Z M Gilbertson v AAA Properties Group Ltd T/a Servicemaster and The Enquire Learning Trust T/a Elliston Primary Academy: 2309591/2024
JUDGMENT
[1]The name of the Second Respondent (R2) is changed so it reads as above.[2]There was a transfer of an undertaking consisting of the cleaning services at Elliston Primary Academy (the academy) from the First Respondent (R1) to R2 on or about 7/8/2024[3]The Claimant was assigned to the transferred undertaking[4]The Claimant was unfairly dismissed by R2 and the total award against it is £5291[5]The recoupment provisions apply. R2 must pay the Claimant the sum of £2321.80 by 25th February 2026 and the balance if any remaining when the regulations have been complied with; (see the end of the Reasons below).[6]The claim against the First Respondent is dismissed.[7]The Full Merits Hearing listed for 16th and 17th July 2026 is cancelled.REASONS
[1]The Claimant presented her claim against both Respondents on 10/11/2024. R1 entered a Response but R2 did not. As found by EJ N Wilson at a previous hearing on 14/8/2025, (see para 13 of the CMO of that date) R2 was served with the claim. R2 has failed to enter any defence. EJ N Wilson directed that R2 would be able to participate at further hearings only to the extent that the EJ decides.[2]Today’s hearing was listed to decide the TUPE issue between R1 and R2. For the reasons given below I decided that issue against R2. I decided that R2, which has not shown any interest in these proceedings from the outset, should not be entitled to participate in any further stages of this litigation. Hence there was no good reason to defer dealing with the remaining liability or remedy issues arising in this unfair dismissal claim. The Claimant and Mr Pearson said they were ready and willing to deal with all outstanding issues today and asked me to do so. I decided to treat today’s hearing as a final hearing under Rule 48 as I am satisfied that R2 is not materially prejudiced by my so doing.[3]The Enquire Learning Trust owns and runs numerous schools of which the Elliston Primary Academy (“the academy”). Hence the proper name of R2 is The Enquire Learning Trust and I have changed the name accordingly[4]I was referred to a bundle of 189 pages and heard evidence from the Claimant, Ms Dutton (regional manager of R1) and Mr S Kugathas, (owner and director of R1). Mr Pearson sent me a copy of an unsuccessful job application which the Claimant had made to a possible new employer in January 2025. I received written submissions from Mr Lyon and oral submissions from him and Mr Pearson. The law.[5]The Transfer of Undertakings (Protection of Employment) Regulations 2006 apply to the transfer of an undertaking or business or part of an undertaking or business to another person where there is a transfer of an economic entity which retains its identity (regulation 3(1)(a))[6]An economic entity is an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.[7]In considering whether an economic entity has retained its identity the multifactorial approach should be applied examining a variety of circumstances including(i) the type of undertaking,(ii) whether tangible assets are transferred,(iii) the value of the intangible assets at the time of transfer,(iv) whether the majority of staff are transferred,(v) whether customers are transferred,(vi) whether the activity is similar before and after, and(vii) the duration of any suspension/disruption. Single factors should not be considered in isolation.[8]Whether or not there has been a deliberate attempt to circumvent the regulations can be a relevant factor, and in some cases may be decisive.[9]It is necessary to consider whether the business was disposed of as a going concern, as would be indicated inter alia by the fact that its operation was actually continued or resumed by the new employer, with the same or similar activities.[10]A business can still retain its identity even if the means of performing it is not identical after the transfer and even where, after transfer, the elements transferred are incorporated into a different organisational structure. This “stability” should be assessed as a matter of practical and industrial reality.[11]A transfer under the regulations can occur in some cases even where neither assets nor employees are taken on by the transferee. The decisive criterion is whether the business in question retains its identity.[12]In Dudley Bower Building Services v Lowe [2003] IRLR 260 a package of maintenance duties which had been almost exclusively performed by a single employee had amounted to a stable economic entity capable of being transferred.[13]The regulations apply also to a service provision changeover where immediately prior to the changeover there was an organised grouping of employees (or a single employee) whose principal purpose was to carry out those activities (reg 3(1)(b) and the client intends that following the transfer the transferee will carry on the activities on the clients behalf other than in connection with a specific event or task of short term duration (reg 3(3)) and the activities do not consist wholly or mainly in the supply of goods for the clients use. A service provision change of this kind includes situations in which (per reg 3(1)(iii) (iii) “activities cease to be carried out by a contractor or a subsequent contractor on a client’s behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by the client on his own behalf”,[14]Where a relevant transfer occurs it does not terminate the employment contract of any person employed by the transferor who is assigned (other than merely temporarily) to the transferred undertaking or organised grouping and the contract has effect as if originally made with the transferee. ie the existing contractual terms are preserved with uninterrupted continuity of service and the transferee inherits other liabilities and obligations connected with the employment of those who transfer. Particular provisions relate to pensions.[15]An employee does not need to work solely for the transferee (or the part of the business being transferred) to be assigned to the economic entity. The requirement is that the employee is "assigned" to the organized grouping of resources or employees that is subject to the transfer. Usually an employee is assigned if they spend the majority (50% or over) of their working time on the transferring business or contract. However assignment is a question of fact that depends on more than just a simple percentage calculation. Relevant considerations are:(i) How much time is spent on the transferring work(ii) whether the employee was intentionally or formally allocated to the grouping. (iv) how the costs of the employee's work are allocated and the employee's job description. If an employee divides their time between a part of the business that is transferring and a part that is staying behind, they may still be deemed to be assigned to the transferring entity if that is their primary role.[16]Where before or after a relevant transfer any employee is dismissed that dismissal shall be unfair if the transfer or a reason connected with it is the reason or principal reason for the dismissal. However if the reason or principal reason for dismissal is an economic technical or organisational (ETO) reason entailing changes in the workforce of the transferor or transferee before or after the transfer, the dismissal shall be treated as being redundancy or SOSR and subject to the test of fairness now set out in section 98(4) of the Employment Rights Act 1996Findings of fact
[17]The claimant was a cleaner employed by HCMC Ltd from 1 June 2016. She worked at different sites for different clients of HCMC Ltd.[18]On 1st December 2021 a TUPE transfer took place from HCMC Ltd to R1 of an entity referred to as “the housekeeping function”. The Claimant was transferred and became an employee of R1.[19]From December 2021 until she went on maternity leave in September 2022 she worked mainly at the academy and other sites (Stoneacre and Toyota) operated by third parties.[20]The Claimant returned from maternity leave on 25 September 2023. By then R1 had lost the Toyota contract and the Claimant reduced her hours to ten per week, working at the academy only.[21]During the period September 23 to July 24 she did short ad-hoc jobs as an R1 employee for third parties on two occasions only. Overall, she spent 98% of her working time at the academy. This has been confirmed by her payslips which show the work location, and by the evidence of the Claimant and Ms Dutton.[22]During 2024 prior to the changes described below there were 5 employees of R1 working at the academy as cleaners. Paula, Kirsty and Tamsin spent 100% of their working time there. Jess did one short ad-hoc job for a third party but spent 99% of her working time at the academy. No-one apart from R1 employees did the cleaning there.[23]In May 2024 R1 lost the contract to do the cleaning at the R2 premises, with effect from 7/8/2024. R2 took the cleaning at the academy back in house. Paula was taken on by R2 to carry on cleaning there, but the other four R1 employees (including the Claimant) were not.[24]In June 2024 R2 advertised for the recruitment of cleaners at the academy. The job description describes the same role which the claimant and her four colleagues were doing at that time at the academy.[25]The Claimant carried on working at the academy until the 23rd of July 2024, when the school closed for the summer and R1 moved its equipment out. The R1/R2 contract expired in August 24.[26]The Claimant tried to get R2 to take her on but was refused. She was told that she had not applied in time. Conclusions arising from the above facts[27]There was an organised group of employees of R1 dedicated to doing the cleaning at the academy. They did very little or no other work in the relevant period of about a year running up to 7 August 2024. The cleaning work carried on at the academy after that date was the same. A service change TUPE transfer of an undertaking to which the Claimant was assigned took place on or about that that date.[28]By operation of law the Claimant ceased to be an employee of R1 and became an employee of R2 on that date, whether or not she had applied to be taken on by R2.[29]By disputing that TUPE had applied and by refusing to recognise the Claimant as its employee after 7/8/24, R2 dismissed the Claimant on or about that date.[30]The dismissal was automatically unfair because the transfer was the reason for the dismissal.[31]No procedure whatsoever was carried out so the dismissal was also contrary to the ACAS code.Remedy
[32]The Claimant was bereaved by the death of a young grandchild in April 2024. Her mental health after being dismissed was poor. However, there is no medical evidence to show that she was incapacitated from working.[33]She told me that she “left a CV around” various shops and businesses in the hope of getting replacement work. However, she has not produced the CV in evidence. She produced in evidence only a single email exchange with one business at which she was trying to get replacement work in January 2025, but nothing before or after that. She did not register with any recruitment agency. She has been living on state benefits since dismissal and only very recently obtained another cleaning job “through a friend”.[34]There is limited evidence of reasonable attempts to mitigate and I find that had she made a proper effort to get replacement work she should have been able to fully mitigate within 6 months of her dismissal. Hence I regard it as just and equitable to award loss of earnings for the period but for no longer.[35]I award the following sums against R2 payable to the Claimant as compensation for unfair dismissal: Basic award1 £913.60 Compensatory award LOSR £350.00 Loss of earnings for 26 weeks at the rate of £114.209 per week £2969.20 Subtotal £4232.80 Uplift for breach of ACAS code 25% £1058.2 TOTAL £5291 The Recoupment Provisions apply. The prescribed amount is £2969.20. The prescribed period is 7/8/2024 to 5/2/2025. The difference between the prescribed amount and the total award is £2321.80. The Claimant’s NI number is JH194946C. J S Burns