M Reynolds v S Myles and A Myles T/a Butterflies Nursery School Emmock Woods and S Myles, A Myles and T Devine T/a Butterflies Nursery School Kingsway East: 8001803/2024

EMPLOYMENT TRIBUNALS (SCOTLAND)

Case No 8001803/2024

Between

M ReynoldsClaimant

S Myles and A Myles T/a Butterflies Nursery School Emmock Woods and S Myles, A Myles and T Devine T/a Butterflies Nursery School Kingsway EastRespondent

Before

Employment Judge Porter SIR

Mr Lawson (instructed by Solicitor) for claimant

Date 15 October 2025

JUDGMENT

It is the judgment of the Employment Tribunal to dismiss the claimant’s claim of unfair dismissal as the Tribunal does not have jurisdiction to hear this claim

REASONS

[1]In these proceedings the claimant claims unfair dismissal. Following a Preliminary Hearing on the 27 June 2025 the case was set down for a one day PH in person on 30 September 2025 on the issues of(a) who was the claimant’s correct employer; and

(b) does the claimant have sufficient continuity of service to bring a complaint of ordinary unfair dismissal or alternatively unfair constructive dismissal. It was a matter of agreement that the onus lay on the claimant to prove these issues.

[2]At the PH on the 30 September 2025 the claimant was represented by Mr Lawson solicitor and the respondents were represented by Mr Muirhead solicitor. Evidence was heard from Miss Stacey Myles. The parties made reference to a Joint Bundle of Documentation prepared for the PH numbered 1- 107. Reference was also made to a Joint Bundle of Documentation prepared for an earlier postponed Hearing on the Merits and numbered 1-212.

[3]At the outset of the PH Mr Lawson submitted that the respondents’ ET3 requires amendment as it does not reflect their current position, namely that the claimant does not have qualifying service to bring this claim and therefore the Tribunal has no jurisdiction over this claim. The Tribunal allowed 14 days from 30 September 2025 for the respondents to update their pleadings and a further 14 days for the claimant to respond thereto. Statement of Agreed Facts

[4]In advance of the commencement of the PH parties agreed a Statement of Agreed Facts which is replicated below. The claimant signed a contract of employment with Butterflies Nursery School Kingsway East 15th September 2022. The claimant signed a contract of employment with Butterflies Nursery School Emmock Woods on 5th March 2024. The claimant’s payslips are all in the name of Butterflies Nursery School Kingsway East. The claimant’s P45 is in the name of Butterflies Nursery School Kingsway East. The respondents have separate bank accounts. The respondents have separate HM Revenue and Customs selfassessment and HM Revenue & Customs PAYE registration. The respondents are separate legal entities. The respondents have separate partnership agreements. The 1st respondent’s partnership agreement was signed on 1st April 2010. The 2nd respondent’s partnership agreement was signed on 1st March 2015. The respondents have separate SSSC registration. Findings in Fact

[5]The Tribunal made the undernoted Findings in Fact from the evidence of Stacey Myles and from the documentation.

[6]On 2 April 2010 Anne Myles and Stacey Myles entered into a Partnership Agreement for “Butterflies Nursery School” at 56 William Fitzgerald Way, Emmock Woods, Dundee (93). This Nursery School became known as Butterflies Nursery School - Emmock Woods.

[7]Stacey Myles is the daughter of Anne Myles. Anne Myles’ duties included payroll and payment of staff,

[8]On 1 March 2015 Stacey Myles and Anne Myles entered into a partnership with Teri Devine and opened up another nursery known as Butterflies Nursery School - Kingsway East (91-92). This Nursery School has now been sold by the partnership.

[9]It is a matter of agreement that the two Nurseries are separate legal entities and as such have separate bank accounts and have separate HMRC self-assessment and PAYE registration. They have separate SSSC accounts, and separate accounts for the Government’s Free Milk and Healthy Snacks scheme and for maintenance at Howdens and Screwfix.

[10]The two Nurseries shared training (57). The Tribunal accepted the evidence of Stacey Myles that it is not uncommon for nurseries in Dundee generally to share training facilities. The two nurseries would share recruitment campaigns (65); however such campaigns made it clear that applications had to be made to the individual nursery. The Tribunal accepted the evidence of Stacey Myles that the screenshot from a website to be found at 68 is outdated and is not representative of the true situation between the two Nurseries. It was admitted by the respondents however that Butterflies Nursery School - Emmock Woods paid for the Atlas system that regulated holiday requests from employees from the two nurseries (173 bundle, Hearing on the Merits).

[11]The claimant was employed by Butterflies Nursery School - Kingsway East from the 15 September 2022. Her Contract of Employment with Butterflies Nursery School is to be found at 48 onwards. In 2023 and 2024 the claimant was absent for a period of maternity leave.

[12]Prior to her return from maternity leave the claimant requested that the respondents transfer her to Butterflies Nursery School - Emmock Woods as her child was to attend Butterflies Nursery School - Kingsway East and she did not wish to work in the same entity. The respondents agreed to this transfer. The claimant signed a separate Contract of Employment with Butterflies Nursery School - Emmock Woods on the 6 March 2024 (58- 64). That contract provided: “Start date 05/03/2024 The date on which your continuous employment began is the same as the start date shown above.” The claimant did not resign from her employment from Butterflies Nursery - Kingsway East.

[13]The claimant’s Contracts of Employment with the respondents both contain a clause which states: “You may be required to work at other locations to meet the needs of the business, including our other Nursery sites.” (49 and 59). The Tribunal accepted the evidence of Stacey Myles that in practice this did not happen as the two Nurseries are separate legal entities and, further, as a matter of practice staff would have to have SSSC and PVG registration for both nurseries to transfer between the two. The claimant never worked for Butterflies Nursery School - Kingsway East after the 5 March 2024 when her employment with Butterflies Nursery - Emmock Woods commenced. The evidence of Stacey Myles was accepted that the only people who worked in both Nurseries were Stacey Myles’ daughter and Teri Devine who was a partner of Kingsway East as both were registered for the two Nurseries. The Tribunal accepted the evidence of Stacey Myles that the reason this clause was entered into the employees’ Contracts of Employment by their HR advisers was to cover the then exigencies of Covid.

[14]The claimant’s transfer to Butterflies Nursery School - Emmock Woods necessitated separate SSSC and PVG applications for the claimant. To this end the Tribunal had regard to the correspondence to be found at 71 which is a letter from the SSSC confirming that the claimant was registered at Butterflies Nursery School (Emmock Woods) between the 5 March 2024 and the 12 July 2024. The correspondence to be found at 72 is an email from SSSC registration which states that the claimant’s employment with Butterflies Nursery School - Kingsway East terminated on the 12 July 2024. The Tribunal accepted the evidence of Stacey Myles that the email at 72 was based on statements provided to the SSSC by the claimant herself.

[15]The claimant was required to do further induction training prior to commencing with Butterflies Nursery School - Emmock Woods. (122-123 bundle, Hearing on the Merits).

[16]The claimant continued to be paid by Butterflies Nursery School - Kingsway East. Her P45 was in the name of “Butterflies Nursery Kingsway East” (73-90). The Tribunal accepted the evidence of Stacey Myles that this was due to human error on the part of Anne Myles. This evidence was not challenged in cross examination.

The Law

[17]s218(6) of the Employment Rights Act 1996 provides: “6 If an employee of an employer is taken into the employment of another employer who, at the time when the employee enters the second employer’s employment, is an associated employer of the first employer(a) the employee’s period of employment at that time counts as a period of employment with the second employer, and

(b) the change of employer does not break the continuity of the period of employment.” 18. s231 of the Employment Rights Act 1996 provides: “Associated Employers For the purposes of this Act any two employers shall be treated as associated if- (a) one is a company of which the other (directly or indirectly) has control, or (b) both are companies of which a third person (directly or indirectly) has control; and "associated employer” shall be construed accordingly.”

[19]The Court of Appeal considered the definition of ‘company’ in Merton London Borough Council v Gardiner

1982 ICR 186

, CA, and held that for an employee to sustain a claim of continuity of employment between two employers under s151, Schedule 13 and s153(4) of the Employment Protection (Consolidation) Act 1978 (being the precursor of s218(6) and s231 of the ERA 1996) the employers must fit the definition of ‘associated’ employers in s153(4) (s231 ERA 1996) otherwise they will not be legally associated. It further held that the word ‘company’ as used in s231 means limited company — and nothing else.

[20]For the claimant, Mr Lawson asked the Tribunal to prefer the definition of company to be found in the later case of Glasgow City Council v Unison

(2014) IRLR 532

where the Inner House of the Court of Session adopted a wider definition of what constitutes a ‘company’. Submissions

[21]The parties each made able submissions before the Tribunal. The parties summarised their submissions before the Tribunal for insertion into the judgment, which are replicated below. Submissions for the claimant Employed with Stacey Myles, Anne Myles and Teri Devine T/A Butterflies Nursery School Kingsway East The claimant argues that her employment with Stacey Myles, Anne Myles and Teri Devine t/a Butterflies Nursery School Kingsway East (Kingsway East) was continuous from the 2nd November 2020 until the 12th July 2024. The claimant was employed by Kingsway East, notwithstanding signing a contract with Emmock Woods. The claimant can be employed by both nurseries at one time. The claimant’s payslips and P45 were both in the name of Kingsway East. Each contract contains a clause titled Place of Work which refers to being “required to work at other locations to meet the needs of the business including our other nursery sites.” The Tribunal should accept that the claimant’s employment with Kingsway East never ended on the 6th March 2024 when signing the contract of Emmock Woods and that the claimant’s employment with Kingsway East was continuous and thus the claimant does have sufficient service under Section 108 of the Employment Rights Act 1996. Associated Employer If the Tribunal is not with the claimant regarding remaining in employment with Kingsway East, the claimant submits that her length of service is preserved under Section 218(6) of the Employment Rights Act 1996. We submit that the Tribunal should not follow the decision in Gardiner v London Bourgh of Merton

[1980] IRLR 472

, but rather take the approach the Inner House took in the case of Glasgow City Council v Fox Cross Claimants

[2014] IRLR 532

, when considering if the partnerships can be considered as a company for s.231 of the 1996 Act. If the Tribunal is with us we submit it is our position that Emmock Woods has control over Kingsway East. This is on the basis that in theory the two partners in Emmock Wood, Stacey Myles and Anne Myles have a 50% share of the voting right each in Emmock Woods and they both have a combined share of 66% of the voting rights in Kingsway East. Therefore, working practically they have control over Kingsway East as well as Emmock Woods. We would refer the Tribunal to the case of Tice v Cartwright

[1999] ICR 769

. Submissions for the respondents The claimant was not employed for the required 2 year period in terms of section 108 ERA 1996 to bring a claim for unfair dismissal. A change of Employer breaks continuity (section 218 ERA 1996). Respondent 1 and respondent 2 were not Associated Employers in terms of section 231 ERA 1996. S231 – Reference to Company in s231 is a reference to a Limited Company. This does not include partnerships or other unincorporated associations (Wynne v Hair Control

[1978] ICR 870

EAT), ( Southwood Hostel Management Committee v Taylor

[1979] IRLR 397

EAT). Nor does it include corporations other than Limited Companies (Gardiner v London Borough of Merton

[1980] IRLR 472

CA). The claimant’s reliance on Glasgow City Council and Ors v Unison claimants should be rejected as it is not on all fours and therefore not binding on this Tribunal, on the basis that:a. GCC was an equal pay claim under the Equality Act 2010. This is a claim for unfair dismissal under ERA 1996.

b. GCC concerned a TUPE transfer from GCC to 2 LLP’s.

c. GCC does not appear to have been followed in any case for unfair dismissal involving a partnership other than ‘Pinkney’ (Not on all fours as Pinkey involved 3 Limited Companies forming into a partnership to avoid statutory obligations).

d. Clear distinction between an LLP (limited liability) and ordinary partnership with no such limits.

e. Clear distinction between matters concerning Equal Pay and pay comparisons and Unfair Dismissal claims.

f. LLP is an association of persons, with an economic purpose, formal requirements for its constitution, and a corporate body with a legal personality separate from its members, with limited liability. These do not apply to the respondents in this case.

g. Gardiner is the leading case and should be followed in respect of this unfair dismissal claim. ‘Company’ meant Limited Company (Page 2). Continuity of employment is a statutory concept and parties cannot contract to bestow or remove it. (Collison v BBC

[1998] IRLR 238

). The respondents did not operate as one business: a. Neither respondent is a Limited Company. b. Partnership agreements show the respondents as separate partnerships. c. Claimant’s signed contract shows the respondent at time of resignation Emmock Woods, with continuous service date of 5/3/24. d. Jobs are advertised separately (in some cases in the same advert, but with the businesses of each shown separately). e. Accountants letter confirms Partnerships are separate. f. SSSC Registrations are separate. g. Employee Handbooks are different.

h. Case law clear that ‘Company’ in s231 means Limited Company and does not apply to partnerships.

i. Kingsway East recently sold as a going concern.

j. No sharing of staff between the 2 Nurseries for the reasons given.

k. SSSC registration is particular to each Nursery.

l. Own bank accounts.

m. Own HMRC self assessment.

n. Own HMRC PAYE.

o. PVG checks required for each nursery.

p. Training sometimes shared between, but common for Dundee based nurseries to do so.

q. Separate registrations with Care Inspectorate.

r. Separate registrations with Dundee City Council.

s. Free Milk and Healthy Snack Scheme.

t. Maintenance paid separately. The claimant is bound by the terms of the signed contract of employment. No evidence led that the claimant signed the contract under circumstances which would mean that the terms were not binding, and nothing of that nature put to the respondent’s witnesses under cross examination. The claimant was not employed by both settings at the same time. The claimant moving to Butterflies Nursery and carrying out no work at Kingsway East from the date of her move, implied that she was no longer employed there. Only if respondents held to be associated (which is not admitted) it is not sufficient to show that there was a potential for control, it must be shown that factually there was control. No evidence led to show that there was control, and nothing of that nature put to the respondent’s witnesses under cross examination. Discussion and Decision

[22]The Tribunal considered that their starting point had to be the words of the contract entered into by the claimant on 6 March 2024 with Butterflies Nursery-Emmock Woods.

[23]In the absence of evidence from the claimant or any other contradictor the Tribunal determined that the existence of this contract showed an intention between the parties to enter into binding legal relations. To this end the contract stated: “Name of Employee Michaelah Reynolds Name of Employer: Butterflies Nursery School – Emmock Woods 56 WIlliam FItzgerald Way Emmock Woods Dundee Angus DD4 9FB. Start Date05/03/2024 Continuous Employment The date on which your continuous employment began is the same as the start date above.” (58)

[24]The contract signed by the claimant was singular in its identification of her employer and her start date, and the claimant only worked at Butterflies Nursery School - Emmock Woods from the 5 March 2024. In these circumstances the Tribunal considered the absence of an express resignation by the claimant from her employment with Butterflies Nursery School-Kingsway East to be of no consequence.

[25]The Tribunal accepted the evidence that the fact that the claimant continued to be paid by Butterflies Nursery School - Kingsway East and that the claimant’s P45 was in the name of Butterflies Nursery SchoolKingsway East were attributable to human error on the part of Anne Myles.

[26]The Tribunal noted that the two Nurseries carried out training together and that Butterflies Nursery t/a Emmock Woods continued to pay for the Atlas system that governed holiday requests for both nurseries. However, the Tribunal placed little import on this against an agreed factual matrix whereby it is not disputed that the respondents were separate legal entities with separate bank accounts, self assessment and PAYE registration and separate SSC registration and separate accounts with supplying entities. Neither is it disputed that Butterflies Nursery SchoolKingsway East has been sold as a separate entity.

[27]It is for all of these reasons that the Tribunal finds that the identity of the claimant’s employer was Stacey Myles and Anne Myles t/a Butterflies Nursery School - Emmock Woods and that the claimant’s period of employment was between the 5 March 2024 and the 12 July 2024. The Tribunal does not, therefore, have jurisdiction to hear the claimant’s claim of unfair dismissal.

[28]For the sake of completeness, the Tribunal proceeded to consider the claimant’s arguments under and in terms of s218(6) of the Employment Rights Act 1996. To this end the Tribunal considered the terms of s231 of the Employment Rights Act 1996 and the relevant case law and concluded that the case of Gardiner v London Borough of Merton remains the relevant authority on the definition of ‘company’ in this context. In reaching this decision the Tribunal took into account that the case of Gardiner concerned interpretation of the Employment Protection (Consolidation) Act 1978 which was a precursor to the Employment Rights Act 1996. The case of Glasgow City Council v Unison on the other hand concerned interpretation of matters of equal pay in the Equal Pay Act 1970, later consolidated in the Equality Act 2010. Accordingly, entirely different pieces of legislation were being interpreted in the dicta within these two cases. The Tribunal determined that the relevant dicta was that within Gardiner as it interpreted the legislation closest to the Employment Rights Act 1996, being the Employment Protection (Consolidation) Act 1978.

[29]Further and in any event the Tribunal determined that insufficient evidence was led for them to conclude that Butterflies Nursery School - Emmock Woods had control over Butterflies Nursery School – Kingsway East.

[30]It is for all of these reasons that it is the decision of this Tribunal to dismiss the claimant’s claim of unfair dismissal in these proceedings. 15 October 2025