MR S DUNKINSON v (1) MERIDIAN TECHNOLOGIES LTD (2) JAMES HILL ENGINEERING [2001] UKEAT 0266_01_3007

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2001] UKEAT 0266_01_3007

Case No Appeal No. EAT/0266/01

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MR S DUNKINSONAPPELLANT

(1) MERIDIAN TECHNOLOGIES LTD (2) JAMES HILL ENGINEERINGRESPONDENT

Before

His Honour Judge Peter Clark Mr P A L Parker

Date 30 July 2001

[1]APPEARANCES For the Appellant MR M NORMAN (of Counsel) Clive Sutton Solicitors Buckland Manor Lymington Hampshire SO41 8NP HIS HONOUR JUDGE PETER CLARK This is an appeal by Mr Dunkinson against a decision of the Southampton Employment Tribunal promulgated with Extended Reasons on 5 January 2001, dismissing his complaint of unfair dismissal brought against the Respondents(1) Meridian Technologies Ltd (Meridian) and

(2) James Hill Engineering (James Hill).

[2]The Appellant commenced employment with Meridian on 6 April 1998 as Commercial Manager at a salary of £28,000 per annum. Meridian then set up a fabrication department to do work formerly contracted out to, among others, James Hill. The Appellant was put in charge of that department with the title Works Manager. In August 1999 he was appointed a director of Meridian. At that time the possibility of hiving off the fabrication department, which had been less than successful, was mooted. Despite his new appointment as director the majority of his working time was taken up with the fabrication department. The Appellant went on holiday. On his return on 6 September 1999 he was told that the fabrication department was to be sold off to James Hill. There was a factual dispute, resolved by the Tribunal in favour of Meridian, as to whether or not the Appellant then refused to transfer to James Hill. He said that he did not. Mr McLean, Meridian's Managing Director, supported by the evidence of Mr Fitzgerald, a director, said that he did. The Tribunal rejected the Appellant's evidence on this point (reasons paragraph 28). On 30 September the transfer of the fabrication department to James Hill was completed. The Appellant remained in employment with Meridian until on 2 November 1999 he was given notice of dismissal by Meridian to take effect on 30 November. He was not required to work out his notice. The reason given for dismissal was redundancy and he received a redundancy payment.

[3]On these facts the Tribunal made the following findings at paragraph (misnumbered) 42 of their reasons:

"The Tribunal find as follows:- (a) The applicant refused to transfer from the first respondents to the second respondents. (b) Under paragraph 5(4)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 1981 the refusal to transfer by the applicant had the effect of terminating his contract of employment, but it also had the effect of barring any complaint that he had been dismissed by the first respondent. (c) The applicant continued to work for the first respondents until 1 November. (d) The first respondents dismissed the applicant for redundancy as they had no suitable position to offer the applicant by that date. (e) Although the applicant's position had ceased as a result of the transfer by his choosing not to transfer under Section 5(4)(b), he had lost the right to complain of dismissal because of the transfer and could not, in the Tribunal's finding, therefore allege unfair dismissal on the basis of the transfer and loss of employment. (f) In the Tribunal's view, he had by his action of refusing to transfer "closed the door" for him to submit, as his advocate had done, that paragraph 8(1) enabled the applicant to claim unfair dismissal as the dismissal had taken place after 30 September, being the transfer date. (g) The respondents submitted that ETO could apply in regard to the applicant's dismissal on 1 November. The Tribunal reject this submission. (h) The applicant was dismissed on 1 November for redundancy. (i) The dismissal was fair and the application was dismissed."

The Tribunal also found at paragraph 41 of their reasons that there was no possibility whatsoever of the Appellant retaining a job with the first Respondents organisation.

[4]In this appeal Mr Norman advances 4 grounds of appeal. It is convenient to take first ground 3 which amounts to a challenge to the Tribunal's finding of fact that the Appellant refused to transfer to James Hill in September 1999. Having considered the way in which that submission is put we are satisfied that it amounts to a challenge to a finding of fact which was supported by evidence below. In these circumstances we are unable to see any arguable ground based on perversity for challenging that finding – see British Telecommunications plc v Sheridan

[1990] IRLR 27

, Piggot v Jackson

[1992] ICR85

[5]We deal next with ground 4 of the notice of appeal. The submission that is made is that even if the Appellant refused to transfer in September 1999 at a time when he believed he still had a long term future with Meridian then as at November 1999, when notice of dismissal was given, Meridian ought to have considered consultation with the Appellant with a view to his then transferring to James Hill. This argument is dealt with at paragraph 37 of the Tribunal's reasons where they say that there was some evidence to suggest that there was to be a joint venture between the first and second Respondents as far as the fabrication unit was concerned. However, there was not sufficient evidence for the Tribunal to come to a conclusion that the first and second Respondents were associated companies. It seems to us that this is a matter which ought to go forward to argument at a Full Hearing with the Respondents present. We say that particularly, having been taken by Mr Norman to a staff announcement dated 6 September 1999 which begins with this paragraph:

"Meridian Technologies Ltd (MTL) and James Hill Engineering Ltd (JHE) have formed a joint holding company Meridian Holdings Ltd (MHL) to control and expand their joint interests."

If that be right, then it is unclear to us how the Tribunal concluded that the first and second Respondents were not associated companies and accordingly why consideration was not given in November 1999 to discussing with the Appellant the possibility of his moving over to James Hill.

[6]As to the first and second grounds of appeal, they focus on the Tribunal's conclusion expressed at paragraph 42 (e) and (f) of the reasons. We accept that it is arguable that the Tribunal there fell into error; Regulation 5(4)(B) of TUPE precludes an employee who objects to transferring to the transferee from being treated as having been dismissed by the transferor, although the transfer operates to terminate his contract of employment. However, in this case the Appellant was retained in employment by Meridian until November 1999. That raises, we think, the arguable question as to whether, on dismissal in November 1999, the Appellant is nevertheless able to argue that such dismissal, after a relevant transfer, is automatically unfair under Regulation 8(1). That is the case advanced on his behalf in this appeal.

[7]We anticipate that this may give rise to a cross-appeal in due course. The Tribunal found that the reason for dismissal was redundancy. Having so found they ruled out dismissal being for an 'ETO' reason under Regulation 8(2) of TUPE , reasons paragraph 31 and 42(g). We anticipate that it may be argued by way of cross-appeal that if the Tribunal was wrong to find that the reason or principal reason for dismissal was redundancy, then they ought to have found, on the Tribunal's findings of fact, that is was for an ETO reason. If so, then the question will arise as to whether Meridian acted reasonably in treating that as a sufficient reason for dismissal under Section 98(4) of the Employment Rights Act , formerly Section 57(3) of the Employment Protection Consolidation Act , referred to in Regulation 8(2) of TUPE . However these are matters for the future. We are satisfied at this Preliminary Hearing that the appeal should proceed to a Full Hearing on grounds 1, 2 and 4 only, for the reasons which we have given.

[8]We will direct that the case be listed for three hours. The parties should liase and if there is any different view as to how long it will take once the Respondents come in, and if they cross-appeal, that may add to the time and so forth they should jointly notify listing so that an alteration could be made. There will be exchange of skeleton arguments not less than 14 days before the Full Appeal Hearing, copies to be lodged at the same time at the EAT. I do not think it is a case for Chairman's notes.