CELTEC LIMITED v MR JOHN ASTLEY (2) MS JULIE OWENS (3) MS DEBORAH LYNN HAWKES [2001] UKEAT 293_00_0510

"He is a senior civil servant well acquainted with the policy and operational issues surrounding the creation of the TEC's"

"2. In 1989 the government announced a new initiative for training in the 1990's and this included the establishment of Training and Enterprise Councils known as TEC's. There was a different scheme in Scotland where they were to be known as Local Enterprise Companies (LEC's). We are only concerned with the position in England and Wales, i.e. that of the TEC's. This was, as we find, a radical initiative. It was part of the contraction of the civil service and was also intended to provide a more effective liaison between training organisations and enterprise organisations, i.e. groups of employers with a view to delivering training that was truly needed by industry on a far more local basis than had hitherto been the case. 3. It was always anticipated that this initiative would take some time to implement and the staff concerned, who were all civil servants, were to be seconded to the newly created TEC's for a period of three years. In many cases it turned out to be shorter because the secondment was terminable at an earlier date as stated in the letters each secondee received. In some cases it turned out to be longer than three years because some secondees to the TEC's, applying to be taken back into the civil service, had their secondments extended until such time as the civil service had suitable vacancies for them to return to."

"The TEC's are companies limited by guarantee. They have a board of directors drawn from local businessmen; there were some fifteen such directors in the case of the TEC in North-east Wales. The programme began in Wales before that in England so we are dealing here with incidents that date back as far as 1989 and 1990 when it is alleged by the respondent that the continuity of employment of the applicants may have been broken. This is the period we have to focus on to resolve this case. The government created the TEC's not by any legislation but by a process of policy initiatives and publications. The TEC's effectively had a monopoly on the management of all the training and enterprise activities previously carried on by the Employment Department in England and Wales and the TEC's were given free access to the information systems and database. Some 80 TEC's took over the work of the 60 previous area offices of the Department. We have found as an agreed fact that premises in Wrexham and in Bangor previously used by the Department of Employment as area offices were subsequently taken over by the TEC's. There was initially little change in the daily working routine of the staff concerned or in the tasks on which they were engaged."

"I am pleased to be able to let you know now the arrangements that will enable TEC's to become the employers of their own staff."

"Although the major decision has now been taken and the way ahead is much clearer I must emphasise that it may take some time before all TEC's are the employers of their staff. I would like all TEC's to have made the change on or before the end of their fifth full year of operation and will be asking Regional Directors over the next few months to discuss and agree with each TEC how they propose to take matters forward. These discussions will include the need to spread the transition so that TEC's can remain operationally effective and the Department is able to make suitable arrangements for redeploying staff returning from TEC's. We will try to be as flexible as possible and it may of course help if some TEC's want to move faster than others. But it would do the whole process considerable harm if TEC's were thought to be putting undue pressure on people to make early decisions. I would like to emphasise that secondees, TEC's and my Department have entered into secondment agreements for three years. Those agreements cannot be revoked without the agreement of all three parties."

"We are also ensuring that staff and their Trade Union are aware of the information sent to the Chief Executives and that they are kept up to date as agreements are reached on the more detailed points."

"7. We have heard a considerable amount of evidence about the manner in which the staff were seconded and then were asked to take up direct employment with the TEC. It was always the plan that the staff would be seconded. When the TEC's originally started up they employed only a handful of their own staff in the whole of England and Wales. The project was staffed by secondees, all civil servants. The projected period of secondment was for some three years. After the three years, or just before secondees were asked to elect either to resign from the civil service and to take up employment with TEC or to revert to a role in the civil service. The applicants' first contention before us was that these resignations had not been freely given and, if freely given, they were certainly not given with the benefit of the fullest information. With hindsight the applicants feel that had they known they were about to lose their continuous employment they would not have volunteered to join the TEC's. 8. Having heard the evidence and arguments, in the final analysis, we are not persuaded that this was a relevant factor in deciding the issues we had to decide. It may be that applicants were not given the fullest information and indeed it may be that they, through their unions who negotiated with management, were under a misapprehension about the continuity of service being broken. The matter was certainly not given prominence or publicised greatly compared to other terms. Our starting point, however, has been the case of Collinson -v- BBC [1998] IRLR 238 , EAT which is a modern statement of the law regarding continuity of employment. The parties cannot contract into or out of continuity of employment, it is merely a calculation according to Part 14, Chapter 1 of the Employment Rights Act. Similarly, when it comes to analysing whether there has been a transfer of an undertaking we did not need to determine whether these were free resignations or tantamount to dismissals or mutual agreements to leave the civil service. It might have been relevant were we considering unfair dismissals or a TUPE argument derived from Litster -v- Forth Dry Dock & Engineering Co Ltd [1989] IRLR 161 , HL . That, in the final analysis was not the case. We should add that the respondent's consultant Colin McGrath's pessimistic view that these resignations were not freely given, did not finally influence our decision. 9. Another topic on which we heard a considerable amount of evidence which turns out not to bear on our decision is the fact that some secondees with the TEC's applied for and received generous voluntary early retirement ("

"6.7 Seconded staff will not be compulsorily transferred to TEC employment but will be free to resign to accept any offer of TEC employment or to return to the Department at the end of their secondment period. The Department does not therefore believe that the period of Civil Service and TEC employment would be continuous for employment rights purposes and has drawn up its package on that basis. 6.8 If a Court or Industrial Tribunal were to judge in the future that both periods of employment were continuous for redundancy calculation purposes, the Department, irrespective of the reason for the redundancy or when it was declared, would meet a part of the TEC's redundancy payment obligations by reimbursing it the cost of the former secondee's accrued Civil Service redundancy entitlement at the date of resignation. This would be uprated to reflect annual changes in the Retail Price Index between the date of resignation and the TEC redundancy. The TEC would be responsible for meeting all other payments, however calculated, arising from the redundancy or for any other reason not covered above."

"Any secondee transferring to T and E shall be deemed to have continuity of service."

"because staff will not be compulsory transferred to TEC employment. Secondees will be free to resign or accept TEC employment or to return to the Department at the end of their secondment period as they wish."

"That is why the Department has introduced special contractual employment rights and redundancy under-pinning arrangements as set out in the information booklet."

"8. As private companies TEC's were entitled to recruit their own staff and most if not all did so from the day they became operational. The Department of Employment wished to assist TEC's to become operationally effective as quickly as possible. As TEC's were new organisations, and the work to be undertaken required an understanding of the government policy that contracts were designed to deliver, the Department, with the agreement of TEC's, issued an invitation to staff in its Area Offices and elsewhere seeking volunteers for secondment to TEC's. This invitation was initially for a three year period. Whilst Area Office staff were given first preference, staff from Regional Offices and elsewhere in the Department were also able to volunteer. Just over 4,000 staff had volunteered to second by November 1991 when all 82 TEC's had become operational. 9. On secondment staff remained Civil Servants employed by the Department of Employment Group. They retained their Departmental terms and conditions of employment and had the right to return to the Department or wider Civil Service for redeployment when their secondment ended. As Civil Servants they remained subject to the Department's annual reporting and disciplinary procedures and those staff in membership of the Principal Civil Service Pension Scheme (PCSPS) retained membership of the scheme and accrued rights under the PCSPS. 10. Whilst TEC's welcomed the contribution made by seconded staff, they said that, as private companies, they would wish to employ all of their own staff on terms and conditions of employment determined by them. Many TEC Boards expressed concern that the reliance on seconded Civil Servants was inconsistent with their entrepreneurial status. Whilst never formally discussed there were also some doubts around a potential conflict of interest should a TEC secondee be asked to undertake activities that did not reflect government policy as determined through the annual contract. On 26 July 1991 the Secretary of State (then Michael Howard) announced that discussions would take place with TEC's, relevant trades unions and seconded staff about future staffing arrangements for TEC's. All staff were informed personally by letter of the discussions and told that they would be free to choose any offer of employment that a TEC might make, or to return to the Department or wider Civil Service for redeployment. 11. On 16 December 1992 [this should read 1991] Mr Howard announced that secondments would be phased out by the end of each individual TEC's fifth year of operation with the last secondment ending in October 1996. [We have set out extracts from that letter in paragraphs 14-16 above.] It was made clear to all TEC's and Seconded Staff, in writing, that the transition from secondment to TEC direct employment would be entirely voluntary. TEC's would be free to employ whom they wished: they would be under no obligation to offer employment to seconded staff or anyone else. Likewise, seconded staff would be free to resign and accept any offer of TEC employment made; or to remain Civil Servants and return to the Department or wider Civil Service for redeployment. . .. 13. The individual contracts of employment of all seconded staff were with the Crown. All seconded staff were free to return to the Department for redeployment. Civil Servants returning from TEC secondment to work within a Regional Office, other arm of the Department of Employment Group, or the wider Civil Service were treated in the same way as any other civil servant seeking a posting. Where a civil servant was offered employment by a TEC, the Department provided access to a free, independent and confidential personal counselling service to ensure that staff could discuss and evaluate the options open to them. Eleven of the seconded staff at TARGED and ten of those at North East Wales TEC took up this opportunity. Where civil servants decided to accept an offer of employment with a TEC they terminated their employment with the Crown on a voluntary basis by resigning from the Department. . .. 15. Following changes within the Department of Employment Group, including changes in the structure of the Employment Service, the setting up of TEC's, the market testing of certain functions, and the transfer of responsibility for certain functions to the Scottish Office, the Department determined that it had more staff than it required for its future business. While a recruitment ban and natural wastage facilitated downsizing the Department faced a surplus of staff in certain grades. In July 1993 therefore the Department's regions were authorised to introduce voluntary early retirement measures. In September 1993 all ED Group staff were invited to express interest in seeking the possibility of being released through Voluntary Early Retirement (VER) (for those aged 50 or over) or Voluntary Early Severance (VES) for those staff aged under 50. Information on this was sent to TEC personnel managers with a request that it be drawn to the attention of all seconded staff. Following the success of other measures it was decided almost immediately that the schemes be restricted to the Executive Grades. In November it was announced that there were very limited funds available and that it was possible that no one might be released on VES for certain grades. In February 1994 it was further announced that very few VES releases would be agreed in 1993-94 given the success of the VER scheme. Both schemes were wholly voluntary, with management reserving the right to decide who amongst those who expressed an interest might be released on operational and budget grounds. This facility operated was available across the Department but with Regional Offices determining plans appropriate for future local staffing requirements. The facility was not introduced as a mechanism for dealing with secondees but as part of wider operational business planning. Over all the ED Group experienced a period of considerable change. Staff in post figures for the Training Agency/ED Regions (including the Head Office in Sheffield) show a drop of some 6,815 from a high of 9,381 on 1/4/1989 to 2,566 on 1/4/1995 (source H M Treasury S.I.P. returns held by DfEE Personnel Management Information Unit)."

"If a trade or business, or an undertaking (whether or not established by or under an Act), is transferred from one person to another- (a) the period of employment of an employee in the trade or business or undertaking at the time of the transfer counts as a period of employment with the transferee, and (b) the transfer does not break the continuity of the period of employment."

"The transferor's rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer within the meaning of Article 1(1) shall, by reason of such transfer, be transferred to the transferee."

"It is hereby declared that a transfer of an undertaking or part of one- (a) may be affected by a series of two or more transactions; and (b) may take place whether or not any property is transferred to the transferee by the transferor."

"(4) It is hereby declared that a transfer of an undertaking or part of one may be effected by a series of two or more transactions between the same parties, but in determining whether or not such a series constitutes a single transfer regard shall be had to the extent to which the undertaking or part was controlled by the transferor and transferee respectively before the last transaction, to the lapse of time between each of the transactions, to the intention of the parties and to all the other circumstances."

"... a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor in the undertaking or part transferred but any such contract which would otherwise have been terminated by the transfer shall have effect after the date as if originally made between the person so employed and the transferee."

"11…. We should define what we think the undertaking is which was transferred: that is the management of the government funded post-16 vocational training and enterprise activities in England and Wales together with the information systems and database, some staff and some premises. That we think is a recognisable and definable economic entity. … 12. Further it was clear form considering Suzen and ECM v. Cox that the undertaking in question was 'a labour-intensive' undertaking and therefore the movement of staff from the Department to the TEC's was an important defining part of the undertaking and its transfer. Mr Malone [on behalf of Celtec], in a forceful argument based on BIFU v. Barclay's Bank contended that a 'mere' movement of staff would not constitute a transfer. We have not met that argument head-on because by defining the transfer in a broad way we have characterised the movement of staff as important transactions within a long transfer process."

"The seventh point we have to decide, and probably the most fundamental in this case, was the time of the transfer. Herein lies the novelty of the case. This question was raised in paragraph 23 of the Hampshire case but not answered. We have not been given precise dates but we assume that September 1990 which was when the North-east Wales TEC commenced business was the date on which the transfer commenced. We considered that the direct employment of previously seconded staff represented and constituted a transaction and it was one of series of steps in a very long process, which was a planned process predicted and envisaged from the start, which was to last several years. We have not encountered a case or been referred to a case where the business of transfer has taken some six years but that seems to be the case in the establishment of the TEC's. Regulation 5(3) of the Transfer Regulations provides as follows:- "... where the transfer is effected by a series of two or more transactions the person so employed immediately before any of those transactions," referring to the employees whose rights are protected. In our view the transfer was a long process starting some time in 1990 as affects these applicants, and ending on a national basis some time in 1996. We have no need to look no further (sic) than 1994 in this particular case. That being the length of transfer there were several transactions. Our analysis is that each time a seconded employee became directly employed by the TEC there was another transaction and immediately before that transaction ("any transaction") that employee was employed by the transferor, i.e. by the civil service and therefore that employee's rights passed over to the transferee which was the TEC. We see no reason in principle why such a very long period should not be found to be a period of the transfer when that was the plan from the outset. It has been rightly said by the applicants that the setting up of the TEC was "an experiment"

"22. The eighth question is whether the continuity passes under Section 218 of the Employment Rights Act 1996 (at the time in question this was in Schedule 13 to the EPCA 1978). We have already found there was a transfer for TUPE purposes and by the same reasoning there is a transfer for Section 218 purposes. We were referred to the case of Clark & Tokeley -v- Oakes in the Court of Appeal. That case establishes that the words 'at the time of the transfer' must be regarded as a period of time rather than a point in time. Nothing that we have found in relation to the TUPE questions seems different in this respect. There was a planned period which, to use words from the case of Macer -v- Aberfast "related to the machinery of the transfer"

"Margaret Sinclair was employed for more than two years by Business & Employment Skills Training Ltd (BEST) as a training adviser. BEST had a contract with Argyll & The Islands Enterprise Ltd (AIE) to provide training to local enterprise companies in the Argyll area. This consisted of in-house training and placement of trainees with employers in the area. Mrs Sinclair had sole responsibility for the placement side of training in the Argyll area. Best was paid by reference to a formula that related to the number of trainees on its books in any given week. BEST lost its contract with AIE with effect from June 1998. It issued Mrs Sinclair with a redundancy notice terminating her employment. Argyll Training Ltd (ATL) subsequently took on 21 of 32 placement trainees on BEST's books who remained with a training provider."

"Can employees, intended to be treated exactly the same by arrangement between transferor and transferee, have their continuity of employment and their qualification for valuable payments preserved or broken on such accidental differences of time and place?"

"it carries out the policy of the legislature to preserve continuity of employment when there is a change of employer and to carry over with that continuity the valuable accrued rights which would otherwise be lost."

"there is no one stage in the process of transferring a trade or business or undertaking which can be excluded from the time of the transfer by any hard and fast rule, but the question when a trade, business or undertaking is transferred or what is the time of its transfer must be a question of fact and degree to be answered by industrial tribunals in the light of common sense and their knowledge of trade and industry applied to all the circumstances of the particular case."

"an operation which may take place over a long period, beginning with the inception of negotiations or a least as soon as the parties have reached a firm understanding in principle."

"One is directed by the paragraph to look to 'the time of the transfer,' which must I think refer to the moment when the transaction of transferring the business from one owner to another is effected, or such short period as is necessary to enable that to be carried out. … I do not think that that moment or period is necessarily the time when legal instruments of transfer are executed, and, if it be a sale, the price is paid or secured, or perhaps earlier when a binding and enforceable agreement is entered into. If the transferee is let into possession and begins to carry on the business for his own account and at his own risk, I would think that that would be the time of transfer."

"The transfer proceedings may take a few weeks. It may be difficult to select a point in time at which one can say the business was transferred."

"can clearly only relate to a contract of employment which is subsisting at the moment of transfer; otherwise there is nothing on which the regulation can operate."

"Applying that construction of regulation 5 to the facts of the present case, it is clear that the applicants were dismissed before the relevant transfer. Their contracts of employment were not existing at the moment of the transfer. There was nothing on which regulation 5 could bite, accordingly the Secretary of State is liable for redundancy payments."

"We are however faced with what, at any rate, appear to be two conflicting Court of Appeal decisions. It is clear to us that 'the time of transfer' must be construed in the same way in relation to the Employment Protection (Consolidation) Act 1978 as to the Transfer of Undertakings (Protection of Employment) Regulations 1981. Is the time of transfer 'a moment in time' or 'a period of time.' The Court of Appeal in Teesside Times Ltd. v Drury [1980] ICR 338 although obiter, plainly in the majority decision took the view that it could be over a period of time albeit per Goff LJ it might only be a short period so as to enable the transaction to be carried out. In our judgment we are bound by the decision of the Court of Appeal in Secretary of State for Employment v Spence [1986] ICR 651. It is plainly directly on point. Although Teesside was not cited, it postdates Teesside. The judgments in Teesside were obiter. The three Lords Justices were not speaking with one voice and accordingly we feel ourselves bound by the decision in Secretary of State for Employment v Spence."

"The 12 applicants worked for the transferor who became insolvent and went into receivership. The receivers agreed to sell the business assets to the transferee and one hour before the transfer took place the workforce were told by the receivers that the business was to close down and that they were dismissed with immediate effect. They were handed dismissal letters which stated that no further funds were available to pay their wages with effect from the close of business and that no payments would be made for accrued holiday pay or damages for failure to give them the statutory period of notice. Within 48 hours of their dismissals the applicants, learning that the transferee was recruiting labour, applied to be taken on but none were successful. Only three former employees of the transferor were taken on by the transferee who preferred to recruit elsewhere at lower rates of pay. The applicants made a complaint of unfair dismissal to the industrial tribunal against the transferor subsequently adding the transferee as an additional party to the proceedings. The industrial tribunal concluded that the applicants had been employed by the transferor in the business immediately before the transfer to the transferee within the meaning of regulation 5(3) of the Transfer of Undertakings (Protection of Employment) Regulations 1981; that their dismissal was for a reason connected with the transfer and was therefore unfair in terms of regulation 8(1); and that the liabilities of the transferor to the applicants in connection with their contracts of employment were transferred to the transferee by virtue of regulation 5(1) and (2). They held that the applicants had been unfairly dismissed by the transferor and that the transferee was liable to pay them compensation. On appeal by the transferee the Employment Appeal Tribunal affirmed the decision of the industrial tribunal. The Court of Session allowed an appeal by the transferee."

"Regulation 5(3) must be construed on the footing that it applies to a person employed immediately before the transfer or would have been so employed if he had not been [by virtue of Regulation 8] unfairly dismissed before the transfer for a reason connected with the transfer."

"The necessary assumption in paragraph (1) of the regulation is that the contract of employment to which the consequence stated in the paragraph is to attach, is one which, apart from the transfer, would have continued in force and that what "terminates" it, or would, apart from the regulation, have terminated it, is the repudiatory breach constituted by the transfer. That paragraph can, therefore, operate only upon a subsisting contract. There is nothing in the terms of paragraph (2), if it stood alone, which necessarily involves the same restriction. It is, however, clearly intended merely to supplement the provisions of paragraph (1), and paragraph (3) supplies the connection by expressly limiting the operation of both paragraphs (1) and (2) to the case where the relevant employee is employed in the undertaking "immediately before the transfer," that is to say, to the circumstances envisaged in paragraph (1) in which, apart from the regulation, the event producing the termination is the transfer. The crucial question, therefore, is what is meant by the reference to a contract being terminated "by" a transfer. This could embrace a number of different possibilities. If nothing at all occurs to disturb the relationship of master and servant apart from the simple unannounced fact of the transfer of business by the employer, it is the transfer itself which constitutes the repudiatory breach which, apart from regulation 5(1), "terminates" the contract. If, however, the employer, contemporaneously with the transfer, announces to his workforce that he is transferring the business and that they are therefore dismissed without notice, it is, strictly, the oral notification which terminates the contract; yet it could not, as a matter of common sense, be denied that the contract has been "terminated by the transfer" of the business, particularly when reference is made to the supplementary provisions of paragraph (2) of regulation 5 when read in conjunction with paragraph (3). Similarly, if the employer, a week, or it may be a day, before the actual transfer, hands to each employee a letter announcing that he is proposing to transfer his undertaking at the close of business on the transfer date, at which time the employees are to consider themselves as forthwith dismissed, it could hardly be contended under the Regulations that their employment had not been terminated by the transfer, even though, at the date of the notice, the dismissal might be capable of taking effect independently, in the event, for instance, of the actual transfer of business being postponed to a date or time later than the expiry of the notice. In each hypothetical case the employer's repudiation of the contract of service is differently communicated but its essential quality of a repudiation by the transfer of the undertaking remains the same and the contact can quite properly be described as having been terminated by the transfer. If, by contrast, the employer announces to his workforce that he is transferring his business to another person at 5 p.m. on the following Friday and that they are to consider themselves dismissed from his employment at 4.59 p.m. on that day, it is difficult to see any reason why the interposition of a one-minute interval between the express repudiation becoming effective and the transfer which would, in any event, have operated as a repudiation if nothing had been said, should invest the breach of contract by the employer with some different quality. In each case the effective cause of the dismissal is the transfer of the business, whether it be announced in advance or contemporaneously, or whether it be unannounced, and it would be no misuse of ordinary language in each case to speak of the termination of the contracts of the workforce as having been effected by the transfer. It is absurd to suggest that there is any distinction in substance between any of the hypothetical cases which I have envisaged. Can it, then, one asks, possibly have been the intention of the Secretary of State in framing legislation expressly directed to safeguarding the rights of employees when an undertaking is transferred, to make its effectiveness depend upon whether the transferor, as a result perhaps of a collusive bargain with the transferee, allows a scintilla temporis to elapse between the operation of a notice dismissing his workforce and the completion of the legal formalities of the transfer which is the true cause of their dismissal, particularly having regard to the provisions of regulation 8, which were clearly intended to have the same effect as article 4 of the Directive? My Lords, I should be reluctant so to construe the Regulations, quite apart from any authority. When, however, they are considered in the light of the interpretation placed by the European Court of Justice on the provisions of the Directive, it becomes, I think, clear that your Lordships are not compelled to do so."

"… I can detect no flaw in the reasoning by which Balcombe L.J. … reached the conclusion on the facts of that case that regulation 5(1) did not operate to transfer the obligations of the original employer to the transferee."

"In March 1991, the applicant's employers were placed in administrative receivership. On 14 March a potential purchaser contacted the receivers with a view to purchasing part of the company's assets, and on 22 March a preliminary offer was made but no final agreement for the transfer of the employers' undertaking was reached. On 26 March the receivers sent the purchaser a draft contract and on 27 March the purchaser paid a sum on account to enable the company to continue trading for another week while further inquiries and negotiations were conducted. On 28 March the majority of the workforce, including the applicants, was dismissed, and on 10 April a sale of assets agreement was completed between the receivers and the purchaser. On the applicants' complaints of unfair dismissal against the purchaser, an industrial tribunal found that there was a transfer of an undertaking from the employers to the purchaser with the meaning of regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations 1981, but that the transfer was effected by the agreement for sale on 10 April 1991, nearly two weeks after the applicants' dismissal, rather than by a series of two or more transactions on 26 and 27 March, with the result that the applicants were not employed in the employers' undertaking "immediately before the transfer" as required by regulation 5(3) of the Regulations… ."

"… the draft contract of sale, the payment on account and the subsequent negotiations prior to the agreement for sale was merely a succession of events causally linked to one another and not a series of transactions by which a transfer of the employers' undertaking was 'effected;' that the transfer was effected by the single agreement for sale dated 10 April 1991, so that the applicants were not, therefore, employed "immediately before the transfer" within the meaning of regulation 5(3) of the Transfer of Undertakings (Protection of Employment) Regulations 1981… ."

"This appeal tribunal is unable to accept that submission as a correct construction of the regulations. For the purposes of this argument it may be assumed in the applicants' favour that the matters relied on 26 and 27 March 1991 were a series of two transactions. The crucial question is whether the transfer of the undertaking was "effected by a series of two or more transactions."

"In August 1986 the applicant commenced employment with the fourth respondent. On 10 October 1988 he was told that, apparently for financial reasons, the business was closing. He claimed unemployment benefit for a period of just under two weeks from 11 October until 22 October 1988. Some time in mid-October the business was transferred to the employers and on 24 October the applicant was re-engaged. He was dismissed on 6 July 1990. On his complaint of unfair dismissal, an industrial tribunal, when considering whether he had been continuously employed for not less that two years, took into account, pursuant to [what is now section 218 (2)] his previous employment with the fourth respondent and held that they had jurisdiction to hear the complaint."

"Continuity of employment is intrinsically intended to be preserved and, although courts or tribunals may be particularly astute to adopt a construction that frustrates deliberate avoidance schemes, it does not follow from that that a generous construction is inappropriate where no such scheme is present. On the contrary, there can in logic only be one interpretation of a statutory provision and, if a wide construction is appropriate to prevent deliberate avoidance schemes, it nonetheless remains the only appropriate construction when other sequences of events come to be considered."

"In the judgment in Macer v Abafast Ltd [1990] ICR 234 , 243 Wood J. rejected the argument addressed to that appeal tribunal that the words 'at the time of the transfer' in paragraph 17(2) of Schedule 13 required identification of the particular point of time when the transfer in question took effect. We respectfully agree with that conclusion, which Mr Hossain did not challenge before us. The arguments adduced by Stephenson L.J. in Teesside Times Ltd v Drury [1980] ICR 338 , 351 and 352 seem to us very compelling. They are shortly stated, first, that 'the time' of something must take its meaning from what that thing is, and, if the transfer of a trade or business is something which takes time, 'the time of the transfer' more naturally means a period of time than a moment of time. The second argument was that a liberal interpretation enables a tribunal to consider the de facto, and not the de jure, position, and to find a transfer at the time when the new employer is in actual occupation and control of the old business. The third and most important argument was that the liberal construction accorded with the evident policy of the legislation in preserving continuity of employment. That last consideration has subsequently received powerful support in the House of Lords in Litster v Forth Dry Dock & Engineering Co. Ltd [1989] ICR 341 , in relation to the construction of the Transfer of Undertakings (Protection of Employment) Regulations 1981, but it can be supported from internal indications of the Act of 1978 itself such as paragraph 1(3) of Schedule 13 [now section 210(5) of the Act] which reads: 'A person's employment during any period shall, unless the contrary is shown, be presumed to have been continuous.'"

"We have reached the conclusion that that period of receipt of unemployment benefit did not constitute a gap so wide as to be unbridgeable by paragraph 17(2). Our reasons are as follows. First, the receipt of unemployment benefit is not inconsistent with availability for employment in the trade, business or undertaking in which the employee had lately been employed. There is a major distinction between, on the one hand, applying for and receiving unemployment benefit as a result of wages or salary under an employment ceasing and, on the other, taking on another job. The latter would be far more likely effectively to sever the link between the employee and the trade, business or undertaking by which he had been employed. It is not necessary for us so to hold, because that situation is not before us. Secondly, once it is accepted that paragraph 17(2) is capable of operating across an interval greater than a week, it follows, in our view, it is capable of bridging a similar period of uncertainty whether or not the employee will be re-employed by a purchaser of the trade, business or undertaking. The receipt of unemployment benefit does no more than create such an uncertainty. It does not eliminate the possibility even on a short term basis of such re-employment."

"The applicant was employed for more than two years in a business before being dismissed on 14 March 1996, together with all the other employees, by a liquidator appointed to safeguard assets during detailed negotiations leading to the transfer of the business to the respondent company. The applicant was asked to remain at his post to maintain continuity and did so. On 21 March 1996 the transfer of the business was completed and the following day the applicant was re-employed by the company on different terms. On 2 April 1996 he was dismissed, and he made a complaint of unfair dismissal to an industrial tribunal. On a preliminary application to decide whether the applicant had been continuously employed for a sufficient period to entitle him to make his claim for unfair dismissal, the tribunal held that he had not been dismissed by the liquidator for a reason connected with the transfer, but that, despite the gap between his employment with the transferor and his employment with the company, the period of his employment with the transferor counted as a period of employment with the company, under [what is now section 218(2) of the Act] and that the tribunal had jurisdiction to hear his claim. An appeal by the company to the Employment Appeal Tribunal was dismissed."

"But it does not follow that "the time of transfer" of an undertaking for the purposes of regulation 5 of the Regulations of 1981, which was made to implement the provisions of Directive 77/187, is the same under [what is now section 218(2) of the Act], which originates in legislation dating from 1963, unconnected with the Directive and antedating the introduction of the right not to be unfairly dismissed in 1971: cf. Brook Lane Finance Co. Ltd. v Bradley [1988] ICR 423, 430H, following Secretary of State for Employment v Spence [1986] ICR 651, which was later distinguished by the House of Lords in Litster ."

"The particular considerations leading me to the conclusion that this appeal should be dismissed are as follows. (1) The divergent views of the members of the Court of Appeal in Teesside Times Ltd. v Drury [1980 ICR 338 , before whom the point of construction was fully argued by counsel experienced in the field of employment law, indicate that the expression 'at the time of the transfer' in paragraph 17(2) is reasonably capable of more than one meaning. On the one hand, Goff L.J. favoured the narrower construction on which Mr. Prichard relied. … [Mummery L.J. then referred to the passages in the judgment of Goff L.J. set out in paragraph 65 above]. Even though he took the narrower view, he expressly kept open the point that a gap of a day or two might not be fatal where it could be seen that the old employment, the new employment and the transfer of the business are all closely associated: see p. 355 C-D. (2) On the other hand, Stephenson and Eveleigh L.JJ. took a broader view. Stephenson L.J. hesitantly expressed this view on the expression of 'at the time of the transfer,' at p. 353: 'I can, however, go no further than to indicate my opinion that there is no one stage in the process of transferring a trade or business or undertaking which can be excluded from the time of the transfer by any hard and fast rule, but the question when a trade, business or undertaking is transferred or what is the time of its transfer must be a question of fact and degree to be answered by industrial tribunals in the light of common sense and their knowledge of trade and industry applied to all the circumstances of the particular case.' . .. (4) The expression 'at the time of transfer' in paragraph 17(2) is used in the context of the transfer of a 'trade or business or an undertaking' from one person to another. A trade or business or an undertaking will usually be a going concern of some complexity giving rise to different considerations than a simple transfer of a piece of real or personal property. The trade, business or undertaking may comprise personal and real property, stock-in-trade, incorporeal property, such as goodwill and work in progress, the benefit of existing contracts and the employees themselves. The completion of the transfer of these different elements of the trade, business or undertaking may occur at different times. Such a transfer is more in the nature of a process extending over a period of time than an event timed to take place only at a particular moment in time. Further, as Stephenson L.J. observed in Teesside [1980] ICR 338, 352B , the 'actual state of affairs' rather than 'legal and technical considerations,' for example the execution of documents, are what is known to the employee and make it easier for him to identify the time of transfer. (5) If paragraph 17(2) were construed in the sense contended for by the transferee, the fortuitous time-tabling or structuring of the manner or machinery of transfer of an undertaking would, if it did not ensure that the employee was still in the transferor's employment at the precise moment of the completion of the formalities of transfer, deprive a long serving employee in the undertaking of employment rights acquired by service in that undertaking. A gap in two employments in the same undertaking, however short in length and whether ineptly, arbitrarily or expertly engineered, would, on a transfer to, and on the continuation of the undertaking by, the new employer, result in the loss of a valuable accrued right not to be unfairly dismissed. The employee would find himself in exactly the same legal position with the new employer-transferee as if he had ceased to be employed in the undertaking altogether and had gone to work for a different employer in a totally unconnected trade, business or undertaking. It is, in my judgment, probable that the purpose of Parliament, in legislating for the computation of a period of continuous employment under paragraph 17(2), was to avoid, not to achieve, this result in the case of an employee employed by the transferee in the same undertaking after the completion of the transfer."

"If the transferee is let into possession and begins to carry on the business for his own account and at his own risk, I would think that that would be the time of transfer."

"If the transfer took place over the period of time asserted by the Respondent, does a secondee who resigns from the civil service to take up employment with the TEC obtain the benefit of continuity of employment?"

"18. The fifth question we were asked to consider was under Regulation 3 [the Tribunal meant "5"] of the transfer regulations. Would the employers contacts "otherwise have been terminated by reason of transfer?"

"Clearly, however, these words will, in appropriate cases, remove employees who are retained either temporarily or permanently by the transferor from the scheme of the Regulations. There would seem to be nothing in principle against the employer making it clear in advance of the transfer of a relevant undertaking to an employee that his or her employment will remain with the transferor (for example because the terms of the contract contain provisions which are sufficiently wide to entitle the transferor to require the employee to work in another part of the business which is not being transferred and the transferor so directs the employee prior to the transfer of the undertaking which is being disposed of). This is sometimes facilitated by the not uncommon practice, in a group of companies, of employing staff in a parent or service company with the consequence that the staff working in the undertaking are not employed by the subsidiary company which is the transferor."