1) MR H J GREENHALF & 2) MRS R GREENHALF v 1) OCS CLEANING SOUTH LTD 2) ABSOLUTE SUPPORT SERVICES LTD [2001] UKEAT 0426_00_1705

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 0426_00_1705Case No Appeal No. EAT/0426 & EAT/0682/00Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
1) MR H J GREENHALF & 2) MRS R GREENHALFAPPELLANT1) OCS CLEANING SOUTH LTD 2) ABSOLUTE SUPPORT SERVICES LTDRESPONDENT
Before
Her Honour Judge Wakefield Ms S R Corby Mr D J Hodgkins CbDate 17 May 2001
[1]APPEARANCES For the Appellants MR RICHARD ASCOUGH (Representative) GMB Southern Region 205 Hook Road Chessington Surrey KT9 1EA For the 1st Respondent For the 2nd Respondent MR J FORD (Representative) NO APPEARANCE OR REPRESENTATION BY OR ON BEHALF OF THE 2nd RESPONDENT HER HONOUR JUDGE WAKEFIELD This is an appeal by Mr Henry Greenhalf and Mrs Rita Greenhalf against a decision of an Employment Tribunal sitting at Southampton on 14 February 2000 whereby on a preliminary issue it was determined that there was not a transfer of undertaking pursuant to the Transfer of Undertakings (Protection of Employment) Regulations 1981 and the Acquired Rights Directive from the first Respondent to the second Respondent.[2]The background facts were that the Appellants were employed by the first Respondent on 15 July 1997 as cleaners. On that same date the first Respondent commenced a cleaning contract with Wimpey Homes to clean offices at Hook in Hampshire. From then until 29 June 1999 when Wimpey terminated the contract with the first Respondent and the first Respondent terminated the Appellants contracts of employment, the Appellants had, together with two other cleaners, worked exclusively at the Hook offices, although there was a clause in their contract of employment which would have permitted that they be transferred to work elsewhere.[3]On 29 June 1999 Wimpey employed the second Respondent as cleaners in substitution for the first Respondent. The decision of the Employment Tribunal is appealed against, as argued before us today. on three grounds. Firstly, that the Employment Tribunal erred in law in finding, at paragraph 15 of the Employment Tribunal decision that what was transferred from the first Respondent to the second Respondent was the contractual right to carry on an activity (that is the cleaning of the offices) which did not constitute an economic entity. It was argued before us that in so doing the Employment Tribunal had misapplied the law and in particular had placed too great an emphasis on the case of Suzen v Zehnacker Getaudereinigung GmbH Krankenhauservice [1997] IRLR 255, a decision of the European Court of Justice, without taking account of the interpretations and restrictions on the approach of the European Court in that case as set out in subsequent Judgments of the Employment Appeal Tribunal and the Court of Appeal, most notably in ECM (Vehicle Delivery Service) Ltd v Cox [1999] IRLR 559 , RCO Support Services and Aintree Hospital Trust v Unison & Others [2000] IRLR 624 and Cheeseman v Brewer Contracts Ltd [2001] IRLR 144 .[4]The second ground of appeal is that the Employment Tribunal erred in law in regarding the fact that the Appellants contracts of employment contained a mobility clause as meaning that they were not "specifically and permanently assigned." to the contract by the first Respondent, or the Employment Tribunal put undue weight on that factor, and the third ground, that the Employment Tribunal erred in law in referring to the circumstances of the loss of the contract as "relevant and significant". That is to say, to quote from the decision of the Tribunal:
"That the contract was reassigned by Wimpey not in consequence of a tendering procedure but because the customer decided, rightly or wrongly, that the performance of the contract was deficient and that the cleaning work should be carried out by another contractor."
[5]As to the first and second of these grounds, we are not persuaded that the decision of the Employment Tribunal can be impugned. We find the analysis of the law wholly in accordance with the authorities they cited, and with others, either not cited or subsequent to the Employment Tribunal decision and to which we have been referred. The mobility clause does appear to us to be a relevant factor and one properly taken into account. However, we consider that in placing weight, and how much is unknown but it was expressed as 'significant', on the reasons why the contract was reassigned by the customer from the first Respondent to the second Respondent, the Employment Tribunal did err in law. This should not have been a factor in the analysis. We are particularly concerned at the sentence in paragraph 14 of the decision where the Employment Tribunal says:
"The overall objective of the Directive and the TUPE Regulations is to protect the interests of employees on a change of ownership of a business, but in the judgment of the Tribunal it would be a strange result in this case if Absolute was compelled to retain the very employees who, in part, had caused the customer to terminate the contract of OCS."
The appeal therefore will be allowed and the preliminary issue will be remitted to be reheard by a fresh Tribunal. In those circumstances, Mr Ascough, we assume that the second appeal between the same parties which is listed before us today, ought not to go ahead at this stage because that concerns compensation and that, I assume, must await the outcome of the preliminary issue. So if we adjourn that second appeal generally, pending the outcome of the preliminary issue in the Employment Tribunal, is that the right approach? Yes Do you agree with that Mr Ford? Yes Very well then that is what we will do.