Miles v Mullins (t/a Witney Powder Coating) [1997] UKEAT 555_96_0312

EAT
Miles v Mullins (t/a Witney Powder Coating)
[1997] UKEAT 555_96_0312 · 1997-12-03

JUDGE PETER CLARK :

This appeal by Mr Miles, the applicant before an Industrial Tribunal sitting at Reading on 20th March 1996, raises an issue as to continuity of his employment with the respondent, Peter Mullins T/A Witney Powder Coating. The tribunal held that he was not continuously employed for a period of not less than two years ending with the effective date of termination of his contract of employment in August 1995. Extended reasons for that decision are dated 10th April 1996.The appellant commenced employment as a line operator in Witney Powder Coating, an unincorporated business ["the business"] on 29th January 1981. At that time the business was owned by Mr and Mrs Kearsey. In due course he was promoted to foreman.In 1994 the Kearsey's thoughts turned to retirement. They entered into an agreement, reduced into writing and dated 7th April 1994, with the appellant to sell to him the business, which traded from an industrial estate in Minster Lovell, Oxfordshire.Under the terms of the agreement the purchase price of the business was £130,000, payable by the appellant in weekly instalments of £500.It is common ground that the transaction amounted to a relevant transfer under the Transfer of Undertakings (Protection of Employment) Regulations 1981 ["TUPE"]. Accordingly the employment of the three members of staff apart from the appellant, Messrs Hickman, Gigman and Stewart, transferred from the Kearseys to the appellant on 7th April 1994. From that date he became their employer.The agreement provided, at Clause 12:
"12. If the Buyer shall desire to determine and rescind this Agreement on the first anniversary hereof and shall give to the Sellers not less than one month's previous notice in writing of such desire and shall up to the time of such determination have made all payments to the Sellers hereunder and performed and observed the Buyer's obligations hereunder then immediately on the first anniversary hereof everything herein contained shall cease and be void but on the basis that the Sellers shall not be obliged to refund or forfeit any of the instalments of the purchase price received or due to them up to the date of determination."
We see from the appellant's witness statement which was before the Industrial Tribunal, that after taking over the business he ran it very much as before. He carried on working in the business but as he was now the owner he was self-employed for tax purposes. He was effectively a sole trader, rather than a director and/or employee of a limited company. It is common ground that he was not, for one year after 7th April 1994, employed under a contract of employment.Unfortunately the new venture did not work out for the appellant. Shortly after taking over he lost a major customer. He realised that it would be difficult to make a success of the business and, pursuant to Clause 12 of the agreement, by letter dated 19th February 1995, he gave notice to the Kearseys of his intention to rescind the agreement on its first anniversary.Accordingly, on 7th April 1995, the business reverted to the Kearseys and from that date the appellant resumed his employment with them in the business.In June 1995 the Kearseys found another purchaser, the respondent, Mr Mullins. After the respondent acquired the business the appellant continued working for him for a short while, but in August 1995 he resigned from the employment in circumstances which he contends amount to constructive unfair dismissal. We are not concerned with that issue at this stage.Before the Industrial Tribunal the question was whether the period of one year commencing on 7th April 1994 ["the relevant period"] broke the appellant's continuity of employment going back to 1981. If so, he had not completed the two year qualifying period necessary to found his complaint of unfair dismissal against the respondent, subject to what may be described in shorthand, as the Seymour-Smith point.The appellant sought to bridge the one year gap by relying on what is now s.212(3)(c) of the Employment Rights Act 1996 , which provides that any week during the whole or part of which an employee's relations with his employer are not governed by a contract of employment, but during which he is:
"absent from work in circumstances such that, by arrangement or custom, he is regarded as continuing in the employment of his employer for any purpose,"
counts in computing his period of employment.The tribunal rejected the appellant's contention, holding that no such arrangement had been entered into between the appellant and the Kearseys. No custom was relied upon.In these circumstances the tribunal held that he did not have the necessary two years continuous service with the respondent, but adjourned the case pending the outcome of the Seymour-Smith litigation currently before the European Court of Justice.In this appeal Mr Booth, on behalf of the appellant, challenges the tribunal's finding that no arrangement was entered into between the appellant and the Kearseys for the purposes of s.212(3)(c). Mr West, on behalf of the respondent, asks us to affirm the tribunal's decision on the additional ground that the appellant was not "absent from work" during the relevant period, a point not expressly dealt with in the tribunal's reasons.It is convenient to take the "absent from work" point first. Mr West's submission is simplicity itself. How can the appellant be said to be "absent from work" during the relevant period when he was working throughout that period in what was then his business?Mr Booth has referred us to the House of Lords decision in Ford v Warwickshire County Council [1983] ICR 273 , a case concerned with the continuity of employment of a teacher employed under a series of fixed term contracts over an eight year period. The contracts related to specific courses, interspersed with vacations during which there was no contract of employment.The issue turned on the meaning of what is now s.212(3)(b) of the 1996 Act, where an employee is:

"absent from work on account of a temporary cessation of work."

However, their Lordships' observations on the meaning of the expression "absent from work" are equally apposite to s.212(3)(c) with which we are concerned.It is right to say that in Ford no question of the employee being at work during the vacations arose, but we should refer to the relevant passages in the leading speeches.Lord Diplock said at page 282H-283A:
"My Lords, since paragraph 9 [ now s.212(3) of the 1996 Act ] only applies to an interval of time between the coming to an end of one contract of employment and the beginning of a fresh contract of employment, the expression "absent from work," where it appears in paragraph 9(1)( b ), ( c ) and ( d ), must mean not only that the employee is not doing any actual work for his employer but that there is no contract of employment subsisting between him and his employer that would entitle the latter to require him to do any work. ..."
Lord Brightman said at page 289A:
"I have two preliminary observations on paragraph 9(1)( b ). First, the "work" to which paragraph 9 is directed is the employee's work; that is to say, the work available for the employee personally: see the decision of this House in Fitzgerald v. Hall, Russell & Co. Ltd. [1970] AC 984 , 1002H. Lord Parker C.J. called it "his job": see Hunter v. Smith's Dock Co. Ltd. [1968] 1 W.L.R. 1865, 1869E. ..."
And later at page 289E-H his Lordship said:
"I take first the requirement of being "absent from [her] work." I felt initially some difficulty in applying this description to the appellant with reference to the vacation weeks. An employee who has ceased to be in contractual employment because the fixed term of her contract has expired would not ordinarily be described as "absent" from her work. Nor would an employee who has been dismissed and whose notice of dismissal (if any) has expired. Admittedly she is not at her (former) work, but to describe her as "absent" from her former work would be an unusual use of that word. But the word does not really cause any difficulty . Paragraph 9(1)( b ) is looking at a situation where the employee's contract of employment has terminated but cessation of work is, in the events which happen, of a temporary character. It is therefore not inappropriate to describe the employee during the interval as "absent from work" because ex hypothesi the employee returns shortly to the work. Furthermore, paragraph 9(1)( b ) is clearly intended to apply to a case where the employee is dismissed owing to non-availability of work; any argument that an employee whose fixed term of employment has expired is not "absent" from work would be equally applicable to the case of the dismissed employee. Finally, in the Fitzgerald case [1970] AC 984 this House held that a welder dismissed on November 28, 1962, owing to unavailability of work and re-engaged on January 21, 1963, was "absent from work" during the intervening period. So there can be no doubt that the appellant is properly described as having been "absent from work" during each of the summer vacations between September 1971 and July 1979."
As a matter of construction Mr Booth's submission comes down to this. He contends that the words "absent from work" add nothing to the absence of a contract of employment during the relevant period. He invites us not to be beguiled by the common sense approach of construing "absent from work" as simply meaning not at work. The plain ordinary meaning of words is not necessarily a useful guide to statutory construction.We reject that submission. In so far as assistance is to be derived from the speeches in Ford , where the employee was plainly not at work during the vacations, it lies in Lord Diplock's two-fold test for absence from work; first that the employee is not doing any actual work for his employer and there is no contract of employment subsisting between him and his employer. The first would be unnecessary if the absence of a contract of employment alone sufficed.Next Lord Brightman. We respectfully adopt the meaning of "work" in s. 212(3) as stated by his Lordship. It is the work available for the employee personally. Throughout the relevant period work was available for the appellant personally and he did that work in fact.We have not overlooked the presumption of continuity in the Act, nor the observation of Lord Morris of Borth-y-Gest in Fitzgerald v Hall, Russell & Co [1970] AC 984 , 993C :
"... The whole scheme of these provisions would seem to me to be designed in the interests of employees so that certain de facto breaks in the continuity of employment are to be ignored. In approaching problems of construction of words or phrases this consideration ought to be had in mind."
How far should we depart from what appears to us to be the ordinary and natural meaning of the words "absent from work" on the unusual facts of this case, in the interests of a purposive approach to the statute, bearing in mind the words of Lord Morris?In our judgment it is not right to strain the ordinary meaning of the words as we think Mr Booth is asking us to do. The purpose of these provisions is to preserve continuity for an employee for whom work is not available causing him to leave the employment, only to return when work becomes available for him, in the case of temporary cessation, or when he is similarly absent, but by arrangement or custom is treated as continuing in employment for any purpose. That is not this case. He was not absent from work during the relevant period.Having found in favour of the respondent on the cross-appeal we affirm the tribunal's decision on that alternative ground. It is accepted that such a ruling renders the point taken by Mr Booth in the appeal academic, since the result must be that the tribunal's decision stands regardless of the outcome of that dispute.Accordingly, and for these reasons, we dismiss the appeal.