Renfrewshire Council v The Educational Institute Of Scotland (Redundancy : Collective consultation and information) [2012] UKEAT 0018_12_0410

EAT
Renfrewshire Council v The Educational Institute Of Scotland (Redundancy : Collective consultation and information)
[2012] UKEAT 0018_12_0410 · 2012-10-04
Appeal No. UKEATS/0018/12/BI       EMPLOYMENT APPEAL TRIBUNAL 52 MELVILLE STREET, EDINBURGH, EH3 7HF     At the Tribunal On 10th August 2012 Judgment dated 4th October 2012         Before THE HONOURABLE MR JUSTICE LANGSTAFF (PRESIDENT) (SITTING ALONE)                 RENFREWSHIRE COUNCIL APPELLANT               THE EDUCATIONAL INSTITUTE OF SCOTLAND RESPONDENT       Transcript of Proceedings   JUDGMENT   Amended     ã Copyright 2012     APPEARANCES         For the Appellant   MR NAPIER QC (of Counsel) Instructed by: Renfrewshire Council, Dept. of Finance & Corporate Services, Renfrewshire House, Cotton Street, Paisley PA1 1TT   For the Respondent MS AMANDA JONES (Solicitor) Maclay Murray & Spens LLP, Quartermile One 15 Lauriston Place, Edinburgh EH3 9EP   SUMMARY COLLECTIVE CONSULTATION AND INFORMATION The claimant teachers succeeded at a preliminary hearing before an Employment Judge in contending that the establishment at which they worked (for the purposes of s.188 of the trade Union and Labour Relations (Consolidation) Act 1992 was the Education and Leisure Service of Renfrewshire Council.  The Council had contended it was the individual school at which each worked, on which basis there was no right to consultation under s.188.  The Judge had relied heavily on City of Edinburgh Council v Wilkinson as decided in the EAT.  That decision had since been reversed on appeal to the Inner House of the Court of Session.  Her approach to determining what was an establishment was in error in that, and other regards, including a perverse finding of material fact that a school was not a distinct entity. The appeal was allowed, but the issue remitted to the judge since some material findings of fact needed to be made before a definitive answer could be given on the claim. THE HONOURABLE MR JUSTICE LANGSTAFF, PRESIDENT   Introduction[1]The factual question to be determined by Employment Judge Wiseman in this case, in which teachers alleged a breach of the obligation in section 188 of the Trade Union and Labour Relations Act 1992 to consult in respect of collective redundancies, was what was the unit to which those workers made redundant were assigned to carry out their duties (the “establishment” to which section 188 refers, as defined by authority in the Court of Justice of the European Union).[2]She decided on the evidence that it was not the school identified as the place of work of the teachers concerned, nor was it all the secondary and primary schools in Renfrewshire, taken together, but rather it was the Education and Leisure Service of Renfrewshire, to which she did not ascribe any particular location.[3]For those who might think intuitively that, just as an Edinburgh pupil would identify the educational establishment to which he was assigned to receive his education as being (for instance) Trinity Academy, Boroughmuir or Royal High School, rather than Edinburgh Council or its Education Department, a teacher would say that he taught at such a school, rather than at the Education Department, so would a teacher in Renfrewshire identify the school at which he taught as the unit to which he was assigned to carry out his duties, it might seem surprising that Mr. Napier QC for the Appellant Council expressly eschewed arguing that Judge Wiseman’s decision was perverse in the result – though he did, by amendment during the course of the hearing, argue that one apparent judgment in fact, part of the reasoning towards the conclusion, did have that character.  That was where the Judge, at paragraph 200, said: “I did not consider a school was a distinct entity”.[4]Since she accepted that a school has “its own identity”, since on almost any view of the facts any school is capable of being a distinct unit for many, if not all, purposes, and since some statutory provisions appear to treat a school as a recognisably distinct entity[1] this expression of view seems at first blush to be unfathomable.  I shall consider later whether it is truly a perverse finding, or whether if read in context it should not be treated in that way.[5]The observation does, however, indicate something about the approach of the Judge.  It was to treat a school in the abstract.  I have real concerns about any decision dealing with what should be essentially a practical matter – that of consultation in specific circumstances -which is reached without identifying the precise units to which the council claimed the applicants were assigned (the individual schools).  Since this appears to be the way in which she was invited by the parties to approach the matter, however, this is no criticism of her: it is, rather, a feature which may make understanding the application of legal principle to the factual matrix more difficult that it might otherwise have been.[6]By way of preliminary observation, the search for a “unit” to which employees are assigned to perform their duties may throw up a number of answers each of which may for its own purposes be correct.  This is a problem inherent in many systems of classification.  The greater whole is always likely to include the lesser, and the lesser the least. Thus – to use an example debated during the appeal – a University lecturer may teach in a particular department, belonging to a particular faculty, which is itself part of a campus, which together with other campuses form the University.  He might legitimately be said to be assigned to the department, the faculty, the campus or the University, or indeed to each and all.  If in his case the legislation may be applied without error such that more than one might be the answer to the question “To which unit is he assigned for the statutory purposes?”, yet the legal answer which the court is required to give demands that one answer alone be given, it cannot be said that that court would be in error in choosing one rather than another: such a  choice requires to be treated as an issue of fact, which so long as approached without error, taking into account only the permissible and all the materially relevant considerations, must stand on appeal even if the appellate court might have chosen differently.  Yet in such a case a court is likely to strive to find some means other than that which is effectively the toss of a coin to assist determination of the question, for legal certainty is an important aspect of justice: predictability of outcome is important to employers and employees when arranging their respective affairs, and a lack of it likely to be costly.[7]Accordingly, although almost every fact placed before the Employment Judge in the present case was not in dispute, the closest focus must be on the particular emphasis of the statutory provisions and such indications as they give as to making the necessary choice.  I shall turn first, therefore, to those.   The Law[8]Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 provides, so far as material:
“188 Duty of employer to consult trade union representatives (1) Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be [affected by the proposed dismissals … (1A) The consultation shall begin in good time and in any event— (a) where the employer is proposing to dismiss 100 or more employees as mentioned in subsection (1), at least 90 days, and (b) otherwise, at least 30 days, before the first of the dismissals takes effect. …   … (3) In determining how many employees an employer is proposing to dismiss as redundant no account shall be taken of employees in respect of whose proposed dismissals consultation has already begun. (4) For the purposes of the consultation the employer shall disclose in writing to the appropriate representatives— (a) the reasons for his proposals, (b) the numbers and descriptions of employees whom it is proposed to dismiss as redundant, (c) the total number of employees of any such description employed by the employer at the establishment in question, (d) the proposed method of selecting the employees who may be dismissed, .. .   ……….   189 Complaint … and protective award   (1) Where an employer has failed to comply with a requirement of section 188 …. a complaint may be presented to an employment tribunal on that ground….    (2) If the tribunal finds the complaint well-founded it shall make a declaration to that effect and may also make a protective award.   (3) A protective award is an award in respect of one or more descriptions of employees—   (a) who have been dismissed as redundant, or whom it is proposed to dismiss as redundant, and   (b) in respect of whose dismissal or proposed dismissal the employer has failed to comply with a requirement of section 188, ordering the employer to pay remuneration for the protected period…….”
[9]There is no statutory definition of “establishment”. However, it is likely in many if not most circumstances to be less than the whole undertaking of the employer concerned.  If this were not so, there would be no need to engage the concept of “establishment” at all – it would be sufficient for the statute to omit the words “at one establishment” from s. 188 (1) if it were intended that the headcount should be performed across the whole of an employer’s workforce.  This interpretation is reinforced by the wording of subsection (4)(c), which plainly contemplates an employer is likely to have more than one establishment.[10]The second general observation is that Parliament did not provide for a right to consultation in the event of large scale redundancies generally: however strongly it may be thought desirable, there is no such right given by statute unless and until the impact of such redundancies upon individual establishments within the employer’s organisation meets the numerical threshold in s.188.[11]Third, “establishment” connotes a physical presence.  Although the word can be used in an organisational sense (as in “the establishment of the company….”, similar to “the staffing complement”) it does not conventionally have an organisational thrust.  That this is the general force of the word in s.188 is emphasised by use of the preposition “at”.  Employees are defined not as belonging to, or working in, an establishment, but as being “employed at” it (subsections (1) and (4)(c)).  Though the sense of the words seems to me obviously related to physical presence, I also have guidance on this point from the judgments in City of Edinburgh Council v Wilkinson & Ors [2011] CSIH 70 where Lord Eassie said (when considering the meaning of “establishment” in s.1(6) of the Equal Pay Act 1970 – the relevant phrase there being “men employed by her employer or any associated employer at the same establishment”, the word “establishment” being undefined for the purposes of that Act as it is for the 1992 statute):
“[19] …. It is, I think, clear from the terms of section 1(6) of the Act that the legislation treats the notion of an establishment as something distinct from the whole undertaking of the employer (or associated employer). Had it been the legislative intention that it was sufficient for the claimant and her comparator to have the same employer, that could readily have found expression by a requirement to the simple effect that the female worker and the male comparator or comparators be employed by the same employer (or associated employer); reference to other establishments in Great Britain would be unnecessary. Nor do I find in the legislative text anything which points to an intention that there should be a presumption that the whole undertaking should constitute a single establishment.   [20] When the Act was passed by Parliament the concepts of an establishment from which a person works, and of a single employer having a plurality of establishments, were concepts which were to be found in earlier legislation on selective employment tax. That legislation was considered by the House of Lords in Lord Advocate  v  Babcock & Wilcox (Operations) Ltd and approval was there given to the guidance given by Lord Parker CJ in The Secretary of State for Employment and Productivity  v  Vic Hallam Ltd (1970) 5 ICR 108-110. Lord Parker said:   "For my part I find it quite impossible to give any exclusive definition or test as to what constitutes an establishment. The tribunal said that they approached the matter as one of broad commonsense. For my part I think that is the correct approach in deciding whether as a matter of fact and degree any particular premises do constitute an establishment. But as it seems to me there are certain indications which help in the matter. The first is one to which I have already referred, exclusive occupation of premises; secondly, some degree of permanence - both those are present in this case - and thirdly, as it seems to me, some organisation on the premises, an organisation of the men who are working there. Finally, the question whether a particular premises is an establishment is bound up with the question of where the men who are working there are being employed in or from, because by section 1(2) it is provided that: "... this section applies to any employment in, or carried out from, an establishment ..." therefore an establishment must be a place in or from which people are employed."   In addition to giving (along with the rest of their Lordships) his approval to that passage, Lord Simon observed, at page 18:   "'Establishment' is a word of wide meaning. Among other, different, senses, it can signify, on the one hand, a body of persons (generally an organised body) or, on the other hand, premises - with a number of senses intermediate between these two. I think that any attempt at exhaustive judicial definition would be inappropriate where the draftsman himself has not attempted to define; but what this word conveys to me in its instant context is a body of persons carrying on activities by way of business - see the Selective Employment Payments Act, 1966, section 1(2)(a) - associated with a locality."   In my view the context in which the phrase "at an establishment" is used in section 1(6) of the Act - the preposition deployed is "at", not "in" - similarly conveys an association with a locality; "establishment" is not, to my mind, being deployed simply in the incorporeal sense of being a body or an undertaking.”
[12]Much of the case law to which the attention of the Court of Session was drawn related to the meaning of “establishment” for the purpose of collective redundancies rather than equal pay.  Although the word is the same, the context is different.  But it considered the case-law relating to collective redundancies nonetheless, as to which Lord Eassie observed that it appeared to him that a distinct geographical location might, depending on the circumstances, constitute an important definitional element in identifying the establishment.[13]Redundancy – as defined for the purposes of individual redundancies by section 139 of the Employment Rights Act 1996 – is closely associated with an employee’s place of work by subsections (1)(a)(ii) and (1)(b)(ii), though the definition is wide enough to comprehend occasions which are not specific to the place of work (as in (1)(a)(i) and (1)(b)(i)).  The right under section 188 is, however, in respect of redundancy differently defined: by section 195(1) of the 1992 Act it is “..for a reason not related to the individual concerned or for a number of reasons all of which are not so related”.  Neither advocate thought the court could gain much assistance, therefore, from s.139 of the 1996 Act, and I agree with them.[14]What is of assistance, however, is the European Union provision which s.188 purports to implement in domestic law.  Directive 75/129/EEC as amended by 92/56/EEC has essentially been consolidated in Council Directive 98/59/EC.  The second recital to the Directive records that:   “(2) Whereas it is important that greater protection should be afforded to workers in the event of collective redundancies while taking into account the need for balanced economic and social development within the Community…”   and the seventh looks to an improvement “in the living and working conditions of workers in the European Community…”.[15]Article 1 provides materially as follows:-   “1. For the purposes of this Directive:   (a) 'collective redundancies` means dismissals effected by an employer for one or more reasons not related to the individual workers concerned where, according to the choice of the Member States, the number of redundancies is:   (i) either, over a period of 30 days:   -        at least 10 in establishments normally employing more than 20 and less than 100 workers, - at least 10% of the number of workers in establishments normally employing at least 100 but less than 300 workers,   - at least 30 in establishments normally employing 300 workers or more,   (ii) or, over a period of 90 days, at least 20, whatever the number of workers normally employed in the establishments in question……………….”.[16]Some observations. First, the same lack of definition of “establishment” occurs here as it does in domestic legislation. Second, the provision at 1(a) is reflected by the wording of s.195 of the 1992 Act. Third, the other provisions provide for the member state to make a choice – either to adopt a “sliding scale” approach to those situations when consultation is called for in accordance with the other provisions of the Directive (by Article 2 in particular), or the alternative of a single threshold figure. If the former is adopted, then it may be critical to conferment of the rights to consultation that an “establishment” is defined so as to be large enough to employ at least 20 workers, but small enough to accommodate the sliding scale between 100 and 300 workers.[17]This underlies the decision of the European Court of Justice in Rockfon A/S v Specialarbejderforbundet i Danmark [1996] ICR 673.  Rockfon, a Danish undertaking, proposed to make 24 or 25 employees redundant from its workforce of 162. It was however part of the larger Rockwool group, whose complement of employees was in excess of 300. Denmark had adopted the first option provided for by the Directive. If the whole Rockwool workforce were regarded as the “establishment” then there would be no right to advance consultation in respect of those to be dismissed from Rockfon, since there would be less than the 30 dismissals required to trigger the right. Rockfon argued that it should be, since the power to hire and fire lay in the hands of Rockwool, and not Rockfon, which had no management able independently to effect large-scale dismissals.[18]The Court held:
“29 The Directive was adopted on the basis of Articles 100 and 117 of the EEC Treaty, the latter provision concerning the need for the Member States to promote improved working conditions and an improved standard of living for workers, so as to make possible their harmonization while the improvement is being maintained. It is apparent from the first recital in its preamble that the Directive is indeed intended to afford greater protection to workers in the event of collective redundancies.   30 Two observations may be made in that respect. First, an interpretation of the term "establishment" like that proposed by Rockfon would allow companies belonging to the same group to try to make it more difficult for the Directive to apply to them by conferring on a separate decision-making body the power to take decisions concerning redundancies. By this means, they would be able to escape the obligation to follow certain procedures for the protection of workers and large groups of workers could be denied the right to be informed and consulted which they have as a matter of course under the directive. Such an interpretation therefore appears to be incompatible with the aim of the Directive.   31 Secondly, the Court has held that an employment relationship is essentially characterized by the link existing between the employee and the part of the undertaking or business to which he is assigned to carry out his duties (judgment in Case 186/83 Botzen and Others v. Rotterdamsche Droogdok Maatschappij [1985] ECR 519, paragraph 15).   32 The term "establishment" appearing in Article 1(1)(a) of the Directive must therefore be interpreted as designating, depending on the circumstances, the unit to which the workers made redundant are assigned to carry out their duties. It is not essential, in order for there to be an "establishment", for the unit in question to be endowed with a management which can independently effect collective redundancies.   33 That interpretation is supported by the fact that the Commission' s initial proposal for a directive used the term "undertaking" and that that term was defined in the last subparagraph of Article 1(1) of the proposal as "local employment unit". It appears, however, that the Council decided to replace the term "undertaking" by the term "establishment", which meant that the definition originally contained in the proposal and considered to be superfluous was deleted.   34 The answer to the second part of the preliminary question must therefore be that the term "establishment" appearing in Article 1(1)(a) of the Directive must be understood as meaning, depending on the circumstances, the unit to which the workers made redundant are assigned to carry out their duties. It is not essential, in order for there to be an "establishment", for the unit in question to be endowed with a management which can independently effect collective redundancies.”
[19]Mr. Napier QC relied in his argument upon part of the Opinion of Advocate General Cosmas (whose view was adopted by the Court), who emphasised that the Community legislature had used the term “establishment” to identify something distinct from that which the term “undertaking” designates (para.28); that the word “enterprise” (used in some language versions) had a wider import than did “establishment” (paras. 26-31), such that the former word encompassed the greater and the latter the lesser; and that (at paragraph 32, a point re-emphasised at paragraph 44):
“In the case now before us, if the Community legislature had wished that all an undertaking’s workers, wherever they were employed, should be taken into account in determining the total number of workers on the basis of which dismissals were to be determined to be lawful or unlawful;, it should have used a more appropriate term.”
[20]At paragraph 35 the Advocate-General noted that “establishment”  “..strictly speaking means a local work unit”; at paragraph 38 that the interpretation should be that “which would accord with the guiding principle of protecting workers in the event of collective redundancies”; and at paragraph 45, considering the view expressed in Botzen v. Rotterdamsche Droogdok Maatschaapij B.V. (C-186/83) [1985] ECR 519, 528 para.15 that an employment relationship is essentially characterised by the link existing between the employee and the part of the undertaking or business to which he is assigned to carry out his duties, that:
“I consider that the term ‘establishment’ used in the Directive characterises that place, that part of the undertaking, and that it is on the basis of the number of workers employed in that part that it is necessary to determine whether the procedures laid down by the Directive in the event of collective redundancies have been complied with”
[21]The emphasis here is again put on the place of work to which a worker is in practice assigned.[22]Rockfon fell for consideration in domestic case-law by the Employment Appeal Tribunal (Lindsay J. presiding) in MSF v. Refuge Assurance Plc & Anor [2002] ICR 1365.  The meaning of “establishment” as used in s.188 was of particular importance in that case. Refuge Assurance plc and United Friendly Insurance plc. proposed to merge, looking for economies of scale in their workforces. Each respectively had field staffs, which did the work of visiting homes and knocking on doors to secure and service insurance policies. Each operated out of a network of branch offices, with each member of the field staff assigned to a particular branch office. Since field staff workers worked in relatively small units this had the consequence that if each branch office were separately regarded as an establishment, this would effectively disapply section 188 simply by reason of the smallness of the branches concerned and the thin spread of redundancies over a large number of them.[23]The Employment Tribunal had found that each branch office was a separate costs centre, and that each branch office manager was the direct line manager of the field staff assigned to that particular branch office. The Tribunal held that each member of the field staff was assigned to a particular branch office as his or her place of work. Despite that the Tribunal concluded that the “establishment” was not the branch office; in all the circumstances of the case it was “the entire field staff of each respective employer."  This view was held erroneous: Rockfon had to be applied:
“…firstly because in section 188 the word should, if possible, be given the meaning ascribed to the same word in the Directive by Rockfon …. Secondly, we are unconvinced of the value of cases looking at the word in other statutory contexts. Thirdly, in any event we are unconvinced that these domestic authorities lead to a meaning that differs from the Rockfon meaning - see in particular Lord Advocate - v - Babcock Wilcox [1972] HoL 1 W.L.R. 488 and Barratt Developments (Bradford) Ltd. - v - UCATT [1978] ICR 319 EAT.”
[24]Accordingly, it has become accepted wisdom (at least at Appeal Tribunal level) that the same definition of “establishment” is to be applied for the purposes of s.188 as for Art.1(1)(a)(i) of the Directive: Mr Napier QC points out that this is instanced in Potter v. Sound Control Modern Music Stores Ltd. [2009] UKEAT 0543/08 (HHJ Peter Clark, sitting alone) where Rockfon and MSF are referred to as “the standard authorities”.[25]I must confess to considerable misgivings whether the decision in MSF is, despite this general acceptance, necessarily a proper application of that in Rockfon. Although the European Court did define “establishment” as I have noted, it did so expressly to advance the purpose of the Directive by regard to the consequences if (on the facts of that case) a larger unit were to be adopted as the establishment than that contended for by the employer.  The right to consultation where it was contemplated that there might be a number of dismissals for reasons unconnected with the personal characteristics of the workers in question would be defeated, rather than advanced, by adopting the employer’s approach. The decision, being one of the European Court, may be seen as one in which the reasoning was part and parcel of the decision, and it might almost as well be interpreted as a decision that that “unit” constitutes an establishment for the purposes of Directive 98/59 which most widely confers consultation rights: for the “sliding scale” in Art. 1(1)(a)(i) this would usually be smaller rather than larger units, subject only to the applicable numerical thresholds, as it is to be interpreted as a decision that lays down a definitional starting point from which the rights in issue flow.  For the applicability of rights deriving from Art.1(1)(a)(ii) the larger the “establishment” is conceived to be the more likely it is that workers within it will be protected.  The danger to what would otherwise be rights to consultation might be averted if the emphasis in applying Rockfon were to be placed on the purposive logic which led to the answers to the questions given by the Court in that case, rather than literally upon the wording used to express the scope of “establishment”.[26]However, I do not consider that it is open to me to take an approach other than that taken in MSF. First, neither party has invited me to do so (though Ms Jones has referred me to criticism in Harvey, Division E, “Meaning of Establishment” at paragraphs 2531 to 2549, to the effect that the decision in MSF runs counter to the purposive logic which the European Court adopted in Rockfon.).  Second, it is a decision which though not binding upon me is as a decision of the Appeal Tribunal nonetheless one which is normally to be followed unless a later court is confident it is erroneous, and I am not.  Third, as Lindsay J. observed, the decision is consistent with the approach taken in earlier domestic authority.  Fourth, to depart from it is to contemplate that the European Court might adopt a definition of establishment for the purposes of Art.1(1)(a)(ii) which differs from that adopted for 1(1)(a)(i) – yet the reasoning of both the Advocate-General and the Court approached the definition of “establishment” by reference to the use of that word in other contexts, such as that of the Acquired Rights Directive, with a view to ensuring that one consistent definition was applied across the whole community. Fifth, there is nothing in the Directive itself, even in the recitals, which is capable of suggesting that the meaning of “establishment” might fluctuate depending on the particular circumstances of the case concerned.  Sixth, there seems to me to be force in the view of the Appeal Tribunal expressed in paragraph 52 in MSF that the Act might not be compatible with the Directive, since the word in s.188 is “establishment”, in the singular, whereas in the Directive it is in the plural –“the establishments in question”[2].  If so, then the meaning of “establishment” as defined in Rockfon would not conflict with the purpose of the Directive in any case to which Art. 1(1)(a)(ii) applied, since in such a case the “establishments” would be aggregated for the purpose of establishing a numerical threshold.  On this analysis, any shortcoming in ensuring the widest coverage of consultation rights under the Directive is the consequence of what must be assumed to be a deliberate legislative choice by Parliament; but the definition in Rockfon would still fall to be applied.  Finally, where a choice has to be made on the facts between holding that either a greater or lesser unit is the relevant “establishment”, in circumstances where it would be permissible logically to conclude that either or both were the unit to which the relevant number of workers were assigned to carry out their duties, it is a relevant consideration in choosing between them that one choice will afford early consultation rights to those workers, whilst the other will not.  Mr.Napier QC in argument conceded as much, though he had at first been disinclined to do so: for him the point beyond which a Tribunal could not go was affording this consideration a conclusive force.  In this too he must be right, for otherwise there would be little need for focus upon the meaning of “establishment” at all, yet that is what the legislation viewed in the light of the case-law demands.[27]I should add, for completeness, that the claimants in the case before me did not seek to argue that the Directive had direct effect, on the basis that schools or education department were public authorities.[28]Further, in Athinaïki Chartopiia AE v Panagiotidis and ors.  (C-270/05) [2007] IRLR 284 the ECJ had to consider a case in which the member state (Greece) had adopted the option provided for by Art.1 (1)(a)(ii), as has the UK. It repeated and applied the definition given in Rockfon, though expanding it a little (at paragraph 27):
“…for the purposes of the application of Directive 98/59, an 'establishment', in the context of an undertaking, may consist of a distinct entity, having a certain degree of permanence and stability, which is assigned to perform one or more given tasks and which has a workforce, technical means and a certain organisational structure allowing for the accomplishment of those tasks.”
This adds confidence to my view that the focus in any case in which the identity of an “establishment” in Section 188 is critical must be on identifying the unit to which the workers concerned are assigned to perform their tasks.[29]It is convenient at this stage to deal with one submission of law advanced by Mr. Napier QC.  He drew attention to Art. 1(2)(b) of Directive 98/59, which provides that the Directive   “…shall not apply to … workers employed by public administrative bodies or by establishments governed by public law (or in Member States where this concept is unknown, by equivalent bodies).”[30]He argued that the Directive accordingly would not apply to a school; that in that case, the purposive approach enjoined by the recitals to the directive would not apply either; and that therefore such an approach could be ignored in determining what was an establishment in any given case involving a school.[31]This argument must be rejected.  First, this case does not concern direct application of the Directive.  What is in issue is the proper meaning to be given to the word “establishment” in s.188 of the 1992 Act.  That is a matter of domestic law.  The meaning cannot differ depending on whether a case concerns a school, or that which is more obviously a “public administrative body”.  The same meaning must apply whatever the identity and nature of the employer. The meaning is necessarily informed by the fact that the Act implements the Directive in national law.  The meaning to be applied to any employer must take account of that.  To do so means to interpret the Act in the light of the Directive as far as that can reasonably be done, even to an extent which would be regarded as impermissible applying conventional canons of construction derived from English law.  As Lord Oliver said in his speech in Litster v Forth Dry Dock and Engineering Co Ltd [1988] UKHL 10:
“The approach to the construction of primary and subordinate legislation enacted to give effect to the United Kingdom's obligations under the E.E.C. Treaty have been the subject matter of recent authority in this House (see Pickstone v. Freemans Plc. [1989] AC 66) and is not in doubt. If the legislation can reasonably be construed so as to conform with those obligations - obligations which are to be ascertained not only from the wording of the relevant Directive but from the interpretation placed upon it by the European Court of Justice at Luxembourg - such a purposive construction will be applied even though, perhaps, it may involve some departure from the strict and literal application of the words which the legislature has elected to use.”
As Lord Templeman put it in his speech:
“Thus the courts of the United Kingdom are under a duty to follow the practice of the European Court of Justice by giving a purposive construction to Directives and to Regulations issued for the purpose of complying with Directives.”
[32]It was a consideration of this requisite purposive approach which led me to have concerns about the correctness of the MSF decision.  However, that decision (for the reasons I have set out above) must be taken faithfully to have applied the European decisions which explained the meaning to be given to “establishment” in those cases within the scope of the Directive.  The argument by Mr. Napier QC is thus as unnecessary for the success of his case as it is misconceived in law.     The Tribunal Decision[33]The Tribunal made its findings of fact both at the main hearing and at a review hearing. Save for one point, they were not contentious.  They related in the main to the organisation which the Council adopted to discharge its duty to secure adequate and efficient provision of school education within its local authority area, the fact that teachers’ conditions of service were negotiated principally by collective agreements reached at county level, and that the power to hire and fire teachers remained at county, not at school, level. Schools were funded under a Delegated Management of Resources scheme, which (perhaps surprisingly, given its name) the Tribunal found offered only limited scope to a Head Teacher of a given school to use the allocated budget for purposes other than those centrally directed by the Council. The head did however have greater autonomy in respect of the curriculum, though again certain subjects had to be offered by all schools. He was the line manager of the teachers at the school, and responsible for preparing the timetable and allocating “teacher resources” to it, though the balance as between teaching hours spent in classroom contact, on correction and preparation out of class, and in respect of meetings, report writing and strategic planning was again largely though not entirely directed from a higher level.[34]Amongst other findings were that a specimen contract of employment showed that the teacher’s place of employment was a designated High School, but included a mobility clause – which had never in practice been enforced; that a head teacher could authorise a teacher to take up to 2 days leave; had disciplinary powers which extended to giving oral or written warnings, but not to dismiss or give a final written warning, even as nominee of the Director of Education (this latter point was the only one in contention, and neither advocate before me was able to explain what relevance it actually had to the legal issues determinative of the case, however much the parties themselves may have wished to establish their respective positions); that primary schools could be arranged in clusters where they fed into a particular secondary school, and would often work together on specific projects; and that if schools were “rationalised” because of falling rolls, such that staff were declared surplus, those teachers with least service would be declared surplus, or moved to a different school, first.  This latter point (at paragraph 27) was explored in debate before me, because of its potential importance to a decision as to the “unit” to which a teacher was “assigned” to carry out his duties.  It was implicit in the finding that the unit within which the length of service was to be calculated was the school, and not the Council’s Education and Leisure Service taken as a whole – for otherwise, what might be contemplated would be a teacher with lesser service elsewhere being “bumped” to make way for a teacher from the school with surplus staff.  However, the parties were agreed before me that the Council’s policy was that there should be no compulsory redundancy. It appeared that the question what had happened (or would happen) if a school closed, to such as a head teacher, had not been explored in evidence before the Tribunal.[35]At a review held on 25th October 2011, the Judge found additionally that Head teachers had a limited ability to vire funds allocated to their schools to fund additional teaching resources and/or posts; had a (very limited) scope to composite classes and use the saved funds elsewhere; and that there was no dispute that a head could discipline and dismiss class room assistants and clerical and administrative staff. They did not affect the conclusions reached at the preliminary hearing, to which I now turn.[36]Those conclusions are expressed at paragraphs 209 and 210 of the judgment:    “209.  I asked myself ‘what is the unit to which the teachers were assigned to carry out their duties’? I rejected, for the reasons set out above, Mr. Napier’s submission that the school was the unit to which teachers were assigned to carry out their duties.  I also rejected, for the same reasons, Ms Jones’ alternative submission that all secondary and/or all primary schools were a unit.[210]I decided the facts of this case demonstrated the Education and Leisure Service Department of the respondent was the ‘unit’ to which the respondent, who is the employer, assigned teachers to carry out their duties.”[37]That is a judgment in fact, and as such must be respected on appeal unless it is either perverse (not advanced here, save as to the point mentioned earlier) or the analysis leading to it is flawed: a point properly emphasised by Ms. Jones, by reference to Mills &Allen v. Bulwich (EAT 154/99: 8th June 2000) at para. 4, per HHJ Peter Clark for the Tribunal.[38]Here the question as posed was the right one.[39]However, it is as to the detailed reasoning leading to the answer to that question that Mr. Napier QC complains.[40]First, he submitted that the Employment Judge had taken the view (at para.167) that the “purposive approach …has to be applied by this Tribunal”.  This was too prescriptive. A decision in fact as to whether a school was a unit, and teachers assigned to it to carry out their duties, was not something which could be determined purposively.  If this is what she did, then there was in my view an error of law.  As Ms. Jones points out, it is not clear what finding hung upon the observation at 167, for the conclusion is not reached upon the basis that the Judge was exercising a choice between two units, each of which might have been an establishment, and selecting one rather than the other on an avowedly purposive basis.  I would be disinclined to hold that an observation, of no apparent effect, equivocally expressed, in the course of a lengthy Tribunal judgment amounted to a frank error of law.[41]Second, though, Mr.Napier QC was right to observe that she directed herself in accordance with the then recent decision of the Appeal Tribunal in Wilkinson v. City of Edinburgh Council [2010] IRLR 756.  That was appropriate, at the time, since it was relevant appellate authority: but the law stated in it was erroneous, as the later decision of the Inner House of the Court of Session reversing the decision shows.[42]In particular she drew from that case that although in practice the operation of mobility clauses was limited that did not detract from the contractual position that they could be required to move around the city as directed by the Council, and adopted the same for the present case. In my view, she was wrong to do so since “assignment” does not refer to the contractual, but rather to the factual, position.  For the purposes of either TUPE (see Botzen) or Directive 98/59 and s.188, such regard to a contractual mobility clause would have the result that workers told to work at a given location without a mobility clause would be assigned to it; those subject to a mobility clause would not be; and where there was a mixture of the two classes of employee there presumably would have to be a headcount to see whether the threshold had been met as to those employed “in the establishment” (using the phrase from 98/59/EC).  The domestic statute makes it even clearer: the proposal which triggers the right to consultation is the dismissal as redundant of “20 or more employees at one establishment”.  The link with the place of work is dependent upon where the dismissal is “at”, not where the contract might otherwise provide for the work to be performed.  In short, if a worker is actually working at or in or from a given unit for more than a purely temporary or transitory period which might indicate he was not in fact assigned to that unit, the legislation regards him as assigned to it.[43]Further, the Employment Judge drew from it a reason to reject Mr.Napier’s submissions.  At paragraph 203, as one of six, or possibly seven, reasons for rejecting them she quoted Lady Smith’s views from Wilkinson as being that she was “not persuaded that it is as simple as asking: where did each claimant work….”, yet this had been at the core of those submissions.  This view of the EAT was however rejected on appeal at [2011] CSIH 70, [2012] IRLR 202.  The EAT had not been entitled to hold (as it did, in substitution for the decision of the Tribunal) that the undertaking of the council constituted a single establishment (per Lord Eassie at para. 25, with whom Lady Paton and Lord Hardie agreed on this point): and “..counsel for the appellant was well founded in maintaining that…the term “establishment” is largely directed to the place of work” (para.22).  It may be added that the Inner House saw a mobility clause as not only not inconsistent with the existence of a plurality of establishments, but indeed often a reflection of such separate establishments.[44]Possibly yet further reflective of her application of the Wilkinson decision in the EAT was the emphasis given by the Employment Judge not to the place where employees did their work, but rather the place from which many aspects of their employment were controlled.  As Lord Eassie pointed out in the Inner House any employer having distinct establishments will inevitably have a degree of central control.  This is plainly correct: where an establishment is less than the whole undertaking of which it is part, there must still be sufficient links between it and other establishments forming parts of the undertaking for it to be recognised as a part of a larger whole.  Most organisations are likely to have high level control, with responsibilities for subsidiary matters cascaded down to lower levels such as work units forming local parts of the larger undertaking.  To deny a local unit status as such because it does not have such high level powers fails to recognise this, and is likely to make it difficult ever to recognise a unit less in size than the whole undertaking: a point effectively demonstrated by the conflicting decisions of the Tribunal in Wilkinson, recognising such units, the EAT denying them – on the basis there was a presumption in favour of the Council as a whole being the establishment (since it, and not the units contended for, had important central powers), unless it could cogently be shown not to be – and the Inner House restoring the Tribunal decision since there was no such presumption.[45]From paragraphs 179-197, in accordance with this approach, the Judge analysed the facts, with a view to showing that the level of control centrally exercised by the Director of Education was such that the Education and Leisure Service Department was the unit to which the claimant teachers were assigned, rather than the schools at which they taught. It is perhaps best summarised in her paragraph 183:
“I acknowledged that in the MSF case the field staff were employed by the Company and allocated to a branch to work, but there was no evidence beyond that regarding movement of staff. I considered the fact that the respondent/education department retains control over recruitment allocation, movement and dismissal of teachers to be a critical factor.”
Contrary to her view, actual assignment, rather than power to control it, is the relevant criterion (see paragraph 42 above); and it is to be expected, rather than being of signal note, that an undertaking will centrally control much of recruitment and possibly dismissal.  The importance the Judge placed upon these considerations was thus overstated, no doubt in consequence of her reliance upon Wilkinson as determined by the EAT.[46]Thus before the judgment ever turned to the six, or possibly seven, reasons for rejecting the Council’s submissions, her approach to fact finding was in error.[47]The first of those reasons (para.199) was that all aspects of the role carried out by a head teacher were restricted, limited or controlled by either the Education department or were the product of collective negotiations.  I have dealt with that at paragraph 45.[48]The second (para.200) was that the Judge:
“..did not consider that a school was a distinct entity. I accepted each school could be expected to have its own identity and the head teacher would have responsibility for day to day operations, but the existence of schools, their overall operation, funding and staffing fell within the control of the Education Department.”
[49]The finding that the school was not a distinct entity seems out of place, since it is a conclusion which effectively disposed of the case for the Council, such that one might have expected it at the conclusion of the argument rather than as step toward reaching the very conclusion it expresses: Ms Jones did not have any answer to the appearance of levitation applied by pulling on bootstraps. Moreover, it is not separately reasoned.  It also sits uneasily with the concept which is expressed that a school has a distinct identity, under local management (at least to some extent).  The latter part of the paragraph does no more than repeat the self-same point as the Judge had already made in para. 199: yet since a second reason is being advanced, the paragraph as a whole must be expected to add something to the first – it does not appear to do so unless the Judge meant here to deny that a school in Renfrewshire was capable of being a unit separate from the Education and Leisure Service Department.  Yet that view is immediately contradicted.  The need to treat a Tribunal judgment as a whole, without undue focus on particular words and phrases taken in isolation, does not in the end provide a satisfactory excuse for these words. In the course of the hearing, Mr. Napier QC applied to amend the grounds of appeal by seeking to challenge this sentence as a perverse finding.  Ms. Jones objected, but accepted that no new fact required to be proved to enable the argument to be sustained, nor did she suggest she could not meet the point if given time.  She did not seek an adjournment.  I granted permission to amend: there was no prejudice which could not be remedied by extending liberty to the Respondent to the appeal to file further written submissions if, on reflection, there was any further point that might be made in defence of the judge’s reasoning. As it happens, no further written submissions have been received.[50]The ground of appeal succeeds.  The judge appears to have taken into account as part of her reasoning an individual conclusion in fact which is not only unexplained, misplaced, and apparently contradicted by what immediately follows but also perverse: any decision that a school is not a distinct entity flies in the face of reason.  This does not, I emphasise, necessarily answer the question whether a school is the unit to which the claimants were assigned to perform their duties – but that it is capable of being a unit, as a distinct entity, is obvious.  I note, in passing, that this view appeared so plain to Lord Eassie, and to Lady Paton and Lord Hardie who agreed with him in Wilkinson that he said (at para. 22):
“..it seems to me that a school within the area of an education authority may readily be seen as an establishment, being a recognisable location at which a discrete body of employees of the education authority works; and any one of those employees, if asked where he or she worked, would probably answer by giving the name of their particular school – a fortiori if asked at which educational establishment he or she worked.  It is no doubt that the education authority holds certain central management powers in respect of all its schools but….I do not consider that those powers prevent a given school being an establishment.”
[51]The third reason fares no better:
“..the Athinaiki case referred to the distinct entity ‘which has a workforce’.  The (teaching) workforce of a school is that of the [Council]: it is for the [Council] to recruit, place, move, retire and dismiss teachers as they deem appropriate, not the school/head teacher”
[52]This again demonstrates the error of failing to realise that an establishment as defined will most usually be a subsidiary part of the employer. The employees at any establishment will be employees of the employer, however many establishments it may have.  In that sense, they are bound to be its workforce, rather than a separate workforce of the establishment.  The employer is inevitably likely to have a large degree of control over the recruitment to, and number of its employees at any establishment.  The expression in Athinaiki of “having” a workforce does not mean, as the Employment Judge apparently interpreted it to mean, autonomously recruiting or dismissing employees from its staffing complement:  it relates to assignment. Has a workforce been assigned to it?  The concept of assigning an employee to a unit to perform his duty necessarily involves his being directed (i.e. in the Judge’s words “placed” or “moved”) to work there having first been recruited by the employer.[53]I have dealt with the fourth reason above – at paragraph 42 and following.[54]The fifth reason as given is:
“Fifthly, I noted from the Rockfon case that it is not essential for the unit to be endowed with a management which can independently effect collective redundancies and noted in this regard that a head teacher could not independently effect collective – or indeed, individual – redundancies at their school because (a) such decisions do not fall within their remit and (b) a head teacher has no power /authority to dismiss, as redundant, any teacher.”
[55]To say that this feature is not essential means that its absence is no reason for holding the alleged establishment not to be one.  Accordingly, though this is expressed as a reason for holding against Mr. Napier QC’s submissions, it is truth no reason at all to do so.  It is incapable of being what it purports to be: a reason to dismiss those submissions.[56]The sixth reason records that the Council allocated/assigned teachers to the Education and Leisure Service Department.  This is a permissible finding or reasoning: but it cannot in the present case cure the underlying erroneous approach, presumably influenced by Wilkinson at EAT level, which I have discussed above, of which it is most likely to be a product.[57]The possible seventh reason (it is un-numbered, hence “possibly”) is that the word “allocated” has the same meaning as “assigned”: that teachers were allocated to the Education and Leisure Service Department, spent all their time working within it, and the cost of their salary would be allocated to that department.  If this is a reason, it pays insufficient regard to the importance of location in the definition of establishment; to the fact that it is likely that a number of establishments will comprise one employer; and to the fact that the Directive, according to Rockfon, and in particular the views of the Advocate-General, used a definition equivalent to “local employment unit”.[58]It follows that none of the six or seven reasons advanced was sufficient to reject the Council’s case.[59]In the course of submissions I was taken to a sample letter of offer of employment of a teacher which was before the Tribunal.  It had the logo and name of Renfrewshire Council at the top, and was addressed to an individual teacher. The material parts read:   “I am pleased to inform you that you have been appointed to the Education and Leisure Service. In terms of the Employment Rights Act 1996, the following statement particulars is supplied as confirmation of your appointment with Renfrewshire Council….. ….[5]Place of employment/centre:  Johnstone High School, Beith Road, Johnstone[6]MOBILITY/TRANSFER   You are liable to transfer to such other place of employment/designated centre in the authority’s service as may be required as is deemed to be reasonable…”[60]It was common ground that the name of the school varied, depending on where the teacher was placed.  This letter therefore contained three possible assignments – to the Education and Leisure Service (“you have been appointed to….”); the Council itself (“your appointment with Renfrewshire Council”, and “..the authority’s service”); and the school (“place of employment/centre”; “liable to transfer to such other place of employment/designated centre”).  Contractually, however, the mobility clause did not provide an unfettered right in the Council to place a teacher anywhere within the council’s service – only such as “deemed..” (no statement by whom: presumably the court in the last resort) “..to be reasonable”.  This might be thought a strong indication that the local unit of employment to which the teacher was in fact assigned was the school, which undoubtedly (see paragraphs 49 and 50 above) was a unit, and which from the other findings of fact would appear to have an organised structure in respect of employees albeit with many features of its operation constrained or regulated by the higher authority of the Council operating through its Education and Leisure Service.  If an employee were assigned to the larger unit of Education and Leisure Service, it is difficult to understand that there should be any contractual constraint on moving the employee within it, just as there is in general no constraint in requiring an employee in the employer’s building, say, to move his office from one floor to another.[61]There was no analysis in the Judgment of whether, by directing the teacher to a particular place of employment (and assuming it to be capable of being a unit for Rockfon purposes) the employer had assigned him to its local organisation there.  The focus rather was on the mobility clause (at paras.176, 177), but here again the position was overstated, again by reference to Wilkinson before the EAT.  In that case, the clause permitted the Edinburgh Council an unfettered power to move teachers around the city as the council chose.  Here, as the “reasonableness” restriction suggests, there was no such unconstrained power: yet the distinction was not noted by the Employment Judge.   Respondent’s Submissions[62]I have dealt with the Appellant’s submissions in the course of the commentary above. The cross-appeal was not pursued.  The findings in fact were insufficient – necessary evidence had not been put before the Tribunal.[63]As to the Respondent’s submissions, they largely rested on the reasons given by the Employment Judge being adequate.  Ms. Jones emphasised the very considerable latitude given to Tribunals when reaching an evaluative finding in fact.  The European authorities relied on by the Appellant were all concerned with whether a particular unit or aspect of a business could amount to an establishment for the purposes of the Directive, not whether it did – and, more particularly, whether it did not.  Thus it was well recognised that a decision as to the unit to which employees were assigned (for the purposes of s.188 of the 1992 Act) was one in fact which short of perversity or substantial errors of approach should not be overturned. There was no suggestion of perversity here – save in one, lately argued, respect; the Judge had asked the right question as the starting point; it would be asking too much to expect a long Tribunal judgment such as hers to be entirely free of error or infelicity. There was no material defect in her reasoning. Moreover, “locality” should not be over-emphasised. Renfrewshire was a local area – particularly seen by comparison, for instance, to the nation-wide operations which were considered by the EAT in MSF.  In Mills v. Allen there was held to be no real organisational link between 24 direct sales staff, based at different offices across the UK, and those offices: but there was between each of them, such that the entirety of the direct sales staff amounted to an establishment. What is local is thus factually dependent. The judgment should stand.   Conclusions[64]Ms Jones is right to emphasise that a decision as to “establishment” is heavily factually dependent.  However, the approach in law to answering a question, correctly posed in itself, upon the facts of a case must be correct if the decision is to stand. Here, for the several reasons set out above, the approach was flawed.  In one respect, a finding in fact upon which other findings themselves depended was perverse. The decision cannot stand.[65]The more difficult question is whether to substitute a decision on my own, or to remit. Were it not for three factors, I should have been inclined to the former. They are first that the case concerned a number of individuals, yet appears to have been approached at a level of generality that did not address the particular circumstances of those employees. If (as some of the papers indicate) a number may have been peripatetic music or drama staff, or if some were placed by Education and Leisure Service with a cluster of primary schools rather than an individual school, it might be arguable on one view of the facts that they were in reality attached to the Education and Leisure Service of the Council, or to the cluster, rather than an individual school.  Then a decision as to consultation rights might depend upon the relevant number counting.  Second, there was little found in fact as to the nature of the Education and Leisure Service – whether this could sensibly meet the definition of unit, or whether it represents an organisational abstraction; and indeed, whether there is a proper case that the unit is the Council.[66]The third is that the fact finding concentrated upon the respective powers of the Council (through its Education and Leisure Service, presumably) on the one hand and a school on the other - on overall organisational matters - as determinative. I do not think this is a helpful approach.  The central question ought to be capable of relatively simple resolution, rather than 6 days of detailed evidence, and ought to focus on the individual employees rather than council powers: the question is employee, not employer focussed. It is as to which unit the worker is assigned to perform his duties.  That involves two central questions – is the postulated unit capable of being an establishment; and if so, is the employee assigned to it?  A third question may in some cases arise where there is more than one unit capable of fitting the definition in Rockfon and Athinaiki, as in the example of the faculty, campus and University.  Here the underlying policy of the law may be of some assistance, as set out in paragraph 26 above.  It may well not arise in this case, though that is most appropriately to be determined by the fact-finding tribunal.[67]Remission, then, it is.  But to whom?  Mr.Napier QC argues (by reference to Sinclair Roche & Temperley & Ors v. Heard & Anor [2004] IRLR 763) that the decision was so totally flawed it should be remitted to another judge.  Ms Jones resists.  In my view, the problems with the judgment were largely the result of an over-concentration on whether the employer could appoint, dismiss and control staff, rather than on the questions set out in the last foregoing paragraph, in itself probably because of the understandably heavy emphasis placed upon the EAT decision of Wilkinson which at the time of the hearing stood as the latest applicable law.  The judge plainly took much time and trouble over her judgment: there is nothing indicative of any lack of professionalism, and much to demonstrate its presence. The one finding of perversity is limited to one albeit central fact, and does not represent the tenor of the judgment as a whole. A court can thus have confidence that this judge will faithfully follow such guidance as available from the Inner House in Wilkinson, and in this judgment. Proportionality looms less significant than it might, given that the over-concentration mentioned above will not be repeated, and the focus placed where it properly belongs, but still tends in favour of the hearing being before the same judge as likely to be shorter, and more cost-efficient.  She will have heard much of the evidence already, though the parties will need to call more (or argue from existing productions) if they are to establish the individual matters to which paragraphs 64 and 65 above refer.  But I suspect that in the case of most individuals the choice will be simple and stark: is it the school or the Education and Leisure Service which is the unit to which the teachers in question were in fact assigned to perform their duties?  I shall therefore formally remit the case for reconsideration on such further and fresh evidence as the parties might wish to call to the same employment judge, though add that, since speed of decision is important, if it should be administratively convenient for another judge to hear the matter earlier there could be no objection to that course.       [1] The Scottish Schools (Parental Involvement ) Act 2006 was one example: the parties were invited in advance to consider whether the terms of this Act added anything to the point under consideration, and both appeared to accept that at least for some purposes legislation treated a school as a separate unit, though Ms Jones noted that the statute provided also that parental councils might be established for clusters of primary schools as opposed to each individual school constituting that cluster. [2] Neither advocate sought to argue the question whether the singular might include the plural for present purposes, and it seems plain that the reasoning in MSF assumed this to be excluded.

Cited in 4 later judgments