Mrs S Whyte v AGI Global Logistics (GLA) Ltd: 8001651/2025
JUDGMENT
[1]There was a relevant transfer in terms of Regulation 3 of the Transfer of Undertaking (Protection of Employment) Regulations 2006 from the respondent to AGI Global Logistics (NCL) Ltd (“the transferee) on 1 November 2024.[2]The claimant’s employment transferred to the transferee on 1 November 2024 by operation of Regulation 4(1) of the 2006 Regulations.[3]The liability for any equal pay claim in respect of the claimant’s period of employment with the respondent transferred to the transferee by operation of Regulation 4(2) of the 2006 Regulations. As a result of this, the respondent has no liability for the claimant’s equal pay claim.[4]For these reasons, the claimant’s equal pay claim is dismissed.REASONS
[1]The claimant has brought a claim of equal pay against the respondent.[2]The respondent resists the claim and, amongst other defences, it raises an issue of jurisdiction. The respondent argues that there was a relevant transfer of its entire business in terms of the Transfer of Undertaking (Protection of Employment) Regulations 2006 on 1 November 2024 and that the claimant transferred to another legal entity on this date. The respondent argues that, as a result of this, the claim in respect of the period prior to the transfer was presented outwith the time limit in s129 of the Equality Act 2010 and that, in respect of the claimant’s period of employment after the transfer, any liability would lie with the transferee and not the respondent.[3]The claimant disputes that there was a relevant transfer. The present hearing was listed to determine this issue and what effect there would be on the equal pay claim if the Tribunal finds that there had been a relevant transfer. Preliminary issues[4]At the outset of the hearing, the respondent sought to introduce a supplementary file of documents. The claimant objected to this on the basis that she had only seen these in the week before the hearing. The Tribunal did not consider that the late introduction of the documents was a reason, in itself, for refusing to allow the documents to be adduced in evidence; the claimant had had sight of the documents in advance of the hearing and this was not a reason to exclude potentially relevant evidence (although the Tribunal had come to no view on the relevance of the documents). The Tribunal, therefore, allowed the additional documents.Evidence
[5]The Tribunal heard evidence from the following witnesses:a. The claimant.b. Tony Wigginton (TW) – CEO of the AGI Global Logistics group.c. Chloe Docherty (CD) – director of AGI Global Logistics (NCL) Ltd.d. Claire Morrison (known as Claire Kelly at the relevant time) – a former employee of the respondent.[6]There was an agreed file of documents prepared by the parties. A reference to a page number below is a reference to a page in that file. There was also a supplementary file and a reference to a page in that file will be proceeded by “SF” below.[7]This was not a case where the relevant facts were in dispute. There was some dispute about what was said to the claimant about the AGI Group’s plans for Glasgow and Scotland but, for reasons which will be set out below, these have not any bearing on the issues to be decided.[8]The Tribunal does consider that all the witnesses sought to give a truthful account of the events giving rise to the issues in dispute and that any differences in recollection between witnesses is a result of the passage time affecting those recollections. There were contemporaneous documents referred to in evidence (the accuracy of which were not in dispute) and the Tribunal considers that, where such documents exist, these provide an accurate reflection of what was being said at the time. Findings in fact[9]The Tribunal made the following relevant findings in fact.[10]The AGI Global Logistics group is set of businesses involved in national and international freight transport. They do not, for the most part, provide the transport themselves but, rather, act as a freight brokerage booking space for their clients’ freight on land, sea and air transport.[11]The group operates at various locations across the UK and is comprised of a number of separate limited companies. For the purposes of this case, the relevant companies are the respondent (who will hereinafter be referred to as “GLA”) and the company which covered the north-east of England, AGI Global Logistics (NCL) Ltd (hereinafter referred to as “NCL”). The group uses the port code of the nearest air or sea port to distinguish the different businesses within the group.[12]The claimant was a director of GLA which covered Scotland. Immediately prior to the work of GLA moving to NCL, there were 4 employees of GLA (including the claimant). These employees were all involved in carrying out the freight brokerage for existing clients even though some of them (including the claimant) were intended to have more of a sales role intended to increase the customer base and so expand the business. However, for reasons which are not relevant to the issues to be determined, the claimant and Mr McLeish had not been able to focus on the sales role and were solely involved in servicing existing clients.[13]There had been financial difficulties with GLA for some time and it had been operating at a loss for some time. From April 2024, the profit and loss account for the business (SF51) showed losses each month running, for the most part, to tens of thousands of pounds.[14]By August 2024, TW and his business partner, Mr Sands, considered that this could not continue. Mr Ormiston was terminated as a director of GLA and CD (who was a director of NCL) was asked whether she would consider taking GLA under her remit along with NCL. NCL had been running profitably and TW considered that CD was someone who could potentially turn matters around.[15]CD asked for a period of time to review the position with GLA before making a decision and this was granted. She became involved in GLA over September and October 2024. The information she fed back to SW led to a conclusion that GLA could not be saved as a business.[16]During the period when CD was reviewing the business, there had been attempts to reduce overheads for GLA. This involved moving to a smaller office in the same building which had a smaller monthly rental (although the length of the lease was longer).[17]On the morning of 25 October 2024, a meeting was held which involved TW and CD amongst others. A decision was made that GLA would cease trading and that all of its activities would move to NCL from 1 November 2024. It was decided that the claimant and Mr McLeish would move to NCL where they would be able to return to a focus on building the client base and expand the business in Scotland. The other two employees had less than 2 years’ service and so it was decided that they would be dismissed.[18]This decision was set out in an email from TW to other people in the group the same day (p111) and the claimant was informed later that same day in a phone call with CD.[19]Client and suppliers of GLA were sent a notice (p110 – supplier; SF5 – clients) informing them of a merger between GLA and NCL taking place on 1 November 2024. They were informed that all payments would be made to and from accounts in the name of NCL.[20]The GLA profit and loss account (SF51) shows that there was no trading by the business (other than a small amount of run-off from work done in October 2024). After that all of the freight brokerage work for the clients of GLA was done by NCL (SF21-34).[21]The claimant and Mr McLeish agreed to move to NCL. The claimant confirmed this in a meeting with CD and TW on 29 October 2024. This was followed by an email from CD to the claimant (p113) which starts by saying that CD was delighted that the claimant was joining the team at NCL. The email goes on to state that an updated contract would be issued but that the claimant’s remuneration and benefits would remain the same with an added commission scheme. The email also confirmed that customers will be issued with a letter confirming the change (this is a reference to the letter at SF5). The claimant was also asked to complete handover forms for all her clients.[22]The claimant was issued with a new director’s service agreement (pp91-109) which names NCL as the other party to the agreement. The claimant did not sign this agreement; this was because she had decided to leave the business. She submitted her resignation on 14 November 2024.[23]The office used by GLA remained open and used by the claimant and Mr McLeish for client meetings. The office equipment owned by GLA was, for the most part, transferred to NCL although some of it was returned to the procurement officer at the Bristol branch (SF19). Submissions[24]Counsel for the respondent relied on his skeleton argument which he supplemented with oral submissions. The claimant made oral submissions. For the sake of brevity, the Tribunal does not intend to set out the submissions in details. These have been noted and the Tribunal will refer to any point raised that requires to be specifically addressed in its decision below.Relevant Law
[25]The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply where there is a “relevant transfer” as defined in Regulation 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. (2A)-(5) … (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. (7) …[26]The questions for the Tribunal is assessing whether there has been a relevant transfer are, first, whether there was an identifiable economic entity and, second, whether there was a relevant transfer of such an entity (Whitewater Leisure Management Ltd v Barnes and ors 2000 ICR 1049, EAT).[27]In Cheesman and ors v R Brewer Contracts Ltd 2001 IRLR 144, the Employment Appeal Tribunal set out guidelines for Tribunal’s to follow in answering these questions: “10. From those four cases we distil the following. We shall attempt, although it is not always a clear distinction, to divide considerations between those going to whether there is an undertaking and those, if there is an undertaking, going to whether it has been transferred. The paragraph numbers we give are references to the numbering in the IRLR reports of the ECJ's judgments. Thus:(i) As to whether there is an undertaking, there needs to be found a stable economic entity whose activity is not limited to performing one specific works contract, an organised grouping of persons and of assets enabling (or facilitating) the exercise of an economic activity which pursues a specific objective — Sanchez Hidalgo paragraph 25; Allen paragraph 24 and Vidal para 6 (which, confusingly, places the reference to “an economic activity” a little differently). It has been held that the reference to “one specific works contract” is to be restricted to a contract for building works — see Argyll Training infra EAT at paras 14–19 .(ii) In order to be such an undertaking it must be sufficiently structured and autonomous but will not necessarily have significant assets, tangible or intangible — Vidal paragraph 27; Sanchez Hidalgo paragraph 26.(iii) In certain sectors such as cleaning and surveillance the assets are often reduced to their most basic and the activity is essentially based on manpower — Sanchez Hidalgo paragraph 26.(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 — Vidal paragraph 27; Sanchez Hidalgo paragraph 26.(v) An activity of itself is not an entity; the identity of an entity emerges from other factors such as its workforce, management staff, the way in which its work is organised, its operating methods and, where appropriate, the operational resources available to it — Vidal paragraph 30; Sanchez Hidalgo paragraph 30; Allen paragraph 27. 11. As for whether there has been a transfer:— (i) As to whether there is any relevant sense a transfer, the decisive criterion for establishing the existence of a transfer is whether the entity in question retains its identity, as indicated, inter alia, by the fact that its operation is actually continued or resumed — Vidal paragraph 22 and the case there cited; Spijkers -v- Gebrobroeders Benedik Abattoir C.V. [1986] ECR 1119 ECJ ; Schmidt -v- Spar-und Leihkasse [1994] IRLR 302 ECJ para 17 ; Sanchez Hidalgo paragraph 21; Allen paragraph 23. (ii) In a labour intensive sector it is to be recognised that an entity is capable of maintaining its identity after it has been transferred where the new employer does not merely pursue the activity in question but also takes over a major part, in terms of their numbers and skills, of the employees specially assigned by his predecessors to that task. That follows from the fact that in certain labour intensive sectors a group of workers engaged in the joint activity on a permanent basis may constitute an economic entity — Sanchez Hidalgo paragraph 32. (iii) In considering whether the conditions for existence of a transfer are met it is necessary to consider all the factors characterising the transaction in question but each is a single factor and none is to be considered in isolation — Vidal paragraph 29; Sanchez Hidalgo paragraph 29; Allen paragraph 26. However, whilst no authority so holds, it may, presumably, not be an error of law to consider “the decisive criterion” in (i) above in isolation; that, surely, is an aspect of its being “decisive”, although, as one sees from the “inter alia” in (i) above, “the decisive criterion” is not itself said to depend on a single factor. (iv) Amongst the matters thus falling 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 — Sanchez Hidalgo paragraph 29; Allen paragraph 26. (v) In determining whether or not there has been a transfer, account has to be taken, inter alia, 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 — Vidal paragraph 31; Sanchez Hidalgo paragraph 31; Allen paragraph 28.(vi) Where an economic entity is able to function without any significant tangible or intangible assets, the maintenance of its identity following the transaction being examined cannot logically depend on the transfer of such assets — Vidal paragraph 31; Sanchez Hidalgo paragraph 31; Allen paragraph 28.(vii) Even where assets are owned and are required to run the undertaking, the fact that they do not pass does not preclude a transfer — Allen paragraph 30.(viii) Where maintenance work is carried out by a cleaning firm and then next by the owner of the premises concerned, that mere fact does not justify the conclusion that there has been a transfer — Vidal paragraph 35.(ix) More broadly, the mere fact that the service provided by the old and new undertaking providing a contracted-out service or the old and new contract-holder are similar does not justify the conclusion that there has been a transfer of an economic entity between predecessor and successor — Sanchez Hidalgo paragraph 30.(x) The absence of any contractual link between 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 such direct contractual relationship Sanchez Hidalgo paragraphs 22 and 23.(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 — ECM page 1169 e–f.(xii) The fact that the work is performed continuously with no interruption or change in the manner or performance is a normal feature of transfers of undertakings but there is no particular importance to be attached to a gap between the end of the work by one sub-contractor and the start by the successor — Allen paragraphs 32–33.[28]Where there is a relevant transfer then Regulation 4(1) TUPE provides that any employees of the transferor assigned to the undertaking being transferred will transfer to the employment of the transferee. Regulation 4(2) TUPE goes on to provide that any liability of the transferor in respect of an employee being transferred will become the liability of the transferee (subject to certain exceptions which are not relevant to the present case).[29]Section 129 of the Equality Act 2010 sets out the time limits that apply to any claim in respect of an alleged breach of the equality clause (what is referred to as an “equal pay” claim). In a “standard case”, the time limit is 6 months starting from the last day of employment. There is no provision for the Tribunal to hear such a claim out of time as there are for other claims under the Equality Act.[30]Where there has been a relevant transfer under TUPE then this triggers the time limit under s129 of the 2010 Act and any equal pay claim in respect of a period of employment prior to a relevant transfer must be lodged within 6 months of the date of the transfer (UNISON v Allen [2007] IRLR 975, EAT and Gutridge v Sodexho Ltd [2009] IRLR 721, CA).[31]A claimant can pursue an equal pay claim in respect of the period after a relevant transfer against the transferee (regardless of whether a claim for the pre-transfer period is in time or not). This is because any contractual right flowing from the equality clause is transferred by Regulation 4(2) TUPE and so there is a continuing liability on the transferee to meet the contractual obligations which transferred to them (Gutridge, above).[32]When there has been a relevant transfer then the liability for any equal pay claim (whether for the pre or post-transfer period) will lie with the transferee (Regulation 4(2) TUPE).[33]The question for the Tribunal is whether there has been a relevant transfer under TUPE and then, if there has been a relevant transfer, what effect this has on the claimant’s equal pay claim.[34]The Tribunal is not concerned with whether the respondent or any transferee complied with their obligations under TUPE to consult or whether they acted unlawfully in dismissing anyone in connection with the transfer. The issue of whether any transferor and transferee have complied with their obligations under TUPE has no bearing on whether there was a relevant transfer. If it did then any organisations seeking to avoid the effect of TUPE would simply ignore any obligations under the legislation and this would wholly undermine the protections TUPE is intended to provide.[35]Similarly, the fact that no-one referred to what happened in November 2024 as a “TUPE transfer” does not mean that there was not a relevant transfer. Again, if it did then the protections of TUPE could easily be avoided. Rather, a relevant transfer takes place when the objective facts of the case satisfy the legal test.[36]Finally, the future intentions of management are also irrelevant to the question of whether there has been a relevant transfer. It may well have been the case that the group had the intention of re-opening an office or branch in Scotland at some point in the future but this was no bearing on the question of whether there was a relevant transfer from the respondent to NCL on 1 November 2024.[37]The Tribunal has addressed these points because they form the core of the claimant’s case on why she says there was no transfer. However, they are not relevant to the test which the Tribunal has to apply as set out above.[38]Turning to that test, the Tribunal is satisfied that the respondent was an identifiable economic entity; it was quite clear from the facts that there was an organised group of workers who carried out the freight brokerage business operated by the respondent for customers in Scotland. Indeed, there is no other conclusion that can be reached from the facts of the case.[39]It is also quite clear that this economic entity transferred to NCL; this company took over the work of the respondent providing the same services to the same customers after 1 November 2024 as the respondent had before that date. Again, this is clear from the facts of the case.[40]The remaining staff of the respondent (that is, the claimant and Mr McLeish) also transferred to the respondent. The claimant sought to suggest that she was remaining with the respondent to carry out a sales roles but the Tribunal does not consider that this is borne out by the facts; the contemporaneous correspondence all talks about the claimant joining NCL and there is nothing which suggests that she was remaining with the respondent. Further, the claimant was issued with a new director’s service agreement with NCL and this clearly indicated that she was working for NCL. It is accepted that the claimant did not sign this agreement; this was not because she believed she was still an employee of the respondent but because she had decided to leave the business.[41]Finally, the limited assets (in terms of office equipment) of the respondent also transferred to NCL.[42]Taking account of all of these factors, the Tribunal is satisfied that there has been a relevant transfer of the respondent’s business to NCL.[43]There being a relevant transfer then, by operation of Regulation 4(1) TUPE, the claimant’s employment transferred to NCL and, by operation of Regulation 4(2), so did any liabilities of the respondent in relation to the claimant.[44]The claimant made the point that she remained a director of the respondent until May 2025 on the Companies House register. However, a person’s status as a director is separate from their status as an employee; one can be a director but not an employee. In the claimant’s case, she was both an employee and a director of the respondent; the fact that she remained a director does not mean that there had not been a relevant transfer and that the claimant (as an employee) transferred to NCL.[45]The claimant also raised issues around how businesses within the group would assist each other in terms of providing support (for example, management from one company supporting staff in another company when their management was on leave) or transferring equipment when needed. However, this ignores that each of these companies are separate legal persons; the fact that they cooperate with each other is entirely understandable when they are part of the same group of businesses but this does not mean that a relevant transfer cannot occur between separate legal persons even if they are part of the same group.[46]Having concluded that there was a relevant transfer and that the claimant transferred from the respondent to NCL, the Tribunal now needs to determine what effect this has on the claimant’s equal pay claim.[47]The respondent has argued that any claim for the period the claimant was employed by them is out of time; they argue that the time limit set in s129 of the Equality Act was triggered by the transfer and the claim was lodged outwith this time limit (with no discretion for the Tribunal to hear a claim out of time). This is all correct but there is a more fundamental issue for the claimant.[48]The effect of Regulation 4(2) TUPE is that any liability of the respondent in respect of the claimant (which includes her equal pay claim) for the period of her employment with the respondent has transferred to NCL. The respondent has no liability and no claim of equal pay claim lies against them.[49]Further, the liability for any equal pay claim in respect of the period when the claimant was employed by NCL also lies with them.[50]The difficulty for the claimant is that NCL are not a respondent to these proceedings and so she has not pursued the claim against the correct respondent. This is not a criticism of the claimant who is a party litigant trying to navigate complicated legal provisions but it remains a fact that she has pursued the claim against the wrong respondent.[51]The present respondent having no liability for any equal pay claim (for whatever period of employment), the claim against them must be dismissed.[52]For these reasons, the equal pay claim against the respondent is hereby dismissed.