London Borough Of Croydon & Anor v Ellis & Ors [1996] UKEAT 430_95_2006

EAT

London Borough Of Croydon & Anor v Ellis & Ors

[1996] UKEAT 430_95_2006 · 1996-06-20

MR JUSTICE BUCKLEY: This is an appeal against the decision of the Industrial Tribunal at Croydon, which sat from 21 to 28 November 1994, dealing initially with the cases of ten Applicants, against the London Borough of Croydon and Contemporary Leisure Plc. "the company" as Respondents.

The case arose out of the Council putting out to tender certain leisure activities, and the company presumably, being successful in their tender, and taking over the running of the facilities. The Tribunal looked into the facts and had no difficulty in concluding that there was a transfer of an undertaking within the meaning of the various legislative provisions and regulations, and since the Applicants had been made redundant by the Council, they had no difficulty in concluding that they had been unfairly dismissed. None of those facts or conclusions or decisions of the Tribunal are challenged.

The point arose before the Tribunal as to whether the London Borough of Croydon should remain as a Respondent, or if they should, whether they were jointly liable with the company for the wrongful dismissal. The point boils down to the proper construction of Section 5 of the Transfer of Undertaking Regulations 1981 .

(a) is in these terms:

"Without prejudice to paragraph (1) above, [but subject to paragraph (4A) below,] on the completion of a relevant transfer-- (a) all the transferor's rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this Regulation to the transferee;"

The relevant words of that for present purposes are simply that on completion of a relevant transfer "all the transferor's [that is in this case, the Council's liabilities] under or in connection with the contract, shall be transferred to the transferee, the company."

The only point that was argued was whether that, in effect, means what it says, or whether it has a more subtle meaning which leads to the result that both the transferor and the transferee remain liable. The Industrial Tribunal adopted the latter construction following a decision of the Scottish E.A.T. in the case of Stirling District Council v Allen & Others

[1994] ICR 434

. That decision had held that to make both parties liable was in line with the presumed intention of the acts and regulations and also the relevant EEC directive. The Industrial Tribunal could not be criticised for following the clear decision of the Scottish E.A.T. on that.

However, after the decision had been promulgated and very shortly afterwards, the Court of Session in Scotland overturned the E.A.T. decision. The Court of Sessions decision is reported in

1995 IRLR 301

. The Court of Session clearly and firmly concluded that the regulation we have recited, does in fact mean what it says and no more and no less. Transfer of liabilities can only mean transferring from one party to the other. One only needs to have recourse, indeed only should have recourse to a purposive construction of legislation and regulations if there is some doubt or ambiguity about the words in question. They could see no ambiguity or doubt about these words.

We have read the decision. We have been referred to it and I have to say, with due respect, we entirely agree with the Court of Session's decision and the reasoning, and would follow it. Certainly, this Tribunal would, in any event, be extremely reluctant not to follow a decision of the Scottish Court of Session. It may even be that we are strictly bound by it. If we are not, we would certainly only fail to follow it if we felt very strongly about something but we do not, we agree with it.

That is enough to dispose of this appeal. The only other matter we would mention is that of the ten original Applicants, three apparently fell by the wayside because they did not get their applications in in time. (That is, Applicants 8, 9 and 10 before the Tribunal.) Applicants 4 and 6 have since been re-engaged by the Council and they have settled their differences with the Council.

This appeal is only live and effective as far as Applicants 1, 2 3, 5 and 7 are concerned, and of course, the company itself, who might be thought to have an interest in the outcome. We specifically enquired at the commencement of this appeal whether everyone was satisfied and could satisfy us that the individuals and the company had been served with notice of the appeal and informed of it. The answer was that they had. We are satisfied that is correct. We only mention that because there is no appearance from any of them. Since they clearly are interested, or might be thought to be interested in the outcome, we would hesitate to dispose of the appeal against their interests or potentially against their interests, without being sure that they had been served and notified in the proper way. We are so satisfied and so that is that. The appeal will be allowed.