L I GROUP LTD v MR A J CRAIG [2001] UKEAT 432_00_1312

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 432_00_1312Case No Appeal No. EAT/432/00Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
L I GROUP LTDAPPELLANTMR A J CRAIGRESPONDENT
Before
Mr Justice Wall Mr I EzekielLord Gladwin of CleeDate 13 December 2001
[1]APPEARANCES For the Appellant MR C SHELDON (of Counsel) Instructed By: Messrs Battens Solicitors with Poole & Co 23 Market Street Crewkerne Somerset TA18 7JU For the Respondent IN PERSON MR JUSTICE WALL: This is an appeal by L.I. Group Ltd (the Appellant) against a decision of the Employment Tribunal sitting at Bristol on 22 February 2000, in which the Tribunal found unanimously that Mr A.J. Craig, the Applicant before the Tribunal and the Respondent before us, had a sufficient period of continuous employment to entitle him to pursue his claim for unfair dismissal.[2]The Tribunal's Summary Reasons for reaching that decision were expressed in two brief paragraphs as follows:
"1 The applicant was employed from 20 July 1994 by Yeo Valley Co Ltd (Yeo Valley) who transferred its undertaking or part thereof in which the applicant was employed to the respondent on 17 May 1999. 2 Regulation 5 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 applies to that transfer and accordingly all the rights and liabilities of or in connection with the applicant's contract of employment pass to the respondent."
[3]The Appellant sought Extended Reasons for the decision which were provided by the Tribunal on 30 March 2000. Those Reasons extend to nine paragraphs on two pages.[4]The Appellant's appeal against the Tribunal's decision came before a division of the EAT presided over by Lindsay J (the President). Lindsay J described the Summary Reasons as "truly summary: they were only six lines long". The Extended Reasons he describes as "a fraction over one page long". The principal point taken in the Notice of Appeal was, as may be imagined, that the Reasons were so terse as not to have complied with the well known approach required by Meek v City of Birmingham District Council [1987] IRLR 250 , namely that the losing party should at least be able to tell why it has lost, and be able to identify from the reasoning given whether any error of law is available to be taken on appeal.[5]Lindsay J continued: "It is very easy to sympathise with a Tribunal faced with a TUPE case involving identification of the undertaking, if any and its transfer, if any, in the circumstance that neither the term "transfer" nor the term "undertaking" is defined in any really helpful way in either Domestic Provisions or in Community Directions or cases of the European Court of Justice. Indeed, the then current state of the law in this area was described by Morison J, whilst President of the EAT, as being in a mess. In such a circumstance, it particularly behoves a Tribunal at least clearly to set out the primary facts upon which it relies with clarity and here it is, in our view, just arguable (and, of course, at this stage we need say nothing beyond arguable) that the Meek test was not satisfied. Paragraph 8 of the Appellant's Notice of Appeal identifies a number of areas as to which the Appellant arguably was entitled to findings of fact, but where no such findings are to be found.[6]The EAT accordingly directed that the matter should go forward to a full hearing. We heard the matter on 26 October 2001. We came to the conclusion that the appeal would have to be allowed, and the matter remitted to a differently constituted Tribunal for re-hearing. For reasons which will be apparent, we reached that decision with some regret, but in order to ensure that the matter be re-listed at the earliest opportunity, we announced our decision but reserved our reasons. These we now give.[7]As they are short, we propose to set out the Extended Reasons of the Tribunal in their entirety. "1 The decision with reasons in summary form was sent to the parties on 8 March 2000. These extended reasons are supplied in response to a request received from the [Appellant] on 15 March 2000. 2 The Tribunal is to decide a preliminary issue namely whether the [Respondent] has sufficient continuous service with the [Appellant] to bring a claim for unfair dismissal. The [Respondent] claims that his employment was transferred in November 1999 from Yeo Valley Co Ltd to the [Appellant]: the [Appellant] asserts that there was no such transfer and the employment of the [Respondent] with the [Appellant] commenced on 17 May 1999. 3 The [Respondent] was employed by Yeo Valley Co Ltd in 1994. He was employed as a contract manager in respect of Yeo Valley's business providing cleaning services to a number of clients including Tesco. During the course of employment, the [Respondent] became more involved in a number of Tesco contracts for Yeo Valley. In May 1999, the [Appellant] negotiated with Yeo Valley for the acquisition of the Tesco contracts and subsequently took over those contracts together with all the staff employed by Yeo Valley on those contracts. The [Appellant] asserts that the [Respondent] was not included in the list of those staff. 4 During the course of the negotiations immediately prior to the transfer of these contracts, discussions took place between the [Appellant] and the [Respondent] as to the terms of his employment. The [Respondent] asserts that those discussions were relative to revised terms of his continued employment, that employment transferring under TUPE; the [Appellant] asserts that there was no TUPE transfer: but those discussions were in respect of an entirely fresh employment of the [Respondent] from that date. 5 As from 17 May 1999, the [Appellant] employed the [Respondent] upon agreed terms until the termination of his employment in December 1999. 6 Regulations 5 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 provides that: 'A relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transfer or in the undertaking or part transferred by any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee'. 7 We find that the cleaning contracts of Yeo Valley upon which the [Respondent] and others were employed was an undertaking for the purposes of the Regulations. We find that that undertaking was transferred in May 1999 to the [Appellant]. We find that, accordingly, the Regulations apply and the [Respondent's] employment with Yeo Valley transferred to the [Appellant]. 8 It is not, of course, relevant to the application of the provisions of Regulation 5 that the [Appellant] did not know that the [Respondent] was to be transferred by virtue of the Regulations. We find, in any event, that the [Appellant], because they were actively involved in discussions with him regarding his employment on the Tesco contracts were aware that the [Respondent] was employed by Yeo Valley on those contracts and his contract would, accordingly, pass to the [Appellant] by virtue of the Regulations. 9 For these reasons we find that the [Respondent] has sufficient continuity of employment to bring his claim for unfair dismissal."[8]It is immediately apparent from even a cursory reading of the Extended Reasons that the Tribunal identifies a number of relevant issues of fact which it does not resolve. For example, in the final sentence of paragraph 3 it records the Appellant's assertion that the Respondent was not included in the list of staff to be taken over in the acquisition of the Tesco contract. In paragraph 4, the Tribunal refers to discussions taking place between the Appellant and the Respondent as to the terms of his employment, but makes no finding on the respective contention set out in the balance of that paragraph.[9]For the Appellant, Mr Sheldon argued forcefully that the Tribunal stated firm conclusions without either making the relevant findings of fact to support them or explaining how those conclusions had been reached. No surprisingly, he relied heavily on the case of Meek v Birmingham District Council (supra), and submitted that the Tribunal had supplied no reasoning as to how it reached its conclusion that the Respondent's employment transferred to the Appellant, merely asserting its conclusion that there was an "undertaking" which transferred. It did not, he complained, say why it reached that conclusion, nor what facts it relied on to support it. There was no discussion of any of the (admittedly confusing) case law in this area.[10]Mr Sheldon also referred us to the case of Buchanan-Smith v Schleicher & Co International Ltd [1996] ICR 613, a decision of the EAT, presided over by Mummery J. At first blush, that decision appears to assist the Respondent since it makes clear that whether a person was "employed" by the transferor in the undertaking or part transferred, within the meaning of Regulation 5(1) of TUPE, depended on whether that person was assigned or allocated to the undertaking or part transferred. However, in order to be so employed, an employee did not have to work exclusively in the undertaking or part of the undertaking transferred: the question was one of fact to be determined by considering all the relevant circumstances. In the instant case, the Respondent was undoubtedly employed by Yeo Valley in relation to the Tesco contracts transferred to the Appellant. However, the Tribunal's finding was that "During the course of employment, the [Respondent] became more involved in a number of Tesco contracts for Yeo Valley". Mr Sheldon point out that the Tribunal had not resolved the issue of the extent of his involvement or provided any evidential basis or finding of fact which would have justified the conclusion that his employment automatically transferred under TUPE. He also referred us to the conclusion of the EAT in Buchanan-Smith v Schleicher & Co International Ltd [1996] ICR 623:
"C The test whether a person is employed in an undertaking or part is simply: was he assigned to that undertaking or part? That is a question of fact to be determined by considering or the relevant circumstances. The discharge of duties involving the use of assets or the discharge of beneficial administrative duties for the part transferred are insufficient to constitute employment in an undertaking."
[11]The Appellant's defence to the Respondent's claim is clearly set out in its form IT3. It reads as follows:
"Mr Craig's employment with L.I. Group Ltd commenced on 17 th May 1999 after being offered the position of Regional Manager. He was previously employed as a Contracts Manager for Yeo Valley Ltd responsible for their cleaning contracts and new business. Prior to Mr Craig's commencement L.I. Group acquired from Yeo Valley their cleaning contracts with Tesco stores in the Oxford and Cornwall & Devon Regions. These contracts were partially managed by Mr Craig and formed part of his duties for Yeo Valley. During our negotiations with Yeo Valley we were introduced to Mr Craig and subsequently invited him to attend an interview. At no time during his recruitment was he 'transferred' to our company under TUPE as his duties significantly extended outside involvement with the contracts acquired by our company. It was confirmed with Mr Craig that his offer of employment was as a new employee, working in Devon and Cornwall, and with no previous employment. Mr Craig accepted this without question. … At no time either prior to or during his employment did Mr Craig object either verbally or in writing, discuss, question or object to any aspect of his terms and conditions of employment. … ."
[12]In his form IT1 the Respondent stated that he started work with Yeo Valley on 20 July 1994 as a Mobile Cleaner, and by 1 May 1998 had graduated to the post of New Business Contract Manager. In that capacity, he says he was responsible for the cleaning contracts which Yeo Valley had with Tesco in the South West and in Oxford. His case is that when on 14 May 1999 Yeo Valley sold the Tesco contracts to the Appellant, the Managing Director of Yeo Valley told him that he would be transferring to the Appellant under TUPE Rules. He says he was given no notice by Yeo Valley, no redundancy payment and no holiday pay. He was introduced to Directors of the Appellant, and was engaged on Tesco contracts until he was dismissed.[13]The Tribunal appears to have taken the view that this was a straightforward case. It found that the cleaning contracts of Yeo Valley upon which the Respondent was employed were "an undertaking" for the purposes of the Regulations. That undertaking was transferred, they found, in May 1999 to the Appellant: The Appellant moved with them and worked for them. Accordingly, they found that TUPE applied.[14]There is, of course, an attraction in this simple approach. However, we have come to the conclusion that Mr Sheldon is right when he submits that the Tribunal has stated conclusions without giving reasons or finding relevant facts. At its lowest, this means that the Appellant does not know why it lost below: at its worst, it could mean that the facts which the Tribunal should have found could have produced a different result. In either event, justice has not been done, and the appeal must be allowed.[15]We are very concerned about the length of time this relatively simple matter has already taken to be resolved. The Respondent's employment was terminated in December 1999: his form IT1 is dated 20 December 1999. The hearing before the Tribunal was in March 2000, the judgment of the EAT, presided over by Lindsay J was on 14 July 2000. The appeal has been heard in October 2001. It will now have to go back to a differently constituted Tribunal for re-hearing, something which is unlikely to happen until 2002. We hope very much, therefore, that this matter can be speedily re-listed before the Employment Tribunal and resolved.[16]As we have already stated, the Respondent appeared before us in person. He produced a skeleton argument prepared with the assistance of the Citizens Advice Bureau. That document, which is well drafted, makes a number of points, and reminds us of the second limb to Meek v City of Birmingham District Council, namely that a Tribunal is not required to create an "elaborate formalistic product of refined legal draftsmanship" – in other words, the reasons should contain an outline of the story, a summary of the Tribunal's basic factual conclusions and a statement of the reasons which have led them to reach the conclusion which they have. Unfortunately, for the reasons we have already given, we do not agree with the Respondent that in this case the Tribunal's Extended Reasons fulfil these factors.[17]For all these reasons, the appeal will be allowed and the matter remitted to a differently constituted Tribunal for re-hearing.