Ms C Thompson and Ms M Bramwell-Popham v Bramwell Popham Ltd (in voluntary liquidation): 2201479/2024 and 1600653/2024
JUDGMENT
[1]The complaint of unfair dismissal by claimant 1 is well founded and is upheld (the effective date of termination having been determined as being 31 October 2023).[2]The complaint of unfair dismissal by claimant 2 is well founded and is upheld.[3]The complaint of wrongful dismissal by claimant 1 is well founded and is upheld.[4]The complaint of wrongful dismissal by claimant 2 is well founded and is upheld.[5]The complaint of accrued but unpaid holiday pay by claimant 1 is well founded and is upheld.[6]The complaint of accrued but unpaid holiday pay by claimant 2 is well founded and is upheld.[7]The complaint by claimant 1 relating to failure to pay sick pay for sickness absence in November 2023 is not well founded and is dismissed.[8]Judgment is reserved in respect of the complaint by claimant 2 of failure to inform and consult contrary to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). Case Number: 2201479/2024 & 1600653/2024[9]Judgment is reserved in respect of remedy for all upheld complaints. The claimants have been ordered to provide taxation details for grossing up purposes by 19 August 2025.REASONS
[1]The second claimant is a recruitment consultant and commenced employment with Angela Mortimer PLC (the controlling company of Angela Mortimer Group (AMG)) in January 2009. Her employment was subsequently transferred into a subsidiary company, Bramwell Ross Limited, in July 2019 and thereafter to the respondent in these proceedings, Bramwell Popham Limited, in July 2021. She was appointed as the company’s sole director before being removed by John Mortimer, a majority shareholder, on 12 September 2023, as well as being summarily dismissed from her employment at the time. Other employees of the respondent thereafter commenced employment with INL Consulting Ltd (previously a respondent in these proceedings but against whom all claims have been dismissed upon withdrawal). Tribunal Hearing[2]The first claimant appeared in person. The second claimant was present and represented by Mr Alistair Veck of Counsel. The respondent did not appear, an insolvency practitioner having been appointed and indicated that the respondent does not wish to take any part in the proceedings.[3]I had regard to the hearing bundle comprised of 173 pages and the witness statements and oral evidence of both claimants and Ms Louise Griffiths, Chief Operating Officer at Metronomics Consulting Limited (of which John Mortimer was the sole director) prior to her employment being terminated on 3 November 2023.[4]Oral judgment was given at the hearing in respect of liability regarding all claims except that relating to an alleged failure on the part of the respondent to inform, and potentially consult, the second claimant (the claimant from hereon) in respect of a transfer of the business to INL Consulting Ltd. Judgment was necessarily reserved in respect of remedy given the outstanding judgment on liability. The claimants were not in a position to confirm their tax details for grossing up purposes in any event and were directed to do so to facilitate the relevant calculations. Claim and Issues[5]The claim in respect of which judgment was reserved is made pursuant to Regulation 15 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) for an alleged failure on the part of the respondent to inform, and potentially consult, the claimant about a transfer of the business to INL Consulting Ltd.[6]The issues to be determined are –• whether there was a relevant transfer, namely transfer of an economic entity in which the claimant was employed that retained its identity in the hands of the transferee• whether the claimant was an affected employee with a right to be informed, and potentially consulted, about the transfer pursuant to Regulation 13 of the TUPE Regulations.Findings of Fact
[7]The claimant was appointed as a director of the respondent on 30 June 2021. Her employment transferred from Bramwell Ross Limited to that of the respondent on 1 July 2021.[8]At a general meeting held on 12 September 2023, the claimant was informed by John Mortimer, a majority shareholder of the company, that the company was insolvent and it was suggested she should resign as a director. The claimant did not agree to resign but she found herself immediately locked out of the company’s IT system. That same day, John Mortimer filed forms with Companies House stating the claimant had resigned as a director on 12 September 2023 and he appointed himself as a director with effect from that date.[9]Following the meeting with the claimant, Mr Mortimer met with the remaining employees and informed them the company was insolvent and that they could be employed by a newly created holding company, which transpired to be INL Consulting Limited.[10]The claimant subsequently received notification from Bupa that her private health care with the respondent had been terminated on 21 August 2023. She received a P45 stating that her employment terminated on 31 August 2023 and also notification from Royal London that her pension contributions were stopped in August 2023.[11]The chain of events demonstrates the claimant’s removal from the business as a director and an employee was predetermined, and concrete steps were taken to execute the plan some time before John Mortimer suggested she should resign at the meeting on 12 September 2023.[12]Other employees of the respondent were issued with fresh employment contracts with INL Consulting Limited, and all but the first claimant resigned shortly thereafter. The first claimant had her employment with the company terminated while she was on a period of sickness absence in November 2023.[13]A preliminary hearing was listed to determine whether there had been a relevant transfer from the respondent to INL Consulting Ltd within the meaning of Regulation 3(1)(a) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The claimants withdrew all claims against INL Consulting Ltd at the preliminary hearing held on 9 May 2025. The Legal Position[14]By virtue of Regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), a relevant transfer occurs where there is a transfer of an economic entity which retains its identity following the transfer. Under Regulation 13, representatives of affected employees, or employees directly in certain circumstances, have a right to be informed, and sometimes consulted, about the planned transfer before it takes place. Failure to inform (and consult where relevant) affected employees’ representatives, or the affected employees directly in prescribed circumstances, gives rise to an employment tribunal claim pursuant to Regulation 15.[15]The relevant statutory provision in Regulation 3 provides as follows: A relevant transfer 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;[16]The relevant statutory provisions in Regulation 13 provide as follows – Duty to inform and consult representatives 13.—(1) In this regulation ….. references to affected employees, in relation to a relevant transfer, are to any employees of the transferor or the transferee (whether or not assigned to the organised grouping of resources or employees that is the subject of a relevant transfer) who may be affected by the transfer or may be affected by measures taken in connection with it; and references to the employer shall be construed accordingly. (2) Long enough before a relevant transfer to enable the employer of any affected employees to consult the appropriate representatives of any affected employees, the employer shall inform those representatives of— (a)the fact that the transfer is to take place, the date or proposed date of the transfer and the reasons for it; (b)the legal, economic and social implications of the transfer for any affected employees; (c)the measures which he envisages he will, in connection with the transfer, take in relation to any affected employees or, if he envisages that no measures will be so taken, that fact; and (d)if the employer is the transferor, the measures, in connection with the transfer, which he envisages the transferee will take in relation to any affected employees who will become employees of the transferee after the transfer by virtue of regulation 4 or, if he envisages that no measures will be so taken, that fact.[17]The relevant statutory provisions in regulation 15 are as follows Failure to inform or consult 15.—(1) Where an employer has failed to comply with a requirement of regulation 13 or regulation 14, a complaint may be presented to an employment tribunal on that ground— (a)in the case of a failure relating to the election of employee representatives, by any of his employees who are affected employees; (b)in the case of any other failure relating to employee representatives, by any of the employee representatives to whom the failure related; (c)in the case of failure relating to representatives of a trade union, by the trade union; and (d)in any other case, by any of his employees who are affected employees. (8) Where the tribunal finds a complaint against a transferor under paragraph (1) well-founded it shall make a declaration to that effect and may— (a)order the transferor, subject to paragraph (9), to pay appropriate compensation to such descriptions of affected employees as may be specified in the award;[18]The Employment Appeal Tribunal has provided some assistance in connection with those who may be included within the definition of ‘affected employee’ – In UNISON v Somerset County Council [2010] IRLR 207 it suggested a common sense and pragmatic interpretation of 'affected employees'. Thus, 'affected employees' means: ''those who will or maybe transferred or those whose jobs are in jeopardy by reason of the proposed transfer, or who have job applications within the organisation pending at the time of the transfer. We do not think that the definition extends to the whole of the workforce, nor to everyone in the workforce who might apply for a vacancy in the part transferred in the future'.' In I Lab Facilities Limited v Metcalfe UKEAT/0441/10 (6 April 2011, unreported) an employer facing insolvency contemplated transferring both parts of his undertaking. Eventually, however, the appointed liquidator transferred only one part, the other being closed down. The EAT held that employees employed in the part of the business which closed down and did not transfer were not ‘affected employees’ for the purposes of information and consultation under TUPE. The phrase, held the EAT, was not apt to cover a case of this kind of indirect impact where the transfer had no impact on the employees.Conclusions
[19]I am mindful of the fact the respondent has not appeared to defend the claim but nonetheless, for the claim to succeed, I have to be satisfied, on the claimant’s case, that TUPE obligations were triggered by a relevant transfer and the claimant had a right to be informed/consulted as an affected employee.[20]The claimant asks the tribunal to find there was a relevant transfer and that she was an affected employee, with a right to be informed, and potentially consulted, prior to that transfer taking place. The difficulty with that lies in the way the claimant has chosen to pursue her complaints. Firstly, a preliminary hearing was fixed to determine the very issue of whether there had been a relevant transfer but the tribunal was not, in the end, called upon to make such determination and the claims were withdrawn against the purported transferee, INL Consulting Ltd. That aside, I consider the fact of the claimant having withdrawn her complaints against the purported transferee is fatal to this claim succeeding for the following reasons. The TUPE Regulations transfer liability to the transferee in respect of employees dismissed by the transferor in advance of the transfer, where the sole or principal reason for the dismissal was the transfer itself or a reason connected with it (other than an Economic, Technical or Organisational (ETO) reason). The last paragraph of the claimant’s particulars of claim states “the claimant seeks damages as compensation from either the first or second respondents, depending on liability should TUPE apply”, recognising that the liability of one or other was dependent on whether TUPE applied. By pursuing the unfair dismissal claim against the purported transferor the claimant has effectively conceded liability for her dismissal did not transfer, which is incompatible with any argument she was dismissed because of a relevant transfer, or for a reason connected with it (other than an ETO reason). To be an ‘affected employee’, a non-transferring employee must be directly affected by the transfer in some way, such as their job being in jeopardy by reason of the proposed transfer (my emphasis). Whatever the claimant’s reasons for continuing solely with the claims against the ‘transferor’, the decision to do so brings with it the pitfall of being precluded from arguing there was a relevant transfer in respect of which she was directly affected, bringing with it a right to be informed/consulted.[21]In the circumstances, I am not satisfied there was a relevant transfer, but should I be wrong about that, I am not satisfied the claimant was an affected employee. To conclude otherwise would be irreconcilable with liability for the claimant’s dismissal resting with the respondent ‘transferor’. Procedural failings for unfair dismissal for a reason unconnected with any transfer will be dealt with as part of the remedy judgment in respect of the ordinary unfair dismissal claim that was upheld, and for which a separate judgment has already been issued.Conclusions
[1]The respondent shall pay to the first claimant a total of £54,641.13, calculated as follows: Basic award 5 weeks x statutory cap on gross weekly pay of £643 3215 (by virtue of s124A and s118(1)(b) ERA 1996 an ACAS uplift is not applied to the basic award) Damages for wrongful dismissal Loss of earnings – 3 x net monthly pay of £2400 7200 Failure to follow statutory procedures – uplift 25% 1800 Total damages 9000 Compensatory award Loss of earnings – 8 x net monthly pay of £3552 28416 Loss of benefits (medical insurance) 600 Unpaid commission 861.05 Loss of statutory rights 500 Accrued holiday pay – 4.5 days @ £110.77 (net pay) 498.47 Pension loss (employer’s contributions) 12 months x £112.50 1350 Failure to follow statutory procedures – uplift 25% 8056.38 Total compensatory award 40,281.90 Grossing up of taxable (net) awards above £30,000 £21,146.90 less personal allowance of £12,570 = £8,576.90 @20% = £10,721.13. Add back £12,570, £30,000 and £1350. Final award after grossing up 54,641.13[2]The respondent shall pay to the second claimant a total of £111,892.15, calculated as follows: Basic award 15.5 weeks x statutory cap on gross weekly pay of £643 9966.50 (by virtue of s124A and s118(1)(b) ERA 1996 an ACAS uplift is not applied to the basic award) Damages for wrongful dismissal Loss of earnings – 3 x net monthly pay of £4395.13 13185.39 Failure to follow statutory procedures – uplift 25% 3296.35 Total damages 16481.74 Compensatory award Loss of earnings – 9 x net monthly pay (with commission) 49996.17 of £5,555.13 Loss of benefits (medical insurance) 1800 Loss of statutory rights 500 Accrued holiday pay – 12 days x £202.85 (net pay) 2434.20 Pension loss (employer’s contributions) 12 months x £312.50 3750 Less ex gratia payment (3208.33) Failure to follow statutory procedures – uplift 25% 13368.01 Total compensatory award 68640.05 Grossing up of taxable (net) awards above £30,000 £61,338.29 less personal allowance of £12,570 = £48,768.29. (£37,700 @20% = £47,125; £11068.29 @40% = £18,447.15) – total grossed up amount £65,572.15. Add back £12,570, £30,000 and £3750. Final award after grossing up 111,892.15