PATHWAY HOUSING ASSOCIATION v (1) ROSEMARIE MCFEE (2) MS IVY BUTT [2000] UKEAT 762_00_0711

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2000] UKEAT 762_00_0711Case No Appeal No. EAT/762/00Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
PATHWAY HOUSING ASSOCIATIONAPPELLANT(1) ROSEMARIE MCFEE (2) MS IVY BUTTRESPONDENT
Before
Sir Christopher BellamyDate 7 November 2000
[1]APPEARANCES For the Appellant ROBERT FENNER Solicitor Ogun at Law 391 City Road London EC1V 1NE SIR CHRISTOPHER BELLAMY QC This appeal comes before us by way of an ex-parte preliminary hearing to determine whether there is a reasonably arguable point of law in this appeal, which is against the Decision of the Employment Tribunal sitting at London South on 6 and 7 April 2000.[2]The Applicants before the Tribunal were a Ms McFee and a Ms Butt who worked for Midway Housing Ltd, which managed certain properties that were owned by the Threshold Tenant Trust in South London for social housing needs. What appears to have happened is that Midway in effect failed, for the reasons that are set out in paragraphs 9 and 10 of the Tribunal's Decision, and Midway notified Threshold that they were to cease managing the properties in question on Friday 30 April 1999. At paragraph 12 of the Tribunal's Decision it is said that Midway wrote to Threshold stating that that was so for operational and financial reasons adding that:- "Staff members have been given redundancy notices which expire on 30 April 1999. You are free to contact them independently should you need their services." Indeed the Applicants had also received from Midway on 30 April a letter that is headed "Redundancy Notice", referred to in paragraph 14 of the Decision, which provides:
"On behalf of the Management Committee I hereby write to notify you that your contract of employment with Midway Housing Ltd terminates on 1 May 1999. Your period of notice started on 1 April 1999. The company will endeavour to pay all monies due before the 1 May 1999."
[3]In the meantime, Threshold had been in negotiation with another organisation called Pathway who were a bigger management association than Midway. Threshold reached agreement with Pathway and by that agreement reached on 30 April it was agreed that Pathway would assume responsibility for the interim management of the properties with effect from 9 o'clock on Tuesday 4 May.[4]In circumstances that are set out in paragraph 14 of the Decision, Ms McFee and Ms Butt were told apparently by a Mrs Cartwright of Threshold to report for work on 4 May. They did so, and were apparently offered temporary employment to 30 June by a Mr Bascom of Pathway. Both of them apparently went off sick and did not in fact return to work and were dismissed on 4 June.[5]The question that arises on the appeal and arose in the case was the effect of the Transfer of Undertakings (Protection of Employment) Regulations and in particular whether the employment of the Applicants was, on the facts found by the Tribunal, transferred from Midway to Pathway under the terms of those regulations, so that therefore, when dismissed by Pathway, the Applicants had the right not to be unfairly dismissed under Part 10 of the Employment Rights Act 1996 .[6]The Tribunal in a carefully reasoned judgment rejected what they described as the excellent argument put to them by Mr Fenner and held that, on the authorities and in the light of the facts, that there had been a transfer of undertaking with the result that the Applicants had rights against Pathway, and that the Applicants' earlier dismissal by Midway did not in fact operate to end the Applicants' contract; that finding, in summary, is at paragraph 27 of the Decision.[7]In the argument that has been canvassed before us in the Skeleton Argument a number of points are taken on the authorities which in effect concern the interpretation of the Transfer of Undertakings regulations, in particular the question whether there is in this case a relevant transfer within the meaning of Regulation 3 of the Regulations. Secondly, whether the Applicants were employed "immediately before the transfer" in accordance with Regulation 5 of those Regulations, and also whether this is a case in which Regulation 8(2) applies, that being a provision that would deprive the Applicants of their right to bring proceedings for unfair dismissal:
"where an economic, technical or organisational reason entailing changes in the workforce of either the transfer or transferee before or after a relevant transfer, is the principal reason for dismissing an employee."
[8]There is also the question whether the Tribunal in its Reasons misunderstood or misapplied the concept of "an undertaking" for the purposes of its Decision.[9]Having considered the Tribunal's reasoning and the argument that we have heard, we consider that there is an arguable point of law in this case, particularly since the previous authorities do not seem to us to have directly addressed the question of what is the situation where the previous employer has gone out of business. The question of the interpretation of the TUPE in those circumstances does raise a question of law.[10]The framing of this question is one that we will phrase as broadly as possible, to ensure that no point is left out, that is to say whether the Tribunal's Decision contains an error of law concerning the interpretation of the Transfer of Undertakings (Protection of Employment) Regulations and in particular, Regulations 3, 5 and 8 paragraph 2, in the light of the facts as found by the Tribunal in this case. On that point the case should proceed to a full hearing. It is encumbent upon us also to give Directions for that hearing. The case should be listed as Category C for half a day, Skeleton Arguments to be exchanged in the normal way.