Bangura v Southern Cross Healthcare Group Plc & Anor (Transfer of Undertakings : Transfer) [2013] UKEAT 0432_12_1203

EAT
Bangura v Southern Cross Healthcare Group Plc & Anor (Transfer of Undertakings : Transfer)
[2013] UKEAT 0432_12_1203 · 2013-03-12
[1]The Appellant is not represented at the hearing before this Tribunal for reasons which are set out in a letter of today’s date, 12 March 2013, faxed this morning. This is due first to the Appellant’s financial constraints which have meant that it has not been possible to instruct counsel on her behalf to represent her at the hearing of her appeal. Secondly, the solicitor with the conduct of the matter is unwell and has to attend his doctor today. Accordingly, there is no representation at the hearing before me on behalf of the Appellant. Nevertheless, the same letter makes it clear that the Appellant wishes the appeal to proceed today on the basis of the skeleton argument which has been filed on her behalf.[2]The Respondent has been represented by Mr O’Reilly who has also wished the hearing to proceed and has very fairly sought to put such points as could be advanced on behalf of the Appellant if she had been represented today. Introduction[3]The Appellant was employed by the First Respondent to the Employment Tribunal proceedings from 14 August 2007 until 12 August 2011. On that date she was dismissed summarily on grounds of gross misconduct. She lodged an appeal. In the meantime, a transfer of the care home where she had worked for the First Respondent took place on 30 September 2011. The Second Respondent took over responsibility for that care home. A number of employees who were still in place at that date were transferred to the employment of the Second Respondent and no issue has been taken about that.[4]On 7 December 2011 the Appellant issued her claim in the Employment Tribunal alleging unfair dismissal and also racial discrimination. In fact, this appears to have been slightly out of time but the claim was accepted as being within the jurisdiction of the Tribunal and that point is not material to the present appeal.[5]On 23 December 2011 the Appellant applied to join the Second Respondent as an additional Respondent and not simply as a substitute in the Employment Tribunal proceedings.[6]On 30 January 2012 the Employment Judge sitting alone refused that application in the following terms which were conveyed in a letter on behalf of the Employment Judge:
“The Judge has refused the application on behalf of the Claimant to add Four Seasons as an additional Respondent. There is no claim that the transfer was the reason (or principal reason) for the dismissal of the Claimant was any pending transfer. There is no evidence to support the contention that the employment continued after the dismissal on 12 August 2011 pending the appeal. The Claimant would not therefore have been an affected employee within Regulation 4(3) of the 2006 Regulations at the date of the TUPE transfer and so any employment or liability in connection with employment would not pass to the transferee.”
[7]The Appellant applied for a review of that decision on 13 February 2012. The decision on that review was made on 2 March 2012. The Employment Judge confirmed her earlier decision. The reasons conveyed in a letter of 2 March were as follows:
“… I have come to the same conclusion. The principles I have applied are as follows: 1 Where there is a TUPE transfer (as here) the employment of employees employed immediately before the transfer is the subject of an automatic novation to the transferee. The Claimant was not employed immediately before the transfer. 2 That principle also covers employees who were dismissed before the transfer but where the reason for the dismissal was the transfer. That is not suggested to be the case here. 3 Any liability in respect of any employees who were dismissed before the transfer but for other reasons does not transfer to the transferee. That is the case here. 4 The fact of a pending appeal against dismissal does not mean that the employee was still employed for the purposes of the TUPE Regulations unless there is a contractual provision to the contrary. It is not suggested here that there is any such contractual provision. You have stated that ‘[t]here is copious statutory and common law support’ for your contention that the employment does continue, but you have not cited any. 5 The G4S Justice Services (UK) case is not support for that contention. It is support for the propositions that any obligation to consider an appeal remained with the dismissing transferor, and that if successful then the dismissal would vanish (following Roberts v South West Trains) and would then be the subject of the transfer to the transferee. 6 The fact (if it be a fact) that the Claimant may be deprived of a remedy due to the financial position of the Respondent does not affect the legal position.”
[8]When the Appellant initially sought to appeal against that decision the President of this Tribunal, Langstaff P, made a decision under rule 3(7) of the Employment Tribunal Rules saying that there was no arguable basis for such an appeal. However, as was her right, the Appellant pursued the application further at an oral hearing and on 14 August 2012 HHJ David Richardson allowed the appeal to proceed. Accordingly, the appeal has come before me, sitting alone, today by way of a full hearing. Material legislation[9]As is well known the legal consequences of a transfer of undertakings are addressed by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE) Regulation 4 provides so far as material:
“(1) … 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 group of resources or employees that are 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. (2) Without prejudice to paragraph (1) but subject to paragraph (6) and Regulations 8 and 59 on the completion of a relevant transfer (a) all the transferors rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this Regulation to the transferee and; (b) any act or omission before the transfer is completed of or in relation to the transferor in respect of that contract or a person assigned to that organised grouping of resources or employee shall be deemed to have been an act or omission of or in relation to the transferee. (3) Any reference in paragraph (1) to a person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to a relevant transfer is a reference to a person so employed immediately before the transfer or who would have been so employed if he had not been dismissed in the circumstances described in Regulation 7(1) including where the transfer is effective by a series of two or more transactions, a person so employed and assigned or who would have been so employed and assigned immediately before any of those transactions …”
[10]Regulation 7 so far as material provides:
“(1) Where either before or after a relevant transfer any employee of the transferor or transferee is dismissed, that employee shall be treated for the purposes of part 10 of the 1996 Act (Unfair Dismissal) as unfairly dismissed if the sole or principle reason for his dismissal is (a) the transfer itself or; (b) a reason connected with the transfer but is not an economic, technical or organisational reason entailing changes in the work force …”
[11]As is well known Regulation 7 gives effect in statutory form to the previous law on the predecessor Regulations to be found in the decision of the House of Lords in Litster v Forth Dry Dock & Engineering Company Ltd [1989] ICR 341 . That decision required a purposive approach to be given to the then TUPE Regulations in this country so as to give full effect to the Acquired Rights Directive which the Regulations were intended to implement in domestic law.[12]Returning to the 2006 Regulations, it is also important to refer to Regulations 11 and 12. Regulation 11 provides that the transferor shall notify to the transferee the employee liability information of any person employed by him who is assigned to the organised grouping of resources or employees that is the subject of a relevant transfer in writing or by making it available in a readily accessible form.[13]The employee liability information means the identity and age of the employee, the particulars of employment that an employer is obliged to give an employee pursuant to section 1 of the 1996 Act, information of any disciplinary procedure taken against an employee or a grievance procedure taken by that employee within the previous two years and other relevant information.[14]It is important to note that the remedy for failure to notify of such information is set out in Regulation 12. That enables the transferee to present a complaint to an Employment Tribunal that the transferor has failed to comply with any provision of Regulation 11. The Employment Tribunal on such a complaint has power to make a declaration and to make an award of compensation to be paid by the transferor to the transferee. The Appellant’s submissions[15]Although it has not been possible for this Tribunal to hear oral argument on behalf of the Appellant, I have taken fully into account the succinct and well presented submissions in a skeleton argument.[16]The mainstay of the Appellant’s submissions, which is to be expressed in various parts of that skeleton argument, can be summarised in this way. The Appellant submits that her employment status was preserved by the fact that she had an appeal pending challenging her dismissal at the time of the transfer and which had not been resolved; see for example paragraph 15 of her skeleton argument. Similarly at paragraph 19 she submits that the Appellant’s employment was preserved by her pending appeal when the transfer took place.[17]At paragraph 20 in a similar vein she submits that:
“Since the Appellant had an outstanding appeal at the date of transfer she ought to been treated for the purposes of TUPE in effect as suspended.”
[18]The lynchpin upon which the Appellant relies to advance those submissions is the decision of this Tribunal in G4S Justice Services (UK) Ltd v Anstey & Ors [2006] IRLR 588, a decision of HHJ Peter Clark sitting alone. In that case the two claimants were summarily dismissed for alleged gross misconduct on 13 April 2005. They both lodged internal appeals against dismissal as required within 14 days.[19]The relevant contract in that case was terminated on 30 April 2005 and G4S took over from GSL on 1 May 2005. At the time of transfer therefore, the claimants’ appeals had yet to be determined. Subsequently in late June/early July 2005 GSL, in other words the transferor, heard those appeals. In the result both appeals were successful, their dismissals were overturned and their reinstatement was directed. However, GSL no longer had any work for them as the contract had gone. A preliminary issue came before the Tribunal as to who was the correct employer. On the appeal before this Tribunal the question was formulated on behalf of the appellant, that is the transferee, G4S, in the following way:
“Is an employee who has been dismissed by the transferor, but whose appeal is yet to be heard, employed in the undertaking that is transferred within the meaning of Regulation 5 of TUPE?”
[20]I should interpose that that of course is a reference to the predecessor Regulations and Regulation 5 would now read Regulation 4.[21]The answer which Judge Clark gave to that question was, “It depends”. He then proceeded to set out his explanation by way of analysis in answering that question. From paragraph 12 he referred to the decision of the Court of Appeal in Sainsbury v Savage [1980] IRLR 109 in which the decision of this Tribunal was upheld. In giving the leading Judgment Brightman LJ, as he then was, approved the following passage from the Judgment of the then President of this Tribunal, Slynn P, as he then was, [1978] IRLR 479 at page 481:
“In our view where notice of immediate dismissal is given the dismissal takes immediate effect. The provisions of this contract as to the appeal procedure continue to apply. If an appeal is entered then the dismissed employee is to be treated as being, “suspended” without pay during the determination of his appeal in the sense that if the appeal is successful then he is reinstated and he will receive full back pay for the period of the suspension. If the appeal is not successful and it is decided that the original decision of instant dismissal is right and is affirmed, then the dismissal takes effect on the original date. In our view, that is the date on which the termination takes effect for the purposes of the act.”
[22]As

Judge Clark observed after that passage:

“It will be recalled that the disciplinary procedure in Savage expressly provided for the contract to be suspended pending appeal.”
[23]At paragraphs 14 and 15, Judge Clark noted that in West Midlands Co-Operative Society Ltd v Tipton [1986] IRLR 112 in the House of Lords, Lord Bridge of Harwich approved the reasoning in Savage .[24]At paragraph 17 Judge Clark turned to the question which was, in fact, the question before this Tribunal in that case:
“What if the appeal is successful, the dismissal is overturned and the employee is reinstated?”
[25]Judge Clark drew assistance in answering that question from the case of Roberts v West Coast Trains Ltd [2004] IRLR 788 in which the lead judgment in the Court of Appeal was given by Mummery LJ.[26]At paragraph 21,

Judge Clark said:

“What I draw from Roberts is the concept of the vanishing dismissal viewed retrospectively. Mr Roberts was dismissed at the time when he presented his complaint of unfair dismissal to the Tribunal, thus giving the Tribunal jurisdiction to hear that complaint. However, the dismissal vanished looking back as a result of the internal appeal which he had initiated.”
[27]At paragraph 31 of his Judgment, Judge Clark considered the question ‘does it make a difference that their appeals were not heard before the transfer date?’ And concluded that it does not. Having said earlier in his Judgment that the answer to the issue posed for this Tribunal was, “it depends” Judge Clark returned to this theme in his conclusion at paragraph 35 and answered the question in the following way:
“It depended on whether the appeals against dismissal succeeded and reinstatement was ordered. GSL did uphold the appeals and revoked the earlier dismissal. The Claimants under TUPE were in no worse position than their colleague …”
[28]In other words, Judge Clark considered it to be crucial to his reasoning that on the facts before him what had occurred was that GSL had eventually heard the claimants’ appeals and indeed found in their favour so that the dismissal was overturned. It did not matter that that had not yet occurred at the date of transfer. It was in those circumstances that the Tribunal held that the relevant employees had had their employment transferred to the transferee. Judge Clark also considered that that conclusion was in accordance with the purpose of the Regulations which were designed to implement the Acquired Rights Directive, now 2001/23/EC, replacing the earlier Directive 77/187/EC.[29]As I have said, the lynchpin for the Appellant’s submissions before me is to be found in the decision of Judge Clark in G4S . In my judgment that decision does not bear the weight which has been placed upon it. The material point of distinction is that in the present case the First Respondent had an appeal pending before it at the time of transfer but has not to date determined that appeal, still less directed the Appellant’s reinstatement. In those circumstances, in my judgment, the ordinary position still applies as analysed by this Tribunal in Sainsbury v Savage and subsequently approved by higher courts. That analysis leads to the conclusion that if an appeal is successful it will retrospectively have the effect that an employee is no longer to be treated as dismissed. However, if the appeal is not successful then the dismissal takes effect on the original date. The fundamental point is that when a notice of immediate dismissal is given that dismissal takes immediate effect. That meant that so far as things have stood to date, the effective date of termination in the present case was 12 August 2011, well before the date of the transfer between the two Respondents.[30]Since it is common ground there is no reason to suppose that the dismissal had anything to do with the transfer, there would be no role for Regulation 7 of the TUPE Regulations to play. The ordinary analysis therefore still applies.[31]There is also some further support to be found for the Respondent’s submissions before me, albeit obiter at paragraph 27 in the Judgment of Judge Clark in G4S . In that paragraph Judge Clark summarised the propositions of counsel who was appearing for one of the parties in that case in the following way:
“His propositions proceed on the premise that the contractual obligation to hear and determine the appeals lay with GSL not withstanding the transfer.”
[32]At paragraph 28 of his Judgment, Judge Clark accepted counsel’s analysis including that proposition as I understand it. In any event, as it seems to me, that proposition by counsel was undoubtedly correct. Similarly, in the present case, in my view, the obligation to hear and determine any appeal rested with the First Respondent. If there has been or the Appellant considers that there is any breach of that obligation that, as it seems to me, is a matter between the Appellant and the First Respondent. It does not have the effect of bringing into play the TUPE Regulations and somehow deeming the Second Respondent to have become the Appellant’s employer, still less, as it seems to me, does it impose an obligation on the Second Respondent to hear, conduct and determine any such appeal. It was not the Appellant’s employer on any view at the time of the initial dismissal. As Mr O’Reilly has submitted to me, there would be practical difficulties for such a respondent to be able to know, for example, the full facts of what lay behind the transferor’s decision to dismiss an employee summarily on grounds of misconduct.[33]I have given anxious consideration to whether the approach which the Respondent has advanced thus far before me accords with the purposive approach which undoubtedly has to be taken in this context, in particular having regard to article 3 of the Acquired Rights Directive, which so far as material provides:
“The transferor’s rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer shall by reason of such transfer to be transferred to the transferee.”
[34]In my judgment that is given full effect by the TUPE Regulations. It does not require any further strong interpretation or the insertion of words, for example, into Regulation 7 to arrive at a result different from the one which I have already indicated. Regulation 7 already gives effect in a purposive way to article 3 and refers in terms to dismissal. As I have already indicated, the dismissal in this case had nothing to do with the transfer. In those circumstances, as it seems to me, Regulation 7 has no role to play for the reasons I have already given. Furthermore, I accept the submission that Mr O’Reilly made to me as to what the underlying Directive requires; in particular he referred me to a passage in the speech of Lord Oliver of Aylmerton in Litster at page 637 where Lord Oliver cited an earlier decision of the European Court of Justice in case 101/87 P.Bork International A/S v Foreningen af Arbejdslederre I Danmark [1989] IRLR 41. At page 44 of that Judgment, the Court of Justice said:
“The only workers who may invoke [the] Directive … are those who have current employment relations or a contract of employment at the date of transfer. The question whether or not a contract of employment or employment relationship exists at that date must be assessed under national law subject however to the observance of the mandatory rules of the Directive concerning the protection of workers against dismissal by reason of the transfer …”
[35]The words which I have emphasised in that quotation make it clear, as indeed the House of Lords held in Litster , that the ordinary analysis under national law will have to be modified so as to protect a worker against dismissal by reason of the transfer. That is now given effect by Regulation 7. In the absence of such a situation however, the question whether or not a contract of employment or employment relationship exists at the relevant date must be assessed under national law. The analysis which applies under national law is the one which I have already sought to set out.[36]Accordingly, in my judgment there is no incompatibility between domestic legislation as construed by the courts and Tribunals of this country to date and the requirements of the Acquired Rights Directive. For that reason no strained interpretation of domestic law is required.[37]Finally, I have had regard to the Appellant’s submission based upon Regulation 11 of the TUPE Regulations. In my judgment, reliance upon Regulation 11 does not take the analysis further and does not support the Appellant’s submissions. Regulation 11 is concerned with the relationship between the transferor and the transferee. In particular, it imposes an obligation to provide relevant employee liability information to the transferee. If there is a breach of that obligation for any reason the remedy, as Regulation 12 makes clear, lies in the hands of the transferee not, in the hands of any employee. Still less do Regulations 11 and 12 have any impact altering the analysis which I have so far sought to give based, as I understand it, on earlier authority in this country. It does not affect the analysis that as at the date of the transfer in this case the Appellant was already dismissed. Accordingly, the transfer of rights and liabilities effected by TUPE did not have the effect of making the second Respondent the Appellant’s employer. Conclusion[38]For the reasons I have given, this appeal is dismissed.