ATOS ORIGIN UK LTD v (1) AMICUS (AMPS) & 29 OTHERS (2) COMPAQ COMPUTER LTD (3) COMPAQ COMPUTER CUSTOMER SERVICES LTD [2004] UKEAT 0566_03_2602

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2004] UKEAT 0566_03_2602Case No Appeal No. UKEAT/0566/03Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
ATOS ORIGIN UK LTDAPPELLANT(1) AMICUS (AMPS) & 29 OTHERS (2) COMPAQ COMPUTER LTD (3) COMPAQ COMPUTER CUSTOMER SERVICES LTDRESPONDENT
Before
His Honour Judge WilkieDate 26 February 2004
[1]APPEARANCES For the Appellant MR C JEANS QC (of Counsel Instructed by: Atos KPMG Consulting Ltd 1-2 Dorset Rise London EC4Y 8EN For the First Respondent For the Second and Third Respondents MR A SHORT (of Counsel) Instructed by: Messrs Rowley Ashworth Solicitors 247 The Broadway Wimbledon London SW19 1SE MR P ROSE QC (of Counsel) Instructed by: Messrs Baker & McKenzie Solicitors 100 New Bridge Street London EC4V 6JA SUMMARY TRANSFER OF UNDERTAKINGS TUPE - Transfer HIS HONOUR JUDGE WILKIE QC This is an appeal by Atos Origin UK Ltd ("Atos") against the Decision of the Employment Tribunal held at Bristol on 2, 6 - 9 and 16 May 2003, promulgated 6 June 2003. The Employment Tribunal decided that there had been no relevant transfer or transfers from Atos to either Compaq Computer Ltd ("Compaq"), or Compaq Computer Customer Services Ltd ("CCCSL"). The context of this Preliminary Decision was an application made by Amicus and 29 individuals against either Atos or Compaq or CCCSL, said to arise out of the circumstances under which Compaq and CCCSL obtained a contract for the provision of certain services which Atos previously had, the customer being Lucent Technologies Nederland BV ("Lucent"). They serviced respectively a Helpdesk, Deskside support services, LAN services, and other services.[2]In 1999 Lucent, a large international computer business with sites around the world, decided to outsource information technology support services, and in May 2000 it entered into two virtually identical contracts, one with Atos Origin BV and the other with Compaq BV to deliver those services to Europe, the Middle East and Africa. The Atos Origin contract was for the provision of services to a group of countries including the United Kingdom. The Compaq BV contract was for a second group of countries which included Ireland. The two agreements were known as the "Chunk Agreements" and the two groups of countries were described respectively as "G1" and "G2".[3]Atos Origin and Compaq BV had subsidiary companies, respectively Atos and Compaq. The structure of the two transactions was that there were two further Agreements by which Lucent BV, by means of its UK subsidiary, Lucent, agreed to the participation of Atos and Compaq respectively in the G1 and G2 Chunk Agreements.[4]The services which were to be provided under the respective Chunk Agreements were set out in seven separate categories as follows:(1) Helpdesk(2) Deskside support services.(3) Software upgrade and distribution service.(4) IMAC.(5) Geographic file server and Local Area Network services(6) Voice/video services.(7) Special services. The Agreements each contained identical termination provisions which divided the termination arrangements on the basis of the first six of these services as follows: (1) Helpdesk. (2) Services which comprised Deskside support service, software upgrade and distribution service and IMAC. (3) Local Area Network services. (4) Voice and video.[5]Atos delivered their contractual obligations to Lucent in respect of the UK in two ways. The Helpdesk service was delivered substantially by a team based in a telephone help desk centre in Runcorn. The balance of its services were delivered by a number of Atos employees who were sited on Lucent sites, but worked in offices and laboratories dedicated to Atos, using largely Atos equipment and software. These employees were known in the course of the hearings in this case as "the Lucent embedded Atos employees".[6]The two Chunk Agreements were not due to expire until 30 September 2004, but the Agreements contained a break clause which provided for prior termination on 180 days notice on payment of termination fees, the calculation of which was structured by reference to the four categories to which we have already referred.[7]During 2001 Lucent suffered a considerable reduction of work which involved a major redundancy programme throughout the entire geographical area of its operation. This involved a corresponding reduction in the number of "seats" serviced pursuant to the two Chunk Agreements. Between September 2001 and January 2002 there were negotiations between Lucent and Atos and between Lucent and Compaq with a view to either Compaq taking over services previously provided by Atos under G1, or conversely, Atos taking over the services previously provided by Compaq under G2. On 27 December 2001 Lucent announced its decision to award the totality of the G1 and G2 regions to Compaq. On 6 February 2002 Atos received a letter of termination of the G1 contract. Termination was to take place as follows:(1) In relation to the Helpdesk services at midnight on 31 July 2002.(2) In relation to LAN services at midnight on 31 August 2002.(3) In relation to all remaining services i.e. Deskside, software upgrades and distribution, email, IMAC, voice and video and special services at midnight on 30 September 2002. On 1 March 2002 Lucent entered into an agreement whereby Compaq was take over the G1 work in addition to its existing G2 work, with effect from the respective dates when Atos was to cease to perform them.[8]Clause 18.1 of the Agreement between Lucent and Atos provided in terms for the orderly transfer of the work in the event of expiration, termination or recission of any of the agreements. "Transfer" was expressed defined in that clause as meaning:
"the legal transfer of the employment of staff, ownership of equipment (if applicable) and licences (if applicable) and the termination assistance which the outgoing operation is obliged to provide under Clause 18"
[9]In paragraphs 18 and 19 of the Decision, the Tribunal recorded that throughout the period of the transition, Atos were asserting that there was to be a transfer of an undertaking and that the Acquired Rights Directive and TUPE Regulations would apply in respect of all staff assigned to the G1 contract. The attitude of Compaq was that, while they were willing to negotiate about the transfer of staff, there was no relevant transfer and therefore they were not obliged to take staff. There were meetings and discussions between 21 May 2002 and July 2002. The Tribunal records that at the outset of that process Atos Origin indicated that there were 120 employees in the G1 area assigned to the Lucent contracts, all of which were involved in G1. On 23 May the Atos UK manager responsible for this matter sent to the Compaq manager a list of 43 "UK Lucent G1 staff names" as part of the 120 originally claimed for the whole G1 area. By July 2002 the Atos UK list had reduced to 37 because some 6 names which were previously said to have been assigned to G1 Helpdesk Duties were removed. Of those 37, 29 were Applicants in the case.[10]Mr Jeans, who has represented Atos, has compiled as Appendix A to his Skeleton Argument a breakdown of the list of 37 which is culled from a document emanating from Atos, dated 27 June 2002. From that Appendix the following information is apparent. Sixteen employees were Applicants who were assigned to the Desktop function. In addition, there was one employee assigned to that function but who was not an Applicant, and there was one Applicant, Mr Henley, whom Atos had said was assigned to the Desktop function, but whom the Tribunal found was assigned to another contract which was had with Lucent (the "EO Contract"). Of the other Applicants, 7 were found to be Lucent embedded employees assigned to the G1 contract but servicing other aspects of the work, namely LAN, onsite helpdesk, and customer care. In addition, there were 4 Lucent embedded employees assigned to the G1 contract who were not Applicants and who serviced aspects of the G1 contract other than the Desktop service. They serviced respectively the LAN, the onsite Helpdesk, the special projects and one was a project manager. In addition, there was one applicant, Mr Shaer, whom the Employment Tribunal found was not assigned to the G1 contract, and there was an Applicant, Mr Miles, in respect of whom the Employment Tribunal made no finding whatever, as to whether he was or was not assigned to the G1 contract. The balance of 6 Atos employees, out of the 37 who had been listed in June 2002, were assigned to the Runcorn Helpdesk function. They were not therefore Lucent embedded G1 staff. Three of those were Applicants, three of those had made no applications.[11]Thus of the 37 Atos employees, identified by Atos as potentially being subject to a TUPE transfer in June 2002, some 28 were Lucent embedded staff assigned to the G1 contract, 6 were Atos staff assigned to the Runcorn Helpdesk, two, Messrs Henley and Shaer, were Lucent embedded staff not assigned to the G1 contract, and one was a Lucent embedded employee of whom the Employment Tribunal made no finding whether he was assigned or not. Of those 28 Lucent embedded employees assigned to the G1 contract, 17 out of 28 serviced the Desktop function. If it had been decided that Mr Henley was a Lucent embedded employee assigned to G1, then he too was within the Desktop function, which would have made the figures respectively 18 out of 29 Lucent embedded staff assigned to the G1 contract who serviced the Desktop function.[12]The Employment Tribunal, in paragraph 20 of its Decision, stated that it was not clear exactly how many people Compaq BV were willing to take on throughout the G1 area at the time that negotiations between them and Atos, concerning transfer of staff, foundered, but they had at that stage offered to take on seven in the United Kingdom. In June 2002 however, Compaq decided not to take on any Atos Origin people at all. It is clear from paragraph 57 of the Tribunal's Decision that it decided as a fact that the reason for this change of heart was the decision by Compaq to decline to take the transfer of any Atos employee in order to try to ensure that there was no transfer. This aspect of their policy may, we think, be accurately described as a "TUPE avoidance policy".[13]The reasons for the difference between the 37, whom Atos wished to transfer, and the 7 which Compaq at one stage were prepared to agree to take by way of transfer of their employment was considered in paragraphs 21 - 27 of the Decision. The Tribunal took account of: the fact that the Lucent operation was contracting in size; that consequentially Compaq had under-utilised staff of their own who could be put to the additional work; the different way in which Compaq were proposing to deliver the Europe-wide service by utilising off-shore staff, in particular in connection with the Helpdesk which Compaq located in Dublin, and the existence of a Compaq worldwide facility in their own premises in Reading which aimed to provide LAN and network server management services by remote operation rather than by "embedded" staff. Notwithstanding these differences arising from the downturn in the volume of work, the availability of Compaq under-utilised staff, and the different way of organising the delivery of the services, the Tribunal found as a fact that Compaq do have employees embedded on Lucent sites in the UK, and that they do carry out Deskside support.[14]The Tribunal had to answer a number of questions. They first had to decide whether there was an identifiable economic entity forming part of an undertaking which was capable of being transferred from Atos to Compaq or CCCSL. In that respect Atos argued three alternative propositions. The first was that the organisation which provided all services to Lucent UK in connection with the G1 contract constituted an economic entity. Their secondary case was that the Lucent embedded Atos staff comprised an economic entity and that the Runcorn Helpdesk staff constituted a separate entity. Their third argument was that the Lucent embedded Atos staff could be broken down into distinct groups by reference to the function which they were serving, pursuant to the G1 contract. The Compaq position was that there was no identifiable economic entity in respect of the subject matter of the transaction whereby the Atos G1 contract was terminated and the Compaq G2 contract was amended so as to add the G1 element. The Tribunal conducted a very full review of the authorities and reminded itself of the approved definition of stable economic entity as being :
"an organised grouping of persons and assets facilitating the exercise of and economic activity which pursues a specific objective."
Having done so, they concluded as a matter of fact that the organisation which delivered the service under G1 by the Lucent embedded Atos staff was an economic entity forming part of the Atos undertaking. In our judgment, the Tribunal was entitled to reach this conclusion and in so doing directed themselves as to the proper approach and the proper legal test. The Tribunal rejected the primary contention of Atos that the entirety of the organisation for the delivery of the G1 contract, including the Runcorn Helpdesk, comprised a single economic entity. Mr Jeans, for Atos, has sought to argue that this was a perverse decision, but in our judgment, the Tribunal was perfectly entitled as a matter of fact and degree to come to this conclusion for the reasons which are set out in paragraph 53 of the Decision. Mr Jeans further contended that the Tribunal was perverse in failing to conclude that the Runcorn Helpdesk, insofar as it delivered services under the G1 contract, was a separate economic entity. In our judgment the decision that it did not comprise a separate economic entity was one which was open to it on the evidence for the reasons which they have set out in the latter part of paragraph 53. In our judgment, therefore, the Decision of the Employment Tribunal which identified as the relevant economic entity the organisation comprising the Lucent embedded staff assigned to the G1 contract, was correct. Having done so, in our judgment, the Tribunal did not err in not going on to consider Atos's further proposition that there were a number of discrete economic entities comprising the organisation which delivered, pursuant to the G1 contract, the various functions which have already been described, and which were provided by the Lucent embedded staff. The Tribunal addressed the question of what was the relevant identifiable economic entity, if indeed there was one. It identified that which was the identifiable economic entity and, in so doing, accepted one aspect of the Atos case. Having done so, it would have been quite wrong, in our judgment, for it to have considered what other identifiable economic entities it might have identified. The purpose of the exercise was to identify what was the identifiable economic entity which was the subject of the transaction. Having done so the Tribunal then correctly went on to consider the next question which was whether there was a relevant transfer, that is whether that entity retained its identity when the Atos contract was terminated and the Compaq contract was amended to include G1.[15]As a consequence of our rejecting the Atos argument on appeal in respect of the Helpdesk Runcorn staff, it is not necessary for us to consider an interesting, important, but, in this case tangential, argument about the jurisdiction of the Employment Tribunal to consider the question of a transfer of an undertaking of the Helpdesk Runcorn staff from Atos to CCCSL which is an Irish company located in the Republic of Ireland. That jurisdictional issue is one essentially between Compaq and Amicus and the individual Applicants. That issue only arises if there were any question of the Helpdesk Runcorn element of the G1 contract comprising an identifiable economic entity. As we have concluded that the Tribunal was entitled to decide that it was not, then this issue does not arise for consideration.[16]The Tribunal having concluded, correctly in our view, that the organisation of the G1 contract, as delivered by the Lucent embedded staff, was an identifiable economic entity, it then considered whether it retained its identity when the Atos contract was terminated and the Compaq contract was amended to include G1. The Tribunal addressed this issue in paragraphs 55 to 65 of its Decision. It is clear that in those paragraphs it is approaching the matter on the basis of a multi-factorial analysis such as indicated by the wealth of authority both domestic and European, to which the Tribunal referred in its Decision.[17]The Appellant has raised four separate arguments in connection with this part of the Decision. We deal with each of these in turn.[18]The first focuses on paragraph 61 in which the Tribunal turned to intangible assets. The Tribunal concluded that there was no transfer of goodwill and that to treat the terminated Atos contract as an intangible asset which passed would be incorrect. Atos's contract was terminated, not transferred. The Tribunal refer to an earlier reference to the decision in Liikenne -v- Liskojarvi [2001] IRLR 171 . In that case which concerns the operation of seven local bus routes which were awarded by a public body to one contractor at the expiration of the contract of a previous contractor, the European Court of

Justice said as follows, in paragraph 40:

"At the hearing, the representative of the defendants in the main proceedings emphasised the economic value of the contract between the contracting authority YTV and Liikenne, and submitted that this was a significant intangible asset. That value cannot be denied; but in the context of an award which is to be renewed, the value of such an intangible asset in principle falls to nil on the expiry of the old contract, since the award is necessarily thrown open again. If an award procedure such as that at issue in the main proceedings provides for the new contractor to take over the existing contracts with customers, or if the majority of the customers may be regarded as captive, then it should nevertheless be considered that there is a transfer of customers."
Atos argue that the Tribunal erred in law in concluding that there was no transfer of goodwill. In the context of this part of the argument, it has to be remembered that in paragraph 55 of its Decision the Tribunal had already considered the question whether the operation "is actually continued or resumed". In connection with that issue the Tribunal had to consider the extent to which the significantly different method of delivery of the services prevented that factor existing. The Tribunal, on this issue and in the context of its knowledge that the customer for the service was exactly the same before and after the transaction concluded, in Atos's favour and contrary to the Compaq argument, that the essential activity of the Lucent embedded Atos staff survived the change of contract. It seems to us that in addressing this issue, the Tribunal had already taken full account of the fact that the recipient of the services which had previously been supplied by Atos was the same customer to whom Compaq was henceforth to supply the same services. In our judgment, the Tribunal was perfectly entitled in those circumstances to conclude that there was no goodwill. The position is quite different, of course, if the contract is with a party who by virtue of the contract can deliver to the new contractor a customer base. That is so whether it is captive or whether it is by way of recommendation such as was envisaged might be the case in the Liikenne decision. Mr Jeans, in the course of his argument in response to Mr Rose, appears implicitly to have recognised this distinction in that he sought to persuade us that this was such a situation. He sought to argue that, although the contract was with Lucent, the services were provided to the "seats" thereby satisfying the analogy. In our judgment this is an untenable analysis. The contract was to supply services to Lucent, the single customer and not to the "seats". Accordingly, in our judgment, the Tribunal did not err in law in concluding that there was no transfer of goodwill.[19]The second argument concerned the impact of the TUPE avoidance policy. The conclusions of the Tribunal are set out in paragraphs 56 and 57. They say this:
"56 The next element is transfer of staff. According to the first respondents this is a labour intensive sector but there has been no transfer of staff. On the face of it, this is a serious blow to the first respondent's own case. However, we cannot take this fact at face value. It is necessary to consider whether we should deem staff to have been transferred. This involves us deciding why no staff have been taken on. 57 The explanation, in part, is the decision by Compaq not to do so, to try to ensure that there was no transfer. That, however, is not enough in itself for us to conclude that TUPE automatically applies. We have to consider what would have happened if TUPE had not existed and Compaq could choose what staff they wanted. ……."
The Appellant contends that the Tribunal erred as a matter of law in concluding that, in the face of a TUPE avoidance policy, it should consider what would have happened had such a policy not been adopted and should then treat as transferred those staff who, but for the adoption of such a policy, would have been transferred. The Appellant contends that, in the face of a finding that there was a TUPE avoidance policy, the correct approach in law is that the Tribunal should deem as transferred all the staff who were assigned to the identifiable economic entity. The Tribunal should then consider whether there has been a transfer of the entity in the light of that assumption.[20]The Employment Tribunal had referred to it three Court of Appeal cases which address this issue. These were ECM -v- Cox [1999] IRLR 559 , ADI --v- Willer [2001] IRLR 542 and RCO Support Services -v- Unison [2002] IRLR 401 . Each of these authorities has been cited to us and carefully analysed by Mr Jeans and Mr Rose respectively. In our judgment there is nothing in any of them to suggest that, where a TUPE avoidance policy has been adopted, the attitude of Tribunals should be the punitive one of deeming transferred all employees assigned to the relevant economic entity, regardless of whether in reality such employees would have been transferred but for the adoption of that policy. The case which goes furthest towards that proposition is the case of ADI where the majority of the Court of Appeal concluded that in the case of an avoidance policy, where there was no suggestion that the case was anything other than an all or nothing matter as far as the transfer of staff was concerned, the Tribunal was obliged to deem the staff to have been transferred for the purpose of conducting its multi-factorial assessment. The other two cases seem not to go so far as this but rather indicate that a relevant factor for the Tribunal to consider is what was the reason for no staff transferring. If it was the adoption of a TUPE avoidance policy, then that fact may be taken into account in considering the question of transfer of staff and its impact upon the operation of the multi-factorial test.[21]Mr Jeans has sought to argue in favour of a punitive approach essentially on the basis that any investigation of what might otherwise have happened would present intractable problems of evidence, particularly where an employer might seek to construct self-serving arguments to demonstrate that, in any event, absent such a policy, none or few would have been transferred.[22]On the other hand it is apparent to us that the thrust of the decisions, and the adoption of the multi-factorial approach, is to seek to expose the substance rather than the form of the transaction and to root the decision of a Tribunal in what is the reality of the situation rather than by inventing a legal construct. If that be the case, then to adopt the approach which the Appellants urge upon us would be to fly in the face of that general approach. In our judgment, the question the Tribunal has to ask itself is whether the entity retained its identity after the transaction. One of the factors which informs that decision is the question of the transfer of staff. Where, in fact, no staff have been transferred but the reason for that is either entirely, or to some extent, the adoption of a TUPE avoidance policy, then it seems to us manifest commonsense for the Tribunal to consider what impact that policy had by considering what would have happened but for that policy. That is a matter of evidence and, no doubt in some cases, the drawing of an inference. In this case the Tribunal was well able to address this question by reference both to the documentary evidence and the witnesses who were called. In our judgment it was not wrong for it to do so. We therefore reject the Appellant's argument that the Tribunal erred in law by seeking to establish what would have happened but for the adoption of the policy.[23]The next argument is that the reasoning of the Tribunal is deficient. The argument is that the documentation demonstrates that, from a very early stage, the attitude of Compaq at its higher levels of management was hostile to the transfer of any Atos employee precisely in order to seek to avoid a conclusion that there had been a transfer of an undertaking. The Tribunal, it is said, has failed to address this aspect of the evidence and by so doing has failed properly to set out its reasoning for its conclusion that in fact and at most only eight employees would have had their employment transferred but for the adoption of the TUPE avoidance policy. The argument, by way of inference, must therefore be that the Tribunal had really no option in the light of the documentation but to conclude that all, or the vast majority of the Atos assigned staff, would have been transferred but for the adoption of the TUPE avoidance policy and that the arguments to the contrary were essentially window dressing. In our judgment this is an unsustainable attack on the reasons given by the Tribunal which, in our judgment, were closely argued and were based on substantial evidence. It is true to say that the Tribunal, in concluding that such a policy was adopted, has not referred specifically to the documentation which supported that conclusion. It has, however, consistent with the documentation which we have seen and the evidence which it heard, recorded how the overall numbers said by Atos to be assigned to the UK G1 aspect of the Lucent contract came to be calculated and in paragraphs 20 to 27, and again in paragraphs 57 and 58, they have identified the reasons why they have come to the conclusion that but for the TUPE avoidance policy, Compaq would, at most have taken on eight staff. In our judgment there is no merit in this particular argument and we reject it.[24]The next basis for appeal concerns the way in which the Tribunal has assessed the significance of the "deemed" transfer of staff from Atos to Compaq for the purpose of the multi-factorial consideration of the question whether the part of the undertaking identified as that conducted by the Lucent embedded Atos employees has retained its identity so that there has been a transfer of that part of the undertaking from Atos to Compaq. This involves consideration of paragraph 58 of the Tribunal's Decision; it reads as follows:
"We therefore conclude that if Compaq had not made a policy decision not to take on Atos staff, they would, at most, have taken on 8 staff. These would not have been key employees, though there would have been an element of cherry-picking. There would, therefore, have been a transfer of only a minority of the staff assigned to the economic entity."
The Appellant criticises this paragraph. They say that it was not sufficient for the Tribunal merely to state that at most Compaq would have taken on eight Atos staff, that this was a numerical minority of the staff assigned to the Lucent embedded work and as a consequence this element was not sufficiently significant for the economic entity to keep its identity (see ET Decision paragraph 64).[25]It is common ground that the domestic and European Courts have used different language on different occasions to indicate the permissible approaches to consideration of this factor in the overall multi-factorial exercise. On occasion they have used the expression "majority" of staff. On other occasions they have referred to "essential staff" or to "the core" of the staff. On yet other occasions they have referred to "a major part" of staff.[26]The criticism made to the Appellant of the Tribunal is that they appear to have considered only one, possibly two, approaches to this exercise. They have plainly considered the arithmetical approach. It may be that they have also considered the approach which considers whether the "essential" or "core" members of staff would have been taken but for the TUPE avoidance policy. This emerges from their reference to the fact, as they found, that those deemed transfer staff would not have been "key employees". Mr Jeans points out, correctly, that in addressing the Tribunal the Appellant argued that it should also consider whether the deemed transfer staff constituted "a major part" of the workforce. He has developed an argument before us that he did not deploy in detail before the Tribunal. The reason for this is that we are concerned with the approach of the Tribunal on the basis of the facts as they found them to be. Mr Jeans before the Employment Tribunal, was concerned to contend what would be a proper approach to whatever facts the Tribunal found. In our judgment he is entitled to elaborate his arguments on this aspect of the case by reference to the particular facts found by the Tribunal without it involving him raising a new point. The point is essentially the same. He is simply addressing the detailed application of that point in the light of the particular findings of fact made by the Tribunal.[27]His argument is as follows. If one looks at the findings of fact of the Employment Tribunal and relates it to the evidence it is manifest that their finding that "at most" eight staff must be deemed to have been transferred, reflects certain findings of fact. Those are that seven of those staff would have been employed in the embedded Desktop function. One only of the Atos staff would have been employed elsewhere, in connection with the LAN function. Mr Jeans' argument then proceeds: Compaq, by virtue of the reduction in the quantity and level of service, and by virtue of its different method of organising the work, only required seven staff to carry out the embedded Desktop function. Under the Atos regime the Tribunal found that some 17 embedded staff had been required to conduct that Desktop function. Accordingly, on a purely numerical basis, the deemed transferred staff were a minority even of the Atos Desktop staff. If, however, one were to approach realistically the question "does the seven deemed transferred Desktop staff constitute a major part of the workforce required to perform the undertaking?" then the analysis is completely different. On any view the Lucent embedded functions were such that the performance of the Desktop function absorbed the major part of the Atos staff assigned to the G1 contract. Accordingly, the transfer from Atos to Compaq of the entirety of the staff which Compaq needed to perform that function may well also constitute a major part of the workforce assigned to that part of the undertaking. The fact that such a major function could be undertaken for Compaq by fewer employees after the transaction than before is a reflection of the reduction in the scale of the operation and the different method of discharging it. Whilst those matters may, in certain cases, result in a conclusion that the economic entity has lost its identity, the Employment Tribunal in this case in paragraph 55 had expressly considered whether the operation "is actually continued or resumed" and decided contrary to Compaq's submissions based on changes in scale and organisation, that it did. Thus, Mr Jeans concludes, had the Tribunal looked realistically at the question whether the deemed transferred staff constituted "a major part" of the workforce it would have been bound to conclude that it did.[28]Mr Rose says that this is an illegitimate approach. He says that all the Tribunal is entitled to do is to compare the workforce which is either transferred, or deemed transferred, with the workforce which existed immediately prior to the transaction. Any reduction in the workforce required, even if it arises because of a reduction in scale or a different way of organising the work, may not be taken into account in considering this simple examination of the relative sizes of the workforce before and after the transaction. Whilst we can see that this will often be the case, it seems to us that Mr Rose puts it too high in saying that it can never be legitimate to view the matter in the way argued for by Mr Jeans. The mere fact that an undertaking has reduced in size so as to require fewer people to do it must be a factor to be considered in the overall assessment of whether the entity has retained its identity. On some occasions it will point to the entity changing its identity, but on other occasions it will not. In our judgment there is much force in what Mr Jeans argues, namely that the Tribunal has failed to consider this factor by reference to the question whether the Atos staff who must be deemed to have transferred, constituted a major part of the workforce. It therefore follows that they have failed adequately to address this question and to this extent, in our judgment, the appeal must succeed.[29]Mr Jeans sought to argue that as all the findings of fact have been made by the Tribunal and all the evidence supporting it is contained in the papers, that we are in as good a position as the Tribunal to carry out that exercise and to consider whether the deemed transferred staff constituted a major part of the workforce. He did so on the basis of his contention that the Tribunal had found as a fact that all seven of the staff required by Compaq to discharge the Desktop function must be deemed to have been transferred from Atos to Compaq. After the close of oral argument, however, Mr Rose for Compaq made further written submissions to which Mr Jeans has replied in written form. Those submissions were to the effect that as a matter of fact, of the Desktop function staff, possibly as few as four were recruited externally by Compaq and so could be properly be said to have constituted "deemed transfers". Were that to be the case then much of the Atos argument would, as a matter of fact, be undermined.[30]Despite the argument of Mr Jeans that we are in a position to make this decision, it is our judgment that we are not. The Employment Tribunal did not make any specific finding as to the number of deemed transfers. Its conclusion was that that number was "at most" eight. For the purpose of its reasoning it did not have to go beyond that as they were concerned only with a numerical approach. It is plain that there was evidence which suggested that the number might have been as few as four in respect of the Desktop function and one in respect of LAN. That depends on the previous employment history of the persons who, post the transaction, performed the Desktop function. In our judgment this aspect of the matter remains clouded in uncertainty. It will therefore require some further evidence to be led and specific findings of fact to be made. Accordingly, although we are aware of the potential inconvenience to the parties, it is our judgment that the appropriate Order is for this limited issue to be remitted to the same Tribunal for findings of fact to be made and then for an assessment of this aspect of the multi-factorial assessment to be conducted by reference to the question whether the deemed transferred workforce constituted "a major part" of the economic entity.[31]There remains the appeal and cross-appeal in respect of the conclusion of the Tribunal on assignment of specific individuals to the G1 contract. The main appeal concerns Mr Henley and Mr Shaer. The Decision of the Tribunal in paragraph 52 was to the effect that they were not directly assigned to the G1 work and accordingly, they would not be transferred were the ultimate outcome to be that the work undertaken by the Lucent embedded staff constituted an economic entity which retained its identity. In effect, the Appellant's argument is that the Tribunal was perverse in so concluding. In our judgment, having been taken through the evidence respectively by Mr Jeans and Mr Rose, and by Mr Short, who has represented Amicus and the individual Applicants, we are satisfied that there was an evidential basis upon which the Tribunal properly could find as a fact that neither Mr Henley nor Mr Shaer were assigned to the G1 work. Therefore the appeal on this matter is rejected. Conversely, Mr Rose had a cross-appeal that a certain number of the individuals whom the Tribunal decided were assigned to the G1 work ought not to have been so decided. The Tribunal, in paragraph 52, did refer to the fact that there were question marks over several of the persons whom they had included in the loose grouping which was assigned to the G1 work. They referred, however, to the liberal approach which they had adopted earlier in the Decision. Those persons were Anne Whiteside, Jason Muir, Paul Fisher, Lynn Evans, Brendan Rice and Matthew Dunn. Having had regard to the written submissions which were furnished by Mr Rose and Mr Jeans in respect of each of these, and the limited oral submissions which were made in respect of Anne Whiteside, we are satisfied that the Tribunal was entitled as a matter of fact to make the Decisions which it did in respect of the assignment of those individuals to the G1 work. Accordingly, the cross-appeal is dismissed.[32]Finally, however, there is the matter of Mr Miles. He was one of the Applicants. He was a person who worked in the Desktop function. He also appears to have done certain work in respect of LAN. Whichever it was, and whichever was the proportion of work, he was, on any view, assigned to the G1 work. Unfortunately the Tribunal does not mention him at all in paragraph 15 as being subject to their decision either that he was or was not assigned to the G1 work. Although there is no explanation for this apparent omission by the Tribunal, we are quite satisfied that it was a slip rather than a deliberate decision. Nonetheless, it remains the case that the Tribunal did not make a necessary finding of fact as far as Mr Miles is concerned. Mr Jeans did not include this apparent error by the Tribunal in the original grounds of appeal. He has applied before us for permission to amend the grounds of appeal to include that omission to make a necessary decision. Although it is very late in the day, it seems to us that the justice of the case, as far as Mr Miles is concerned, can only be met by permitting Mr Jeans to amend his grounds of appeal so as to assert that failure to make a necessary decision in respect of Mr Miles. We therefore give him permission and we uphold his appeal insofar as we conclude that there was an error on the part of the Tribunal in failing to make a necessary finding of fact. We are not in a position to make any final decision on whether or not Mr Miles was assigned to the G1 contract. As we are ordering that the matter be remitted to the Tribunal to consider certain limited matters concerning the staffing of the Desktop function, we are content to remit the matter to the Tribunal to consider the matter of Mr Miles' assignment to the G1 contract as well.[33]In conclusion, therefore, the appeal of Atos succeeds to the limited extent referred to above and we order that the matter be remitted to the same Tribunal to make limited further findings of fact and to make decisions, based upon their findings of fact, on the question of Mr Miles's assignment for the G1 contract and on whether the deemed transfer of Atos employees to Compaq, regarded from the viewpoint of whether they constituted a major part of the G1 Lucent embedded work makes the difference in the overall mutli-factorial assessment of whether the economic entity which existed prior to the transaction was transferred to Compaq.