Roberts-Morgan v Thomas [1994] UKEAT 309_92_0402

EAT

Roberts-Morgan v Thomas

[1994] UKEAT 309_92_0402 · 1994-02-04

MR JUSTICE WATERHOUSE : This Appeal from a decision by and Industrial Tribunal sitting at London (North) on 3 March 1992 must clearly be allowed and having regard to the circumstances that will emerge in the course of this short Judgment, it is neither necessary nor desirable to go into great detail about the matter.

The application before the Industrial Tribunal was by the Appellant who had been employed by solicitors as a cashier/book-keeper for many years. The last of those solicitors, a man called Michael Thomas, had ceased to trade and the application of the Appellant was for an appropriate redundancy payment.

In the application before the Tribunal, the Appellant stated that she had started work in April 1974 for Shaen Roscoe & Bracewell, a well-known firm of solicitors, and in effect her case was that she had remained in continuous employment from then until the date of her redundancy on 18 October 1991, when the Respondent had ceased to trade.

The Respondent entered an appearance and in that document he said at paragraph 3 that:

"The Applicant was employed by Michael Thomas & Co. in August 1984 when her husband's practice closed down. We agreed to her continuity of employment but have no documentation confirming the date of the original employment which appears to have commenced in April 1974. The Applicant's former employer will no doubt confirm."

In those circumstances, the Appellant's husband, Mr Roberts-Morgan, who had himself formerly been a partner in Shaen Roscoe & Bracewell, appeared before the Tribunal below anticipating that there would be no issue as to the continuity of employment of the Appellant from April 1974, whilst appreciating that it was a matter for the Tribunal itself to decide.

In the event, only brief evidence was heard from the Appellant herself. We have been told that the hearing lasted only about 20 minutes. The Tribunal then retired and its unanimous decision was that the Appellant was entitled to a redundancy payment of £1,386 only. That calculation being made on the basis that her employment had commenced on 1 September 1984 and that she was entitled to a redundancy payment calculated from that date rather than any earlier date.

In support of that decision, the full reasons of the Tribunal were promulgated a fortnight later and contain only the barest references to any facts. The findings of fact were set out in paragraph 2 and, since they are so short, it is convenient to quote the whole paragraph, as follows:

"The Applicant was dismissed by the Responent by reason of redundancy on 18 October 1991. Before her employment with the Respondent, the Applicant was employed by her husband, the sole partner of a firm of solicitors called Roberts-Morgan Shaen Roscoe & Co. On 31 August 1984 Mr Roberts-Morgan ceased trading and retired. On 1 September 1984 Michael Thomas took over the premises and undertook to complete the cases. He did not take over the liabilities. He did not take over the practice as a going concern. He agreed that there should be continuity of employment for the Applicant."

On the basis of those bare finding of fact, the Tribunal reached the conclusion that there was no continuity of employment and that there had been no transfer of a trade or business or undertaking within the meaning of paragraph 17(2) of Schedule 13 to the Employment Protection (Consolidation) Act 1978. One relevant sentence was added, namely:

"This is because Michael Thomas did not take over the practice as a going concern."

It will be apparent from what we have said already that the findings of fact made by the Industrial Tribunal are wholly inadequate to enable this Appeal Tribunal to decide whether or not on a full review of the matter they would have been justified in reaching the conclusion that they did. In presenting the Appeal before us, Mr Roberts-Morgan has indicated that the real position was that the agreement made at the end of August 1984 was not an agreement made with Michael Thomas alone, it was made with the firm of Michael Thomas & Company, which itself had partners.

At that point Mr Roberts-Morgan was in practice under the style Roberts-Morgan Shaen Roscoe at both Stanford-Le-Hope and Grays. He was the sole practitioner in that solicitors practice but he employed ten staff, six at an office in Stanford-Le-Hope and four at Grays. As we understand the position, the lease of the premises at Stanford-Le-Hope was assigned to Michael Thomas & Co. The telephone number was taken over. All existing clients and their files were transferred in effect to the new partnership and all but one of the staff were taken on by Michael Thomas & Co. The existing furniture and special stationery and so forth were also part of the agreement.

Michael Thomas & Co did not take over the liabilities of its predeceasor, Mr Roberts-Morgan and would not, for example, have been liable for negligence arising in relation to outstanding cases that had occurred before the date of the agreement. Otherwise, we have been told, Michael Thomas & Co did take over liabilities to clients and took over the clients' accounts relating to those specific clients.

It has been necessary to give this brief outline of some of the circumstances associated with the changes that took place at the end of August 1984, simply to underline the inadequacy of the findings of the Industrial Tribunal in this case. It may be that not all the matters that have been referred to have been investigated in course of the brief hearing before the Industrial Tribunal, but clearly they should have been, bearing in mind that the Industrial Tribunal was approaching the matter on the basis that they were not in any way bound by the alleged continuity agreement and found it necessary to probe the matter themselves to find out whether or not the case for the Appellant was correctly formulated.

The other difficulty that faces the Appeal Tribunal here is that no reference is made to any decided case or to any regulation pertinent to the Tribunal's decision, apart from the bare reference to Schedule 13 to the Act of 1978. What is clear is that there is contemporary authority which was highly material to the decision by the Tribunal as a matter of law. It is not necessary for the purposes of this Judgment to cite all the cases in which the problem has been considered recently. It is most conventient to refer to one of the latest of those decisions, a decision of this Appeal Tribunal, presided over by the former President, Mr Justice Wood, in Wren and others v Eastbourne Borough Council and UK Waste Control Ltd [1993] IRLR.425 . In the course of the Judgment of the Tribunal, given by Mr Justice Wood, he reviewed the facts and went on to refer specifically to the Transfer of Undertakings (Protection of Employment) Regulations 1981, to which of course no reference was made by the Tribunal below in the instant case. He referred also to the well-known Directive 77/187 of the Council of Europe under Article 189 of the Treaty of Rome, which applies directly to the transfer of undertakings, businesses or parts of businesses to another employer as a result of a legal transfer or merger.

Mr. Justice Wood pointed out that there were a substantial number of EEC cases which were relevant to any decision on an issue of this kind but that there were now three leading cases from which help could be obtained. He said at paragraph 29, page 428:

"Those three cases are Spijkers v Benedik and others [1986]; Dr Sophie Redmond Stichting v Bartol and others [1992] IRLR 366; and Rask and another v ISS Kantineservice A/S [1993] IRLR 133. The basic principles to be applied are set out in Spijkers and are confirmed in the later cases. In the light of our approach to the decision of this Industrial Tribunal we do not deem it necessary to examine these cases in detail. It is sufficient for our present purposes, and without referring to each and every element which can be relevant, to summarise the guidance given by the EEC cases broadly as follows: that when considering a relevant transfer of an undertaking under the Regulations, it is necessary to take into account all the surrounding circumstances - whether variously mentiond in the cases or not - and to see whether there is a recognisable economic entity, a going concern (this can include the provision of services), which is run or operated or carried on by the alleged transferor (the previous employer) and which is being continued by the alleged transferee (the new employer). One must look at the substance of what has occurred and not the form; it is a transfer or transmission or translation of the economic entity, the going concern. An activity is only part of an operation."

In many, if not most, cases, this involves the benefit from transfer of premises or equipment relevant to that economic entity, but these are only factors, not essentials."

That is a sufficient quotation from the Judgment of this Appeal Tribunal to underline the inadequacy of the findings in the present case. It serves also, in our judgment, to indicate that whatever the ultimate conclusion may be, the Appellant has at least a strong prima facie case before the Tribunal below, to support her contention that she was entitled to rely upon continuity of employment from 1974 onwards. It has not been necessary in dealing with that to refer to the changes that occurred when Mr Roberts-Morgan himself took over part of the practice of Shaen Roscoe and Bracewell because that part of the history was not an issue at the previous hearing and does not appear to have formed any relevant part in the reasoning of the Industrial Tribunal. No doubt, however, evidence will be adduced as to that phase of the history when the matter is reheard.

Before parting with the case we should say that quite apart from the European decisions referred to by Mr Justice Wood in the Wren case, there was an earlier Judgment of this Tribunal delivered by Mr Justice Knox on 3 May 1990 in Safebird Ltd v Mr N Ramero and others in which this Appeal Tribunal referred to the wide spread of circumstances that had to be taken into account in reaching a proper conclusion as to whether or not there had been a transfer of an undertaking within the meaning of the statutory provisions. Again, this Appeal Tribunal emphasized then that no single factor was to be regarded as decisive of the matter: the decision had to depend on all the circumstances.

Accordingly, our conclusion is that this Appeal must be allowed. Unhappily, there is insufficient material before this Appeal Tribunal to enable us to substitute a correct decision on the Appellant's Originating Application. We have no alternative but to direct that there should be a rehearing of the matter before a freshly contituted Tribunal and we express the hope that that can be arranged at the earliest possible time.