METROPOLITAN RESOURCES LTD v (1) CHURCHILL DULWICH LTD - IN LIQUIDATION (2) MARTIN CAMBRIDGE & OTHERS [2009] UKEAT 0286_08_2406

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2009] UKEAT 0286_08_2406Case No Appeal No. UKEAT/0286/08Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
METROPOLITAN RESOURCES LTDAPPELLANT(1) CHURCHILL DULWICH LTD - IN LIQUIDATION (2) MARTIN CAMBRIDGE & OTHERSRESPONDENT
Before
His Honour Judge BurkeDate 24 June 2009
[1]APPEARANCES For the Appellant MR COLIN BOURNE (of Counsel) Instructed by: NatWest Mentor Services (Employment Law Litigation Department) 2nd Floor, Sapphire West 550 Streetsbrook Road Solihull West Midlands B91 1QY For the First Respondent MR BEN COOPER (of Counsel) Instructed by: Messrs Thompsons Solicitors Congress House Great Russell Street London WC1B 3LW For the Second Respondent No appearance or representation by or on behalf of the Second Respondent SUMMARY TRANSFER OF UNDERTAKINGS: Transfer Migrant Helpline, on behalf of the Home Office; had a contract with Churchill Dulwich Ltd – in Liquidation ('CD') by which CD provided accommodation to asylum seekers. Before that contract expired the Migrant Helpline entered into a replacement contract with Metropolitan Resources Centre Ltd ('MRL) for such provision at a different location; CD received no more asylum seekers and had only a small number of asylum seekers who because of ill-health could not be moved on immediately; all other asylum seekers were from 26.1.07 allocated to MRL. When CD's contract expired on 02.4.07 CD's employees claimed that there had been a transfer to MRL of their employment under Reg 3(1)(b) of TUPE 2006 i.e. a service provision change. The Employment Tribunal on a preliminary issue held that there had been such a transfer. Held(1) that the approach in Cheeseman did not apply to the question – Was there a service provision charge; the concept of service provision change is a new statutory concept(2) in considering that question the Employment Tribunal had to consider whether the service provided after the change was fundamentally or essentially the same as that provided before the change(3) the answer to that was a matter of fact.(4) The fact that the transfer did not wholly take place on one day, that the employees did not leave CD on the date identified as the date of transfer and that the providers used different locations were not individually or collectively fatal to the existence of a service provision charge; the Employment Tribunal had considered these matters in reaching its factual conclusion.(5) The Tribunal had correctly directed themselves and reached a factual conclusion which was open to them. HIS HONOUR JUDGE BURKE QC The nature of the appeal This appeal raises, so far as is known, for the first time at an appellate level, questions as to the application and effect of the new Transfer of Undertakings (Protection of Employment) Regulations 2006 (" TUPE 2006 ") which replaced their predecessors of 1981 with effect from 6 April 2006. The Claimants before the Employment Tribunal, ten in number (one of whom later withdrew) claimed unfair dismissal, wrongful dismissal, unpaid wages and unpaid holiday pay; one of them, Mr Cambridge, has been treated as lead Claimant, before the Tribunal at the hearing which we will shortly describe, he represented himself and the other remaining Claimants. Their claims were originally made against the present Appellants, the First Respondent before the Tribunal, Metropolitan Resource Limited (whom we shall call "MRL") on the basis that their employment had been transferred to MRL from their previous employers, Churchill Dulwich Limited (whom we shall call "CD"). MRL resisted those claims on various grounds; they denied that there had been a relevant transfer under TUPE 2006 ; they also claimed that there was no jurisdiction in the Tribunal to hear the claims because the unfair dismissal claims were presented out of time and, in relation to the claims other than unfair dismissal, that there had been no grievance satisfying the requirements of Section 32 of the Employment Act 2002 .[2]CD were then joined into the proceedings as Second Respondent and put in a response in which they asserted that there had been a transfer under TUPE 2006 of the Claimants' employment to MRL; they took the same time point, in respect of all claims, as that taken by MRL.[3]The Tribunal decided to hold a pre-hearing review to ascertain whether there had been a relevant transfer and who was the correct Respondent and also to decide upon the jurisdictional issues raised by the Respondents. That hearing took place at the London South Employment Tribunal before Employment Judge Spencer on 14 and 15 April 2008. She did not have time to resolve the jurisdictional issues; but she held, in a reserved judgment sent to the parties on 9 May 2008, that there had been a relevant transfer from CD to MRL on 26 January 2007 and that therefore MRL were the correct Respondents to the claims.[4]MRL now appeal against those conclusions. They have been represented before us, as before the Tribunal, by Mr Colin Bourne of Counsel. The Claimants have been represented by Mr Ben Cooper of Counsel. Since the Tribunal hearing CD have gone into creditors' voluntary liquidation; neither they nor the liquidators have been present or represented before us. We have a letter from Vantis Business Recovery Services on behalf of the joint liquidators informing us that they "will not be resisting the application". However we have no doubt that the arguments which, if not in liquidation, they would or could have put forward have been advanced by Mr Cooper; for it is obviously important to the Claimants to have a solvent as opposed to an insolvent Respondent as the target of their claims.[5]We are grateful to Mr Bourne and Mr Cooper for their helpful submissions. The statutory provisions[6]Regulation 2(1) of TUPE 2006 provides, as a definition of "relevant transfer", as follows:
"'relevant transfer' means a transfer or a service provision change to which these Regulations apply in accordance with regulation 3 and 'transferor' and 'transferee' shall be construed accordingly and in the case of a service provision change falling within regulation 3(1)(b), "the transferor" means the person who carried out the activities prior to the service provision change and "the transferee" means the person who carries out the activities as a result of the service provision change."
[7]Regulation 3(1), (2), (3) and (6) provide as follows:- "3. A relevant transfer(1) These Regulations apply to— (a) a transfer of an undertaking, business or part of an undertaking or business situated immediately before the transfer in the United Kingdom to another person where there is a transfer of an economic entity which retains its identity; (b) a service provision change, that is a situation in which— (i) activities cease to be carried out by a person ("a client") on his own behalf and are carried out instead by another person on the client's behalf ("a contractor"); (ii) activities cease to be carried out by a contractor on a client's behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by another person ("a subsequent contractor") on the client's behalf; or (iii) activities cease to be carried out by a contractor or a subsequent contractor on a client's behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by the client on his own behalf, and in which the conditions set out in paragraph (3) are satisfied.(2) In this regulation "economic entity" means an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.(3) The conditions referred to in paragraph (1)(b) are that— (a) immediately before the service provision change— (i) there is an organised grouping of employees situated in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client; (ii) the client intends that the activities will, following the service provision change, be carried out by the transferee other than in connection with a single specific event or task of short-term duration; and (b) the activities concerned do not consist wholly or mainly of the supply of the goods for the client's use. (6) A relevant transfer— (a) may be effected 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"[8]There is a definition, therefore, of "economic entity"; there is no definition of "a service provision change" except that provided by Regulation 3(1)(b).[9]Regulation 4(1) provides that:
"4 Effect of relevant transfer on contracts of employment —(1) Except where objection is made under paragraph (7), a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee."
[10]While those familiar with employment law are likely to be highly familiar with a transfer of undertaking where there is a transfer of an economic entity retaining its identity in the hands of the transferee, a transfer where there is a service provision change is a new statutory concept which was not to be found in TUPE 1981 ; that is why there is no appellate decision as to what may or may not fall within the words of Regulation 3(1)(b) of TUPE 2006 .[11]It is clear that the provisions in Regulation 3(1)(b) for transfer by service provision change arise not from the Acquired Right Directive (2001/23/EC) but from Section 38 of the Employment Relations Act 1999 , which provides that:
"The Secretary of State may by regulations make the same or similar provision in relation to the treatment of employees in the circumstances other than those to which the Community obligation applies (including circumstances in which there is no transfer, or no transfer to which the Community obligation applies)"
. The facts[12]The Claimants were until early 2007 all employed by CD at Barry House in East Dulwich. Barry House is a hostel at which CD provided accommodation to asylum seekers. The Home Office had a contract with a charitable organisation called Migrant Helpline ("MH") for the provision of such accommodation; and MH in turn had contracts with a number of providers of such accommodation in the London area.[13]One of those contracts, dated 1 October 2004, was for the provision of accommodation at Barry House for persons placed there by MH by Hytyme Management Services Limited (described in the contract as "the service provider"). That contract was to run for six months; but it must have been regularly renewed; for on 23 March 2006 Hytyme, by then in administration, sold its business to CD who thus took it over. MH were not a party to that sale agreement but must have known of it; for thereafter CD operated the contract with MH as Hytyme had done before; and the relevant employees were transferred to the employment of CD by a traditional transfer under TUPE 1981 .[14]Under what was now their contract with MH, CD were obliged to provide 140 beds, 100 of which were paid for whether occupied by asylum seekers or not and 40 of which were for what were called "spot bookings". The asylum seekers would stay at Barry House for a period lasting from one or two nights up to four weeks before moving to dispersed accommodation, save in the case of longer term residents who could not be easily dispersed for medical reasons. MH also provided to the Home Office "wraparound services" which consisted of interviewing and screening the asylum seekers and providing them with information.[15]In 2006, in order to speed up the asylum-seeking process, the Home Office changed the system, requiring that asylum seekers should spend only one or two nights in London before dispersal. This had the effect of requiring at Barry House - and no doubt at similar establishments - more intensive booking in and out of asylum seekers and more changing of bed linen. The two systems overlapped; it took time for the new system to be rolled out; so in 2006 Barry House had a mix of residents, some being processed under the new and some under the old system.[16]In mid-September 2006 MRL began to provide accommodation to MH on a short term contract, to 1 November 2006, at Coombe Farm, Croydon, and they made provision over the Christmas and New Year period of 2006/2007. The Home Office were impressed by MRL's services, particularly by their data recording and the quality of information flow provided. They also considered that the risk of asylum seekers absconding was lower at Coombe Farm than at Barry House. They decided, therefore, that their contract with CD for the provision of accommodation at Barry House should be allowed to continue to the end of its six month renewal but that asylum seekers should be diverted to Coombe Farm immediately. A contract was urgently drawn up between MH and MRL in almost identical terms to that used by MH to govern its relationship with Hytyme and then with CD, for the period from 26 January 2007 to 26 March 2007. The only contractual differences identified by the Tribunal were that the location of the provision of services was to be Coombe Farm, not Barry House, and the recitals indicated the intention to provide accommodation to asylum seekers for one or two nights only. MRL were to provide 120 beds, 70 permanent and 50 spot booked.[17]From 26 January 2007 all asylum seekers who would previously have been allocated to Barry House were, instead, allocated to Coombe Farm; from that date MH moved their staff who had worked at Barry House to Coombe Farm. The Tribunal found that the accommodation at Coombe Farm was intended to be instead of rather than additional to the accommodation at Barry House (see paragraph 14 of the judgment).[18]By the end of January 2007 there were at Barry House only 10 or 15 asylum seekers who had been there before 26 January and had not been dispersed because of medical problems; over the next few weeks those asylum seekers were also dispersed; but CD's contract with MH did not expire until the end of March, it being MH's practice when they ceased to use a provider to let that provider's contract expire rather than to assign it (or terminate it). Thus, nominally at least, CD were obliged to provide bed spaces until the end of March although, as all parties knew, they were not going to be and were not used.[19]The ten Claimants continued to work (insofar as there was work to do) at Barry House until 31 March 2007. CD wrote to MH in February asserting their belief that TUPE 2006 applied or would apply to them and asking for the name of the new provider. When they received their name they wrote to MRL informing them about the Claimants and stating that ten employees - the Claimants - were assigned to the service transferred to MRL. On 2 April, MH's contract with CD having expired, the Claimants, pursuant no doubt to advice, presented themselves for work at Coombe Farm. They were interviewed and sent home. It was not in dispute that they were dismissed either by MRL or CD. The Tribunal's Decision[20]The issue before the Tribunal can be simply expressed, namely, was there a relevant transfer under Regulation 3(1)(b) of TUPE 2006 . In the circumstances of this case two questions arose, namely were there activities which ceased to be carried out by CD on behalf of a client (MH) which were carried out instead by a subsequent contractor (MRL) on behalf of MH and were the conditions referred to in Regulation 3(3) satisfied?[21]It was not suggested in this case that the conditions in Regulation 3(3) were not satisfied. The Employment Tribunal, therefore, concentrated on the first of those questions. The Employment Judge, in her conclusions section at paragraph 23, identified the issue as whether activities ceased to be carried out by CD on behalf of MH and were carried out instead by MRL. She found, at paragraph 24, that the essential service or activity provided by MRL was the same as that provided by CD. She said at paragraph 24:
"I accepted Mr Makin's broad submission that the activities have to be defined relatively broadly. In my view the relevant "activities" are the provision of good quality accommodation to asylum seekers together with associated administration and reporting services on behalf of Migrant Helpline. I also accept Mr Makin's contention that it matters not whether the accommodation was provided for one night or longer, the essential service or activity provided by MRL was the same as that provided by Churchill Dulwich. As Mr Cambridge said in evidence, while a quick turn around required more intense support in the provision of clean laundry and the out of hour availability of reception staff the basic service provided was the same. I am also satisfied that had the contract not been signed with MRL, Barry House would have provided that overnight facility in the same way as was required of Coombe Farm. It was apparent that Barry House had started taking overnight clients under the NAM process and that Mr Derby had felt that there was no need to change the terms of the written contract in order to require this. It was his view that the fact that the clients spent a shorter period in the hostel did not require a contract change."
[22]She continued at paragraph 25 as follows:
"I do not accept that the place at which the activity was provided was integral to the definition of the activity. If that was so the Home Office would not have been so willing to change to Coombe Farm and then back to Barry House as they did.

(a) Cheeseman is concerned with how to identify an "undertaking"

. There is no reference to the concept of an undertaking in the definition of a service provision change."[23]At paragraph 26 she found that the transfer took place on 26 January 2007 when the new contract with MRL was entered into and no new asylum seekers were sent to Barry House. She said: "I also find that the transfer took place on 26 January 2008 when the new contract with MRL was entered into and no new clients were sent to Barry House. The fact that some 15 or 20 asylum seekers (most of whom had health issues and who were not suitable for transfer to Coombe Farm) transferred at a later date to a different venue does not negate the fact that the core activities had been diverted from Barry House to Coombe Farm on 26 th January. I cannot accept that a consequence of the judgment in Celtec is that if all the activities do not cease at the same moment there can be no transfer. Submissions[24]Counsels' submissions can, I hope without disservice to them, be summarised as below. On behalf of MRL(1) On the facts of this case a transfer of undertaking would never have been established under the 1981 regulations; there was nothing which approached the transfer of an economic entity. While Regulation 3(1)(b) provided for what was admittedly a new form of transfer, the approach developed in and applied since Cheeseman v Brewer Contracts Limited [2001] IRLR 144 , of adopting a multi-factorial approach to the two essential questions under TUPE 1981 , namely was there a stable economic identity and was there a transfer of that economic identity retaining its identity in the hands of the transferee, should be applied to the two questions which now arise where service provision change is relied upon, namely what was the service provision and had it been transferred?(2) If that approach had been adopted by the Tribunal in the present case, the Tribunal would have had to have regard to the following essential differences between the services provided by CD and those provided by MRL: (a) CD were obliged to provide services to MH only at Barry House; but MRL were obliged to provide services only at Coombe Farm. (b) Coombe Farm was a more secure site. (c) MRL provided information services which CD did not provide. MRL were able to provide services by different employees; no employees (other than the Claimants belatedly) went from Barry House to Coombe Farm; and no assets transferred from CD to MRL.(3) The transfer could only occur at one point of time (see Celtec Limited v Astley [2006] IRLR 635 ). In concluding that the transfer occurred on 26 January 2007 the Tribunal failed to have regard properly or at all to the following facts: (a) Both CD and the Claimants had, until closing submissions, put their cases on the basis that the transfer took place when the CD contract expired on 31 March 2007. (b) The Claimants continued to work at Barry House after 26 January 2007 and CD continued to provide accommodation there until 31 March 2007; only at that date did the Claimants stop working there for CD.(4) The necessary multi-factorial approach would have taken into account all of these features; but the Tribunal did not apply such an approach as it should have done and did not take all of those facts into account or properly appreciate their importance.(5) The Tribunal should not have taken into account matters arising after 31 March 2007, having disallowed cross-examination on behalf of MRL upon such matters. On behalf of the Claimants (1) The inclusion within the definition of a relevant transfer in TUPE 2006 of service provision change provided, for the first time, that a TUPE transfer could occur without it being necessary to prove the existence and transfer of a stable economic entity in the hands of the transferee which retained its identity in the hands of the transferor. The intention behind the change was to remove the well known uncertainties and difficulties which had arisen under TUPE 1981 , to produce clarity for all and to eliminate attempts by transferees to arrange matters so as to avoid the effect of TUPE. (2) In that context the multi-factorial approach established in Cheeseman , which applied only to the questions "was there a stable economic entity and did it retain its identity in the hands of the transferee" was inappropriate. To achieve the intention of the statutory change a broad and inclusive approach was necessary which focused not, as under Regulation 3(1)(a), on concepts of economic entity but on the activities carried on by the transferor and the transferee. The essential question should be whether the core or fundamental activity carried out by the alleged transferor ceased to be carried out by that party and was carried out instead by another party. A detailed examination of the process in which the service provision was carried out by the alleged transferor and the alleged transferee was not necessary or appropriate. (3) If that approach was adopted, the Tribunal had approached the task of deciding whether there had been service provision change in this case correctly. In particular in its conclusions section at paragraph 24, where it found that the essential service or activity provided by MRL was the same as that provided by CD, the Tribunal had applied, as central to its decision, the correct test. The Tribunal having applied the correct test, whether this case fell within or outside that test was an issue of fact; and MRL's arguments as to differences of detail between the manner in which CD provided the service to MH and the manner in which MRL provided that service were no more than perversity arguments; but it had been open to the Tribunal on the primary facts to reach the factual conclusions which it reached in paragraph 24. (4) On that analysis the differences relied upon by MRL demonstrated neither any error of law on the part of the Tribunal nor any perversity. The Tribunal was entitled to hold as it did that the relevant activity was "the provision of good quality accommodation to asylum seekers together with associated administration and reporting services on behalf of Migrant Helpline". (5) As to Mr Bourne's third point, it was not necessary that all aspects of the relevant activity had to be transferred to the transferee at the same point of time. A relevant transfer, by transfer of undertaking under Regulation 3(1)(a) or by service provision change under Regulation 3(1)(b) can be effected by a series of transactions (see Regulation 3(6)(b)). Celtec was not a decision as to whether a transfer had taken place but as to when it took place.(6) As to Mr Bourne's last point, the Tribunal only referred to subsequent matters in one respect in paragraph 26 of its judgment; it was permissible for the Tribunal to do so; the matter to which it referred was not in dispute. Discussion[25]I was referred to extensive extracts from the Explanatory Memorandum to TUPE 2006, produced by the Department of Trade & Industry (as the relevant Ministry then was) and laid before Parliament before the new Regulations went through the appropriate Parliamentary procedures, and also to a document entitled "Final Regulatory Impact Assessment" dated January 2006, also produced by the Department of Trade & Industry which set out the purpose and intention of the proposals for change included in the 2006 Regulations. No objection was made to the use of these documents; but I was at the time and remain somewhat wary of the extent to which those documents can properly be used as an aid to the construction of secondary legislation. I was not asked to consider the principles set out by the House of Lords in Pepper v Hart [1993] AC 593 .[26]However, having reconsidered those documents, I regard them as doing no more than confirming what I would have concluded from the legislative history and my knowledge of the practical difficulties thrown up by the original Regulations and by judicial decisions, both domestic and European, upon those Regulations and upon the Acquired Rights Directive which those Regulations were intended to put into effect in the domestic context; and that is that the introduction in TUPE 2006 of the concept of a transfer of undertakings by service provision change was intended to remove or at least alleviate the uncertainties and difficulties created, in a variety of familiar commercial settings, by the need under TUPE 1981 to establish a transfer of a stable economic identity which retained its identity in the hands of the alleged transferee, particularly in the case of labour-intensive operation, by including within the definition of a transfer of undertaking the situations falling within Regulation 3(1)(b) in which the conditions set out in Regulation 3(3) were satisfied. The three situations falling within Regulation 3(1)(b) can shortly be described as outsourcing (Regulation 3(1)(b)(i)), in-sourcing (Regulation 3(1)(b)(iii)), and change in the provision of activities or services carried out on behalf of a client between one contractor and another (Regulation 3(1)(b)(ii)). All these situations are well-known to employment lawyers to have caused problems under TUPE 1981 . The introduction of Regulation 3(1)(b) enables a transfer to be established in any of those three situations if the activities previously carried out by client or contractor have ceased to be so carried out and, instead, are carried out by a contractor or a new contractor or by the client.[27]"Service provision change" is a wholly new statutory concept. It is not defined in terms of economic entity or of other concepts which have developed under TUPE 1981 or by community decisions upon the Acquired Rights Directive prior to April 2006 when the new Regulations took effect. The circumstances in which service provision change is established are, in my judgment, comprehensively and clearly set out in Regulation 3(1)(b) itself and Regulation 3(3); if there was, immediately before the change relied upon, an organised grouping of employees which had as its principal purpose the carrying out of the activities in question, the client intends that those activities will be carried out by the alleged transferee, other than in connection with a single specific event or a task of short term duration, and the activities do not consist totally or mainly of the supply of goods for the client's use, and if those activities cease to be carried out by the alleged transferor and are carried out instead by the alleged transferee, a relevant transfer exists. In contrast to the words used to define transfer in TUPE 1981 the new provisions appear to be straightforward; and their application to an individual case is, in my judgment, essentially one of fact.[28]In this context there is, as I see it, no need for an Employment Tribunal to adopt a purposive construction as suggested by Mr Cooper, as opposed to a straightforward and commonsense application of the relevant statutory words to the individual circumstances before them; but equally and for the same reasons there is no need for a judicially prescribed multi-factorial approach, as advanced by Mr Bourne, such as that which has necessarily arisen in order to enable the Tribunal to adjudge whether there was a stable economic entity which retained its identity after what was said to be a transfer falling within what is now Regulation 3(1)(a).[29]In a case in which Regulation 3(1)(b) is relied upon, the Employment Tribunal should ask itself simply whether, on the facts, one of the three situations set out in Regulation 3(1)(b) existed and whether the conditions set out in Regulation 3(3) are satisfied.[30]The statutory words require the Employment Tribunal to concentrate upon the relevant activities; and tribunals will inevitably be faced, as in this case, with arguments that the activities carried on by the alleged transferee are not identical to the activities carried on by the alleged transferor because there are detailed differences between what the former does and what the latter did or in the manner in which the former performs and the latter performed the relevant tasks. However it cannot, in my judgment, have been the intention of the introduction of the new concept of service provision change that that concept should not apply because of some minor difference or differences between the nature of the tasks carried on after what is said to have been a service provision change as compared with before it or in the way in which they are performed as compared with the nature or mode of performance of those tasks in the hands of the alleged transferor. A commonsense and pragmatic approach is required to enable a case in which problems of this nature arise to be appropriately decided, as was adopted by the Tribunal in the present case. The Tribunal needs to ask itself whether the activities carried on by the alleged transferee are fundamentally or essentially the same as those carried out by the alleged transferor. The answer to that question will be one of fact and degree, to be assessed by the Tribunal on the evidence in the individual case before it.[31]The only appellate decision, prior to the hearing of this appeal, in which Regulation 3(1)(b) has been considered is that of the Employment Appeal Tribunal (Langstaff J presiding) in Kimberley Group Housing Limited v Hambley [2008] IRLR 682 , which also concerned the provision of accommodation and related services for asylum seekers, on that occasion in the northeast of England. The transferors provided such services in Middlesbrough and Stockton under contract with the Home Office. On the expiry of the transferors' contract, contracts to succeed them were awarded to two different organisations, each of which was to operate in both towns. There were difficulties arising from the history which straddled 6 April 2006, when TUPE 1981 was replaced by TUPE 2006 , which are irrelevant for present purposes; applying TUPE 2006 the Tribunal found that there was no transfer under Regulation 3(1)(a) but there had been a service provision change within Regulation 3(1)(b). It was not suggested on appeal that the Tribunal had been in error in so deciding; the EAT had to consider how the regulations operated in a case in which there was a service provision change to more than one transferee; the EAT did not need to address the question "what constitutes service provision change?" There are, however, two passages in the EAT's judgment to which it is helpful to refer. At paragraphs 27 and 28 of their judgment the EAT said:
"27. If, however, one is looking at reg. 3(1)(b) having excluded reg. 3(1)(a) (as the tribunal here did in conclusions which, on that, are not appealed from and so we do not revisit) it seems to us that the first question for the tribunal is to identify the relevant activities or as it may be relevant activity. It is only when that has been done, very much as if this were a reg. 3(1)(a) transfer, where a tribunal would begin by seeking to identify the relevant economic entity, that the tribunal can see whether or not those activities come within reg. 3(1)(b)(ii), in this case as being activities which cease to be carried out by a contractor on a client's behalf and are carried out instead by another person on the client's behalf. 28. As to whether there was here a service provision change the tribunal identified the activities as we have described and no one challenges that description. It seems to us that care may need to be taken by a tribunal in deciding what it is that constitutes the relevant activities. If, for instance, here the relevant activities had been described as 'maintenance operations' then it is possible that there might have been a different conclusion, but we cannot consider that further. The tribunal found that the activities of providing suitable accommodation and related supported services to asylum seekers in the town concerned had been carried out by a contractor on a client's behalf. That is all that reg. 3(1)(b)(ii) looks at: to see that those activities have ceased."
And at paragraph 35 the Employment Appeal Tribunal said:
"35. We conclude that the tribunal here was entitled to come to the view that there was a service provision change. It may be that there are some circumstances in which a service which is being provided by one contractor to a client is in the event so fragmented that nothing which one can properly determine as being a service provision change has taken place. This tribunal considered whether that was the case here and concluded it was not. We think that since there are two overlapping contracts now providing for activities which were previously provided by one provider that the tribunal was entitled to come to that view. Having come to that view the question then turns to what the consequence is. We observe that when a tribunal is examining the question whether there is a service provision change or not it is of course entitled to, and must, look at all the facts and their implications it he round, and it may be that a tribunal wishes to take into account as indicating that there is no service provision change any difficulties in determining who should take responsibility for an employee's contract after any given date. But as a matter of clarity and logical progression having taken that into account in determining whether there is a service provision change, as this tribunal here in our view was entitled to do, we turn now to what the consequence is and how reg. 4 operates."
[32]The first of these two passages is consistent with and more simply expressed than the way in which I have described the Employment Tribunal's task in a service provision change case; and I respectfully adopt it; the second is applicable to the specific problems which arose in Kimberley . Both emphasise the extent to which the Tribunal's task in a case of this nature is one of fact.[33]If there had been any further appellate decision on Regulation 31(b) since the argument in this appeal I would have expected Counsel to inform me of it; I have in any event checked the EAT website and found nothing of assistance.[34]For the reasons I have set out there is, in my judgment, in a Regulation 3(1)(b) case no call for a formal list of factors which the Tribunal must consider before it can make a decision as to whether there was or was not a relevant transfer, in contrast to the position in a Regulation 3(1)(a) case where the Cheeseman approach is required. The Tribunal did not, in my judgment, err in law in failing to adopt the Cheeseman approach.[35]Having thus resolved the argument before me as to how Regulation 3(1)(b) should be applied, I can turn to the specific arguments advanced.[36]At paragraph 24 of their judgment the Tribunal applied the correct test when it looked for the essential service or activity provided by MRL; and in finding that it was the same as that provided by CB the Tribunal reached a factual finding which was open to them. The Tribunal was alive to all of the differences on which Mr Bourne relies. The difference in location was expressly considered at paragraphs 25 and 27; the extra services provided by MRL were expressly referred to in paragraph 24; the fact that MRL's operation began and continued without any of CD's employees, management or otherwise, was fully appreciated by the Tribunal which found that the CD employees did not go to Coombe Farm until 2 April and that MRL took on their own employees when they entered into their contract with MH; the Tribunal also expressly referred to the difference between Coombe Farm and Barry House in terms of security. Despite those differences, to which it cannot be said, reading the judgment as a whole, that the Tribunal failed to pay regard, the Tribunal found that the activities carried on by MRL amounted essentially to the provision of good quality accommodation to asylum seekers together with associated services and that they were the same as those provided by CD.[37]None of the differences relied upon by Mr Bourne was said or could be said to be such as to make it impossible for the essential service provided by CD and by MRL to be regarded as the same. As an example, a difference in the location from which the transferee performs the relevant activities instead of the transferor is highly unlikely, of its own, to be determinative against the existence of a service provision change. It is likely that a situation in which a replacement service provider carries out an activity instead of a predecessor but from a different location will frequently arise - as, for example, in the case of building maintenance contracts which have historically been an area in which the existence of a TUPE transfer has had to be considered. Equally, as it seems to me, the addition, in the hands of a replacement contractor, who is performing all of the services carried out by his predecessor, of some additional duty or function is unlikely, unless the addition is of such substance that the activity then being carried on is no longer essentially the same as that carried on by the predecessor, to negate the existence of a transfer under Regulation 3(1)(b). It is for the Tribunal in each case to assess, on the facts, taking into account any material differences, whether the alleged transferee is performing essentially the same activity as that of the alleged transferor. The Tribunal carried out that task in this case and came to a conclusion which was permissible and could not be said to have been perverse.[38]On the issue as to the time of the transfer, I prefer Mr Cooper's submissions. Regulation 3(6)(b) does indeed expressly provide that a TUPE transfer can be affected by a series of transactions; that subparagraph applies alike to Regulation 3(1)(a) and Regulation 3(1)(b) cases; and it is likely in practice that the change pursuant to which the transferee performs the relevant activity instead of the transferor may be achieved by a series of steps or transactions over a period of time. It is unlikely that a service provision change will in practice always be entirely achieved on one day; and I have no doubt that the law is not such as to require that it should be so achieved. While I do not agree with Mr Cooper that the effect of the House of Lords decision in Celtec can be deflected on the basis that Celtec related to the construction of TUPE 1981 in the light of the appropriate construction of the Acquired Rights Directive and should not apply to a transfer under Regulation 3(1)(b), such a transfer, being a creature of domestic legislation not falling within the Directive, I accept his alternative argument that Celtec requires the Tribunal to find one date on which any type of TUPE transfer occurred on the facts before them but does not require that all the steps which constitute such a transfer must take place on the same day. The issue in Celtec was not whether there had been a TUPE transfer but when it took place and in particular whether it had taken place over a period; see paragraphs 5 and 6 in the speech of Lord Bingham of Cornhill and paragraph 24 in the speech of Lord Hope of Craighead.[39]The Tribunal, in a case in which the date of the alleged transfer is in issue, must, in my judgment, determine the date at which the essential nature of the activity carried on by the alleged transferor ceases to be carried on by him and is instead carried on by the transferee. The ascertainment of that date must be a question of fact. It is, at least in theory, possible that the facts may be so lacking in clarity that such a date cannot be ascertained; but such a case is likely to be rare; and in this case the Tribunal were entitled to conclude that the transfer took place when MRL entered into its contract with MH, after which date no new asylum seekers were sent to Barry House and all were sent instead to Coombe Farm. The Tribunal was not bound to regard the continued presence at Barry House over the few weeks following 26 January of some 10 to 15 asylum seekers who stayed there for medical reasons as, of itself, sufficient to render transfer on 26 January impossible; the Tribunal permissibly regarded the continuing presence of those asylum seekers as not detracting from the fact that "the core activities had been diverted to MRL from CD on 26 January" (see paragraph 26).[40]The Tribunal also considered the fact that no employees went from Barry House to Coombe Farm on 26 January and that the CD employees stayed at Barry House until the end of March, although there must have been very little work for them to do and effectively none once, over the few weeks following 26 January, the remaining asylum seekers with medical needs were transferred. They found the facts about the employees; and in their conclusions they cannot have forgotten those facts; they did not make the error of looking for transfer of employees rather than looking for a change from alleged transferee to alleged transferor in the performance of the essential activity.[41]Finally on this issue, the fact that originally the Claimants and CD adopted the position that the transfer had occurred on 31 March 2007, when CD's contract with MH expired without renewal, did not, in my judgment, prevent the Tribunal from finding that the transfer occurred on 26 January 2007 or render such a finding erroneous in law. Paragraph 18 of the Tribunal's judgment makes it clear that, at least by the stage of closing submissions, CD were arguing for a transfer on 26 January. In contrast Mr Cambridge, who is not a lawyer, submitted that the transfer took place on 31 March; but by then CD had not provided accommodation or services to MH at Barry House to any asylum seekers for well over a month; and MRL had been receiving asylum seekers from 26 January (see paragraph 14). The Tribunal were entitled to reach a factual conclusion that the service provision change pursuant to which MRL performed the essential activity for MH instead of CD occurred on 26 January 2007, whether or not CD had initially taken a different view.[42]I should add that Mr Bourne has not suggested that he was deprived of an opportunity before the Tribunal of dealing with CD's change of heart on this point.[43]I must, lastly, address Mr Bourne's point that the Tribunal relied on events which occurred when, later in the year, the Home Office did not renew MRL's contract and reverted to the use of Barry House when he had not been permitted to cross-examine about those events. It is important, as I see it, that the Tribunal only referred to subsequent events in the second sentence of paragraph 25 and did so only by way of support for its view that the place where the activity was provided was not integral to the definition of that activity. In my judgment that conclusion of the Tribunal did not need the support of subsequent events; it was plainly correct or at least a permissible finding on the facts which the Tribunal had found, irrespective of what happened after 31 March. In any event the Tribunal did not seek to go into detail of what happened subsequently; and it has not been suggested that the bare fact that subsequently the provision of the activity switched back to Barry House was open to challenge. In those circumstances I see no error of law in the Tribunal's approach. Conclusion[44]For the reasons I have set out this appeal fails and is dismissed.