of any discussion or contract formed with them. Indeed, even in July 2024 it was asserted that none of the individuals had a contract of employment, some 13 months after they were ostensibly employed. I found that astounding and therefore unconvincing evidence. Moreover, Heritage could have provided evidence of the dates on which payments were made to them for wages or entries from its profit and loss accounts showing when payments were made to the three men as employees. Again, it has chosen not to do so.

[71]It is also clear to me from the email above and from the purported date of their appointments that it was intended that Heritage should continue the Company’s activity of processing base cider into retail cider from a very early stage, otherwise there would have been no need to engage Mr Downs (if sale of existing stock was all that was intended), or Mr Farrell (who worked in the warehouse and on deliveries).

[72]Mr Syms sought to suggest that between 10 May and August 2024 he was producing handwritten delivery notes but on the respondent’s pleaded or asserted case, Mr Fisher was employed both as an employee of Heritage from 1 June 2023 and as a Director from 9 June as Executive Director and Finance Controller. It is clear that he continued to run the management or sales and stock recording and invoicing. If further evidence were required to support that conclusion it is provided by Mr Syms’ negotiation with the Administrators through May 2023 for the purchase of the Company’s tanks etc which resulted in a successful agreement on 2 June

[73]On 22 May 2023, the Company was placed into administration and Mr Tony Hyams was appointed as the liquidator. In its initial correspondence with the claimant’s representatives, Heritage sought to assert that it did not trade until after 22 May. By admission, that assertion was inaccurate and false. It is difficult indeed to see how it could have been made honestly; Heritage can have had no doubt about when it began to sell bottle ciders.

[74]On 31 May 2023 the liquidator wrote to employees of the Company, notifying them that they should treat their employment as having been terminated with effect from 5 May 2023 for the purposes of any claim to the RPS for payments out of the National Insolvency Fund.

[75]On 1 June Mr Twczyniak was appointed a Director of Heritage and Mr Syms transferred 90% of the share value of the company to him without cost. The claimant’s involvement in the Company’s activities between January and May

[76]The claimant was candid in his evidence that his involvement in the Company’s activities reduced significantly in that period because he could not be in the office and it was increasingly difficult for him to be in the warehouse. In consequence, he spent more than 3 hours a week liaising (as an overseer) with those who were maintaining the orchard and no more than 10 minutes a day liaising with those in the warehouse to oversee it operations. He had no involvement in production and packaging of cider, which activities had been taken over by Miss G Simpson.

[77]His primary involvement therefore was in relation to sales and marketing, dealing with existing customers and seeking to identify new markets and distributors. He accepted that that process was frustrated by his interactions with Mr Fisher, which became heated and had broken down once a new sales contact had been secured by the claimant, but his evidence that he continued to work about 20 hours a week in the pursuit of such contacts and markets was unchallenged.

[78]In the period January to March 2023, the Company’s sales were consistently at approximately £33,000 a month; less was sold in March given the Company ceased to trade with effect from 5 March. Heritages’ activities and sales

[79]Between May and July 2023, Heritage’s average monthly sales were approximately £16,500. I am persuaded that the claimant’s continued role in sales and marketing was directly connected to those sales.

[80]In the three months from May to August 2023, Heritage sold an average of £16,500 of bottle ciders. Initially, those sales did not include cider produced from base ciders; Heritage has not given evidence to explain when it began to sell them. On 30 June 2023 Heritage was instructed by the liquidator that the only products it could sell were the bottles and bibs bought from the Company.

[81]From August 2023, the horse box was used at events by Heritage.

[82]On 24 August 2023, Heritage completed an asset purchase of the Company’s remaining assets, including the tanks and valves and the base cider contained within them.

The Relevant Law

[83]The relevant statutory provisions are contained in the Transfer of Undertakings (Protection of Employment) Regulations 2006: 3.—(1) These Regulations apply to— (a) a transfer of an undertaking, business or part of an undertaking or business situated immediately before the transfer in the United Kingdom to another person where there is a transfer of an economic entity which retains its identity.

(2) In this regulation “economic entity” means an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary. (6) A relevant transfer— (a) may be effected by a series of two or more transactions; and (b) may take place whether or not any property is transferred to the transferee by the transferor. Effect of relevant transfer on contracts of employment 4.— (1) Except where objection is made under paragraph (7), a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee. (2) Without prejudice to paragraph (1), but subject to paragraph (6), and regulations 8 and 15(9), on the completion of a relevant transfer— (a) all the transferor’s rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this regulation to the transferee; and (b) any act or omission before the transfer is completed, of or in relation to the transferor in respect of that contract or a person assigned to that organised grouping of resources or employees, shall be deemed to have been an act or omission of or in relation to the transferee.

(3) Any reference in paragraph (1) to a person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to a relevant transfer, is a reference to a person so employed immediately before the transfer, or who would have been so employed if he had not been dismissed in the circumstances described in regulation 7(1), including, where the transfer is effected by a series of two or more transactions, a person so employed and assigned or who would have been so employed and assigned immediately before any of those transactions.

[84]In Spijkers v Gebroeders Benedik Abattoir CV: 24\85

[1986] 2 CMLR 296

the ECJ held that: “It is necessary to determine whether what has been sold is an economic entity which is still in existence, and this will be apparent from the fact that its operation is actually being continued or has been taken over by the new employer, with the same economic or similar activity.”

[85]The court in Spijkers laid down specific guidance, stating that it is important to consider, in each case, the following matters, namely:(i) the type of undertaking or business concerned;

(ii) whether assets, tangible or intangible, are transferred;

(iii) whether employees are taken over;

(iv) whether customers are transferred;

(v) the degree of similarity between the activities carried on before and after the transfer and the period, if any, for which those activities are suspended.

[86]Further guidance as to the factors to be considered when assessing whether there was an economic entity and, if so, whether it retained its identity was provided in Cheesman and ors v R Brewer Contracts Ltd

2001 IRLR 144

, EAT, in which the Employment Appeal Tribunal set out the following principles: ''(i) As to whether there is an undertaking … an organised grouping of persons and assets enabling (or facilitating) the exercise of an economic activity which pursues a specific objective … (ii) … such an undertaking … must be sufficiently structured and autonomous but will not necessarily have significant assets, tangible or intangible; (iii) in certain sectors, such as cleaning and surveillance, the assets are often reduced to their most basic and the activities are essentially based on manpower; (iv) an organised grouping of wage-earners who are specifically and permanently assigned to a common task may, in the absence of other factors of production, amount to an economic entity; (v) an activity of itself is not an entity; the identity of an entity emerges from other factors, such as its workforce, management style, the way in which its work is organised, its operating methods and, where appropriate, the operational resources available to it.''

[87]As to the question of whether there had been a transfer, the following factors were highlighted by the EAT in Cheesman: ''(i) … the decisive criteria for establishing the existence of a transfer is whether the entity in question retains its identity, as indicated … by the fact that its operation is actually continued or resumed; … (iii) in considering whether the conditions for … a transfer are met, it is necessary to consider all the factors characterising the transaction in question, but each as a single factor and none is to be considered in isolation; (iv) amongst the matters … for consideration, are the type of undertaking, whether or not its tangible assets are transferred, the value of its intangible assets at the time of transfer, whether or not the majority of its employees are taken over by the new company, whether or not its customers are transferred, the degree of similarity between the activities carried on before and after the transfer, and the period, if any, in which they are suspended; (v) account has to be taken … of the type of undertaking or business in issue, and the degree of importance to be attached to the several criteria will necessarily vary according to the activity carried on; (vi) where an economic entity is able to function without any significant tangible or intangible assets, the maintenance of its identity following the transaction … cannot logically depend on the transfer of such assets; (vii) even where the assets are owned and are required to run the undertaking, the fact that they do not pass does not preclude a transfer; … (x) the absence of any contractual link between the transferor and transferee may be evidence that there has been no relevant transfer, but it is certainly not conclusive as there is no need for any direct contractual relationship; (xi) when no employees are transferred, the reasons why that is the case can be relevant as to whether or not there was a transfer.''

[88]It is not necessary for there to be a contract between the transferor and the transferee for there to be a transfer (see Foreningen af Arbejdsledere i Danmark v Daddy's Dance Hall A/S

[1989] 2 CMLR 51

, ECJ). Multiple transactions

[89]A transfer within the meaning of the Regulations can occur through more than one transaction; furthermore, whether there has been a change of ultimate owner of the business is by no means conclusive as to whether there has been a transfer. Ownership of the business is less important than whether there has been a change in the legal person responsible for the running of the business (see Landsorganisationen i Danmark v Ny Mølle Kro

[1989] ICR 330

, ECJ In the ECJ’s view, ‘the fact that… the transfer takes place in two phases, in the sense that as a first step the undertaking is transferred back from the original lessee to the owner who then transfers it to the new lessee, does not exclude the applicability of the Directive as long as the economic unit retains its identity’.

[90]This view was affirmed by the ECJ in the later case of P Bork International A/S (in liquidation) v Foreningen af Arbejdsledere i Danmark and ors

[1989] IRLR 41

, ECJ.) The date of the transfer

[91]There is no presumption or rule that where a TUPE transfer is effected by a series of transactions, the date of transfer occurs at the end of the series (see Rajput v Commerzbank

[2023] EAT 11

, rather the date of transfer is the date on which responsibility as employer for carrying on the business (which transfers) moves from the transferor to the transferee (see Celtec Ltd v Astley (C-478/03) EU:C:2005:321, [2005] E.C.R. I-4389, [2005] 5 WLUK 696.) Discussion and

Conclusion

[92]As detailed above, the parties are in agreement as to the economic activities and assets of the Company. There is, therefore, no dispute both that there was an economic entity and that the claimant was assigned to various aspects of its functions in 2022, namely (to a limited degree) the maintenance of the orchard, the harvesting and pressing of apples and the production of ciders, and (in large part) to the retail and marketing of the Company’s products.

[93]There is no dispute that Mr Syms continued the economic activity of the marketing, sale and delivery of bottled ciders from 10 May 2022, acting in his capacity as the sole Director of Heritage.

[94]There is a greater degree of dispute as to which, if any, of the Company’s functions beyond that transferred to Heritage, whether the claimant was assigned to any of those functions at the time of the transfer, and, particularly, when the transfer occurred.

[95]Mr Crowley argues for Heritage that there was a series of asset purchases, which fragmented the business of the Company, and which did not constitute a transfer. Additionally, he argues that none of the Company’s employees were employed immediately prior to any transfer, asserting that they were dismissed on 5 May 2023 (including the claimant) and that there can have been no transfer before Heritage began to trade on 10 May 2023. Mr Harding argues that there was no fragmentation of assets, rather Heritage stripped the assets from the Company covertly and unlawfully, but always with the intention of their being used by Heritage to continue the Company’s activities. He argues that the claimant was dismissed on 10 May and Heritage began to trade from that date, such that the claimant’s dismissal and the transfer occurred almost simultaneously. Did that economic entity transfer to the Second Respondent?

[96]I remind myself of the guidance in Spijkers that an economic entity may be identified from “its workforce, management style, the way in which its work is organised, its operating methods and, where appropriate, the operational resources available to it.”

[97]I have carefully considered the Company’s workforce, the organisation of its work and operating methods and, particularly (given the disputes detailed above) its operational resources, and endeavoured to trace when, by whom and how they were held to see whether the economic entity transferred and when.

[98]In my judgment the transfer of the Company’s operational resources in the period January to March 2023 from it to Heritage, Mrs Syms and Mr Fisher is indicative of the functions which transferred to Heritage. I set out the relevant matters below: 98.1. Production of cider from base cider: The Company’s base cider was bought by Heritage at the end of January 2023. The tanks (and the base cider they contained), pipe work and valves were transported to Atherstone Farm between the 21 and 22 March 2023. Heritage made an offer to the Liquidator for the tanks and other assets (including apple harvesting, cleaning and transporting items) on 30 May 2023. They were finally bought on 24 August 98.2. Retail of bottled ciders: The Company’s fruit cider, bibs of cider and bottled ciders were ‘bought’ by Heritage between the end of February and the end of March 2023, although the Company continued to sell them until May 2023. They were transported to Atherstone Farm on 21 March 2023 and were sold by Heritage from 10 May 2023. Mr Syms and Mr Fisher bought the Company’s horsebox bar and harvester (albeit at undervalue and potentially unlawfully given the latter was subject to finance) in February 2023. 98.3. Premises and office equipment: The Company moved from buildings at Cutcliffe to Atherstone Farm. It paid the deposit and rent on the latter premises. The stock ‘owned’ by Heritage was held there and sold from that address. On the date that the lease was signed by the Company, 16 March 2023, Heritage gave the Atherstone Farm address as its address for the purposes of its retail license. The Company’s Board elected to place the Company into liquidation at a Board meeting on 17 March 2023. The Company’s office equipment was transported to the address; it was subsequently bought by Heritage on 24 August 2023 as part of the asset sale but was in use before then by Heritage. Mr Syms negotiated and secured the transfer for the lease to Heritage. 98.4. Marketing, IP and goodwill: Mr Syms continued to market the Company’s products, and to seek agreement to sell the products of other companies (such as Somerset Cider Solutions) directly and online. Specifically, Mr Syms concluded an agreement on behalf of Heritage with Somerset Cider Solutions on 19 April 2023 to that effect. Similarly, in May 2023 Mr Syms confirmed to Taunton Cider Products that Heritage could continue to supply the Company’s ciders to Taunton Cider Products. The Company’s IP (in the form of trade marks) was bought by Heritage from the Liquidator on 24 August 2023.

[99]Furthermore, I have found that the workforce that was assigned to those functions also continued to work for Heritage as follows: 99.1. Marketing and Retail: this function was undertaken by the claimant for the Company. Mr Syms conducted that activity simultaneously and covertly from April 2023, and solely from 10 May 2023. 99.2. Production of ciders: on my findings, Mr Down’s continued to maintain and manage the Company’s base ciders from March 2023. It is unnecessary to determine whether he continued to produce ciders from the Company’s or third parties’ apples or base ciders given the claimant was not involved in those functions from approximately January 2023. 99.3. Bookkeeping and financial accounts: I have found that Mr Fisher continued his work as the Booker Keeper.

[100]The remaining question in respect of this issue is when the transfer took place. In the present case, doing the best I can, it appears that the Company ceased to trade in the main on or about 5 May 2023 because that was the date on which the majority of its employees were purportedly dismissed. The claimant was not dismissed, however, until 10 May, when received the letter notifying him of his dismissal. He continued to seek to find new markets for the Company’s products, new producers whose apples could be converted to ciders, and new buyers for the Company’s products until his dismissal. The Company was placed into liquidation following the appointment of Mr Hyams as its liquidator on 22 May 2023. The liquidator confirmed the dismissal of staff on 31 May 2023.

[101]Heritage did not commence trading until 10 May 2023. If so, did the economic entity retain its identity?

[102]Mr Crowley accepts for Heritage that Heritage began to trade from 10 May 2023. It was impossible for him to suggest otherwise given Mr Syms’s concessions about the sale of the Company’s bottled ciders from that date, predominantly to the existing customers of the Company and those who were known to Mr Syms through his involvement in the sales function of the Company prior to its liquidation.

[103]Mr Syms suggested in his evidence that he had identified other customers and made sales to them after 10 May 2023, but that does not alter the fact that the activity of marketing, selling and delivery of the Company’s bottled and white labelled ciders to its customer base continued after 10 May 2023, and that activity was conducted by Heritage.

[104]There was, as I have recorded, some dispute as to extent to which the production of base cider and the conversion of base cider into bottle cider was continued by Heritage after 10 May and, if so, when. However, given the findings of fact I have made as to the reason for and the involvement of Mr Downs and Mr Farrell at the Atherstone Farm site, and their activities in April and May 2023, and the timing of Heritage’s efforts to purchase the relevant assets (as detailed above), I have concluded that all of those matters indicate Heritage’s intention to continue the production and packaging of ciders. If further email evidence were needed of that intent it is provided in the email from Mr Syms to Taunton Cider Products on 15 May 2023. Once Heritage had secured its AWRS license on 5 May and insurance for the production of cider in June, it endeavoured to sell other products but was thwarted by the liquidator’s email on 20 June detailing the assets owned by Heritage prior to the liquidation and the consequent limitation on what it could sell.

[105]It is also clear to me that the preparation, maintenance of financial records and invoices, and the preparation and submission of tax returns and similar records, consequent to the production and retail of ciders, was continuing with effect from 10 May 2023.

[106]The operation and maintenance of the Orchard and the harvesting of apples from the orchard was largely seasonal, and would not have occurred again until the autumn of 2023 in any event.

[107]I am satisfied having regard to all the circumstances that operation of those activities continued, and therefore that the economic entity retained its identity when Heritage began to trade on 10 May 2023. Was the Claimant employed, immediately before the transfer, by the transferor and assigned to the organised grouping of resources or employees that were subject to the relevant transfer (reg. 4 TUPE)

[108]On the basis of my factual findings relating to the claimant’s activities in the period January to May 2023, I have no hesitation in concluding that he was assigned to the activities of the retail and marketing of the Company’s cider products. To a much lesser extent, he was also assigned to the production and packaging of those ciders, but not from January 2023 onwards.

[109]I must then step back and assess the extent to which that activity (the marketing and retail of ciders) formed a significant part of the claimant’s activities such that he could be said to be assigned to it. That is an easy task given that his evidence, which was almost entirely unchallenged, was that it formed the majority of his work from January to May 2023, although he was assigned to others because they still formed some part of the scope of his contractual duties. The respondent did not put any correspondence in the bundle by which it was communicated to him that he was no longer required to perform them or that he should desist from or cease altogether to continue to work on those activities.

[110]When I consider the predominant activities of Heritage in the period from May to August 2023, I am satisfied that one of the primary activities was the marketing and retail of products because that was a function which was essential to its cash flow and financial viability. Indeed, until it was in a position to produce its own ciders, all it could do was market and sell the Company’s bottled, white label and bib ciders. The production of cider required the necessary production license, equipment and insurance. Heritage’s AWRS license was not obtained until the 5 May and the necessary insurance in or about 1 June 2023. Therefore, for the period 10 May to 1 June at the earliest the main if not the only activities conducted by Heritage were the marketing and retail of the Company’s bottle ciders to its customers. It was not until August that the remaining two tanks of base cider and other assets were sold to Heritage.

[111]I note that Mr Cowley, although he did not and could not concede that those activities were continued by Heritage, did not (putting the matter as gently as I can) seek to argue with any or any real force that I could not or should not draw that conclusion.

[112]Rather, Mr Cowley has sought to argue that the fact that some of the Company’s assets were owned by individuals (such as Mr Fisher and Mr Syms) or by third parties (such as finance companies through loan purchase agreements) operate to prevent those assets and the activities connected to them transferring to Heritage. However, that argument fails given the guidance in Cheesman at point (vii) that “even where the assets are owned and are required to run the undertaking, the fact that they do not pass does not preclude a transfer.” Put simply, the ownership of the assets is just one factor to be considered, but it is not in any event determinative.

[113]In the present case, the assets that were owned by individuals or the finance companies (the horse box and harvester) were not required as a necessary facet of the predominant activity performed by Heritage – the marketing, retail and delivery of cider was not dependent upon them. Heritage owned the bottles of cider which it sold, and from August 2024 it owned the tanks and the base cider in them. It was at liberty to sell both from those dates.

[114]Mr Cowley’s second argument is that the period of time between the 5 and 10 May 2023 operates to prevent any transfer. He very fairly accepted that he could point to no case which was authority for that proposition, but in any event, it is an argument which I reject on two grounds. Firstly, on the facts, the Company did not cease to operate until the appointment of the liquidator on 22 May 2023. The claimant continued to work until 10 May 2023. Secondly, in Celtec Ltd v Astley and ors

2005 ICR 1409

, ECJ, the European Court ruled that the ‘date of a transfer’ in Article 3(1) of the Acquired Rights Directive is a particular point in time when responsibility as employer for carrying on the business of the undertaking moves from the transferor to the transferee. Thus, in many of the authorities relating to Regulation 8 of TUPE (which were initially considered by the parties when that Regulation was in issue) there were periods of days, weeks or even months between the activities of the transferor ceasing, and the commencement of those activities by the transferee. Those delays did not operate to prevent their being a transfer as a result.

[115]The critical point in time is when responsibility for the marketing and retail of cider moved from the Company to Heritage. That was on the 10 May 2023, when Heritage began to trade.

[116]The claimant was not dismissed until he received Mrs Simpson’s letter of 10 May 2023 terminating his employment. He was therefore employed immediately before the transfer. I have concluded on the facts that he was assigned to that part of the undertaking concerned with the marketing and retail of ciders at that stage. Conclusion

[117]The Claimant’s employment therefore transferred to Heritage by consequence of Regulation 3 TUPE, and all liabilities for any dismissal connected to it similarly transferred to Heritage pursuant to Regulation 4 TUPE on 10 May 2023.

[118]Heritage has conceded that the circumstances of this case do not fall within the ambit of Regulations 8(6) or (7) TUPE. It is therefore unnecessary for me to make any determination of the application of those provisions.

[119]The parties have not invited me to determine whether the reason or principal reason for his dismissal was the transfer, nor whether there was an economic, technical or organisational reasons for the dismissal. Those are all matters for determination at the final hearing. Approved by