BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £5, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | ||
United Kingdom Employment Appeal Tribunal |
||
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Primark Stores Ltd v. Beck & Anor [2006] UKEAT 0209_06_0707 (7 July 2006) URL: http://www.bailii.org/uk/cases/UKEAT/2006/0209_06_0707.html Cite as: [2006] UKEAT 209_6_707, [2006] UKEAT 0209_06_0707 |
[New search] [Printable RTF version] [Help]
At the Tribunal | |
On 9 June 2006 | |
Before
THE HONOURABLE MRS JUSTICE COX
DR B V FITZGERALD
MR P M SMITH
APPELLANT | |
2) ALLDERS DEPARTMENT STORE LIMITED IN LIQUIDATION) |
RESPONDENTS |
Transcript of Proceedings
JUDGMENT
- and -
For the Appellant | MR IAN GATT QC Messrs Herbert Smith LLP Solicitors Exchange House Primrose Street London EC2M 2HS |
For the 1st Respondent | MR BENJAMIN BURGHER (Of Counsel) Instructed by: ProLegal Solicitors Ltd Dukes House 32-38 Dukes Place London EC3A 7LP |
For the 2nd Respondent | NEITHER PRESENT NOR REPRESENTED |
Appeal raised issues of procedural irregularity at a PHR in a TUPE dismissal claim and a challenge to the Chairman's decision as to the date of transfer to the Appellants. Appeal allowed.
THE HONOURABLE MRS JUSTICE COX
This is the full hearing of an appeal by the Second Respondents below, Primark Stores Limited (Primark) against a decision of the Birmingham Employment Tribunal, promulgated with written reasons on 20th January 2006, in which the Chairman, sitting alone on a Pre-Hearing Review (PHR), decided that there was a transfer of the Claimant's employment from the First Respondents, Allders Department Stores Limited to Primark, by virtue of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE). He therefore dismissed the Claimant's claim against Allders and directed that her claims against Primark should proceed to a hearing.
"(1) The Chairman erred in proceeding to deal with the issue of whether there was a TUPE transfer at the PHR, given the expressed and limited scope of that hearing, as it was reasonably understood by Primark. There was therefore a procedural irregularity; Primark's representative was unprepared for what transpired and unfairly criticised by the Chairman.
(2) Having wrongly decided to proceed, the Chairman either failed to determine when the transfer had taken place or wrongly and perversely concluded that it had taken place on 11th February 2005, before the termination of the Claimant's employment."
The Chairman's decision, that there was a relevant transfer of the Claimant's employment to Primark, is therefore said to be fundamentally flawed.
In view of the alleged procedural irregularity below it is necessary for us to deal with material events before and after the hearing in more detail than would usually be the case so that the issues on appeal may be properly considered. The Claimant began her employment with Allders in July 2000 and she was department manager of the soft furnishings and linens department in their Coventry store. In January 2005 Allders went into Administration and Joint Administrators were appointed. The decision was taken to reduce the workforce and, on 11th February 2005, the Claimant's employment was terminated without notice, as was the employment of a large number of other employees. The Claimant was not at work on 11th February however and she was told about her dismissal when she went into work on the following day.
"(a) that she was dismissed on 11th February by the Joint Administrators, who stated in the letter of dismissal that it was because Allders could no longer make payments for her services (paragraph 6);
(b) that on 11th February the Joint Administrators sent an email to the Coventry store manager announcing that the Coventry store was to be taken over by Primark (paragraph 3);
(c) that the week after she was dismissed the Joint Administrators went on to engage temporary members of staff to work at the Coventry store during the closing down sale (paragraph 9); and
(d) that the Coventry store remained open until 24th March 2005 and that "Primark took over the store on 11th March 2005 along with the Allders employees who remained at that point." (paragraph 10)
"The Second Respondent entered into a contract with the Joint Administrators of the First Respondent, to acquire any stores, shortly before midnight on Friday 11 February 2005. The basic effect of the contract was (subject to certain conditions) to commit the Joint Administrators to sell and the Second Respondent to buy certain stores (including the Coventry store at which the Claimant alleges she worked) on 25 March 2005. The contract did not commit the Second Respondent to take on all employees of the Coventry store.
…
"The Second Respondent also contends that the Joint Administrators' dismissal of the Claimant was for an economic, technical or organisational reason entailing changes in the workforce of the First Respondent (an ETO Reason) (under Regulation 8(2) of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE)).
…
"The Second Respondent accepts that the Coventry store remained open until 24 March 2005. However, the Second Respondent did not acquire the store until 25 March 2005 (in accordance with the terms of the contract dated 11 February 2005)
…
"The Second Respondent does not, at present, have sufficient information on which to accept or dispute the Claimant's assertion that she was unfairly dismissed contrary to the Employment Rights Act 1996. However, the Second Respondent does contend that the Claimant's dismissal was not automatically unfair under TUPE because it was for an ETO Reason arising out of a reduced requirement by the First Respondent for management employees."
"I have been directed by a Chairman, Mr S Ahmed, to outline that the case will now be listed for a Pre-Hearing Review, to determine whether the claimant was employed by the second respondent, Primark Stores Ltd. The hearing will be given a time estimate of one hour and will be heard by a Chairman sitting alone."
The stated purpose of the PHR, the time estimate of one hour and fact that the Chairman would be sitting alone were facts repeated in a subsequent letter from the Tribunal dated 18th August and in the formal Notice of Hearing sent out on 1st September 2005, which included the following:
"1. A chairman has directed that a pre-hearing review is to be held. The specific preliminary issue to be considered at the hearing is as follows: To determine whether the Claimant was employed by the Second Respondent.
2. The pre-hearing review will be heard by a chairman at 09:45 am on Tuesday, 25 October 2005 at 2nd Floor, Phoenix House, 1-3 Newhall Street, Birmingham, West Midlands, or as soon after that time as the chairman can hear it. It has been given a time allocation of 1 hour. If you feel that this is insufficient, please inform us in writing within 5 days of the date of this letter."
"I have been directed by a Chairman, Mr S Ahmed, to say the Pre Hearing Review listed for 25th October 2005 will only deal with the issue of whether the Claimant was employed by the second responded. The time estimate for the Pre Hearing Review should be half a day."
The alteration of the time estimate from one hour to half a day was unexplained and neither Mr. Gatt QC, appearing before us for Primark, nor Mr. Burgher, counsel for the Claimant who did not appear below, was able to assist as to the basis for it. In any event the Chairman was still to sit alone and no directions as to preparation for this hearing were given.
"The main issue to be decided at this hearing is the question of whether our client's employment transferred to your client. We note that your client's case is that her dismissal was unrelated to the transfer and as such her employment would not transfer. This is clearly a question of fact."
Subsequently, in their response to Primark's request for a review by the Chairman of his decision, the Claimant's representatives stated that they had understood the purpose of the PHR to be as follows:
"The purpose of the Pre-Hearing Review was to decide if the Claimant was employed by the Second Respondent. This clearly meant the Tribunal was to decide if the Second Respondent had any liability for the Claimant for the purposes of the claims she had brought, ie, if she was to be treated as employed by the Second Respondent for the purposes of enforcing her rights against them under TUPE."
Since whether the Claimant was employed by Primark is a different question from whether liability for her dismissal passed to Primark on transfer and whether she was therefore to be treated as employed by them, the view taken by Primark was that the hearing on 25th October would be concerned only with the former question, as identified by the Tribunal, for which disclosure and exchange of evidence was unnecessary. They therefore did not disclose any of the documents requested before 25th October. Nor did the Claimant's representatives seek any order for disclosure from the Tribunal before 25th October. We note, in addition, that no information or documentation was sought by the Claimant's representatives from Primark, in this letter, as to when the transfer from Allders had taken place or was completed.
Primark's solicitors have prepared a detailed Note of what took place at this hearing which, apart from one matter to which we shall refer later on, is agreed. Allders did not appear and were not represented. Nor have they taken any part in this appeal. Both Primark and the Claimant were legally represented, the Claimant by Mr. Uberoi and Primark by Mr. Taggart. It is clear from this Agreed Note that the Chairman's view as to the ambit of the issues he was to determine at this hearing was very different from that of Mr Taggart. After asking initially whether there were skeleton arguments (there were none from either side) the Chairman asked which witnesses were attending. Mr. Taggart indicated that there were no witnesses attending for the Respondents. The Note then shows that there was the following discussion:
"6. The Chairman asked Mr Taggart why no witnesses were attending for the First or Second Respondent and how the First and Second Respondent would adduce any evidence. Mr Taggart said that he intended to rely on the Claimant's evidence and that it would not be cost effective for witnesses for the First or Second Respondent to attend the pre-hearing review where the Claimant's evidence would be sufficient. Mr Taggart also said that, as far as he was aware, Andrew Pepper (one of the Administrators with some knowledge of the Coventry Store in which the Claimant was employed) was away on holiday. The Chairman asked whether Mr Taggart had applied for a postponement of the pre-hearing review or applied for a witness order against Mr Pepper. Mr Taggart confirmed that he had not made any such applications because he did not think they were necessary given the limited nature of the pre-hearing review."
"13. The Chairman asked Mr Taggart again how he was going to adduce any evidence without any witnesses. Mr Taggart said that the Claimant had confirmed the content of her witness statement and had answered various questions on cross-examination and that he thought witnesses for the Second Respondent would, therefore be unnecessary at the pre-hearing review.
14. The Chairman asked about the sale and purchase agreement and when it was actually dated, to which Mr Taggart replied 11 February 2005. The Chairman asked Mr Taggart why he had only supplied a small part of this document. Mr Taggart replied that some of the terms are confidential. He confirmed he had not sought leave to exclude confidential documents. The Chairman said that was unacceptable. The Chairman also asked where the list of employees was in the document, to which Mr Taggart replied there was no list.
15. The Chairman asked Mr Taggart how he was going to adduce evidence as to whether or not the Second Respondent's acquisition of the Coventry store was or was not an acquisition to which TUPE could apply.
16. Mr Taggart said that he thought there was no need to adduce any such evidence. He said that the Claimant had confirmed that her employment had been terminated several weeks before the Second Respondent had taken possession of the store and, therefore, she could not have been employed by the Second Respondent.
17. The Chairman said that her employment could have transferred to the Second Respondent under TUPE. Mr Taggart said that could not have happened because, as the Claimant had confirmed, her employment had been terminated before the Coventry store had been acquired. He added that the question of whether the acquisition of the Coventry store was an acquisition to which TUPE could apply was unnecessary for the purposes of the pre-hearing review.
18. The Chairman said that liabilities for the Claimant's dismissal could have transferred under TUPE to the Second Respondent. Mr Taggart said that any consideration of whether such liabilities could have transferred to the Second Respondent would require consideration of the reason for the termination. Mr Taggart said that if the reason was unconnected to a TUPE transfer or if the reason was an ETO reason, then liabilities for the Claimant's dismissal could not have transferred under TUPE to the Second Respondent. In connection with "ETO" Mr Taggart noted that the Claimant had confirmed that her dismissal was for redundancy. Mr Taggart also said that the transfer of liabilities under TUPE was, however, beyond the scope of the pre-hearing review.
19. The Chairman said that he thought ETO was irrelevant for the purposes of the pre-hearing review, but that whether or not the acquisition of the Coventry store was an acquisition to which TUPE could apply was entirely relevant. He asked Mr Taggart which of the criteria from the ECJ authority "Spijkers" were or were not present in the acquisition.
20. Mr Taggart said he thought this question was irrelevant for the purposes of the pre-hearing review because of the scope of the pre-hearing review and the evidence given by the Claimant, namely that she was dismissed before the Second Respondent had acquired the Coventry store. Mr Taggart also said that there was no one in the Tribunal who could give evidence as to whether such criteria were or were not present in the acquisition.
21. The Chairman asked Mr Taggart again which of the criteria were or were not present. Mr Taggart said that in order to assist the Chairman he could refer to extracts from the sale and purchase agreement that was signed on 11 February 2005, but not completed until 25 March 2005, and could try to provide relevant information but that he was not giving evidence whether on behalf of the Second Respondent or anyone else. The Chairman reminded Mr Taggart that the only document he had produced had a date of 11 February 2005, and asked if he was suggesting that a company could be bought on an agreed date, and the transfer then be made on a later date. Mr Taggart repeated that the sale and purchase agreement was signed on 11 February 2005 but not completed until 25 March 2005, so any transfer would not have taken place until 25 March 2005.
22. The Chairman asked Mr Taggart what the business of the transferor was and what the business of the transferee was, whether any assets had been acquired, whether the majority of the employees had been taken over and whether any customers had been retained.
23. Mr Taggart said the First Respondent was a department store and that the Second Respondent was predominantly a clothing store, that the premises had been acquired but no stock, that around 1,000 employees had been employed in the 5 premises immediately before the Second Respondent had acquired them and that most of those employees had been dismissed as redundant by the Second Respondent shortly after the acquisition had completed at the end of March 2005.
24. The Chairman asked Mr Taggart whether he had any further submissions. Mr Taggart said that the information he had provided about the sale and purchase agreement had been to assist the Chairman and had not been submissions. Mr Taggart said that his submissions were that the Claimant had confirmed that her employment had been terminated before the acquisition of the Coventry store by the Second Respondent and the Claimant could not, therefore, have been employed by the Second Respondent.
25. The Chairman asked Mr Uberoi whether he had any submissions to make. Mr Uberoi commented that Mr Taggart had not brought any witnesses at all to the pre-hearing review and, therefore, did not adduce any evidence. Mr Uberoi suggested that without any evidence to the contrary from the Second Respondent the Chairman should prefer the Claimant's evidence and find that the Claimant had been an employee of the Second Respondent.
26. The Chairman retired briefly and then delivered his decision to the effect that the acquisition of the Coventry store was an acquisition to which TUPE applied, that the Claimant was employed at the time of the acquisition and was so employed by the Second Respondent and that, therefore, the Claimant's claims against the First Respondent should be struck out."
"In summary, the Claimant could only have been employed by the Second Respondent if the alleged transfer took place before the Claimant's dismissal (and if TUPE applied to the transfer). All the evidence before the Tribunal was that the alleged transfer took place after the Claimant's dismissal. Therefore, the Tribunal was not entitled to find that the alleged transfer took place before the dismissal and, therefore, the issue of whether or not TUPE applied to the alleged transfer should not have arisen or been determined."
The judgment was described as being inconsistent with the pleadings, the Claimant's oral evidence, the relevant TUPE Regulations (Regulations 3, 5 and 8 of the 1981 Regulations were set out in full) and with the decisions in the following cases, with extracts from the relevant judgments being set out: Litster v Forth Dry Dock & Engineering Company Limited [1989] IRLR 161 HL; Wilson v St Helen's Borough Council [1989] IRLR 707 HL; Wheeler v Patel and J Golding Group of Companies [1987] IRLR 211 EAT; Celtec Limited v Astley [2005] IRLR 647 ECJ. It was contended that the TUPE issue was irrelevant to determine whether or not the Claimant was employed by the Second Respondent and that it fell outside the stated purpose of the PHR. The Second Respondent was therefore "not expecting to have to make submissions at the Pre-Hearing Review or bring evidence to the Pre-Hearing Review to deal with the TUPE issue". At paragraphs 6.7 and 6.8 Primark said as follows:
"6.7 The Second Respondent submitted that although liabilities under or in connection with connection with the Claimant's terminated employment contract could have transferred to the Second Respondent by virtue of TUPE, that was completely different from the Claimant's employment transferring to the Second Respondent by virtue of TUPE and fell outside the stated purpose of the pre-hearing review. The Second Respondent also submitted that any consideration of whether liabilities under or in connection with the Claimant's terminated employment contract could have transferred to the Second Respondent would also require the consideration of the reason for the termination. If the reason was unconnected to a TUPE transfer the liabilities under or in connection with the Claimant's terminated employment contract could not have transferred to the Second Respondent by virtue of TUPE. If the reason was connected to a TUPE transfer the liabilities could not have transferred if the reason was an economic, technical or organisational (ETO) reason entailing changes in the workforce of the First or Second Respondent. The Tribunal suggested that ETO was irrelevant and made no findings in relation to it.
6.8 The Judgment as it stands could also deprive the Claimant of the opportunity to pursue claims against the First Respondent if the Tribunal finds at the main hearing that the liabilities under or in connection with the Claimant's terminated employment contract with the First Respondent (including in relation to the termination of her employment) do not transfer to the Second Respondent by virtue of TUPE. This could occur if, for example, the Tribunal finds at the main hearing that the termination of the Claimant's employment was for an ETO reason."
The Chairman was therefore asked to revoke his judgment, to state that the Claimant was never employed by Primark and to reinstate her claims against Allders. It was expressly submitted that such a course would avoid the need for Primark to appeal against the judgment to the EAT, thereby avoiding unnecessary costs and delay.
"… has either already ventilated the matters referred to in his application for a review or could have done so at the hearing. There is nothing in the application to suggest that the interests of justice require the matter to be reviewed. The purpose of the hearing was precisely to determine whether there was a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 1981 and this was the issue that was determined."
Mr. Gatt submits, and we agree, that the issue said here to be precisely the issue to be determined at the PHR was not, in fact, the issue which was communicated to the parties in correspondence from the Tribunal and in the Notice of Hearing.
"… whether or not there was a transfer of the claimant's employment from the first to the second respondent by virtue of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ('TUPE')."
We observe, once again, that this was not the issue which had been identified by the Tribunal in notifying the parties of the PHR.
"7 At the pre-hearing review, it emerged that there was a draft agreement dated 11 February 2005 between Allders, the administrators of Allders and Primark for the sale of some of the premises of Allders to Primark. The relatively few pages of the agreement that have been disclosed and put before the Tribunal show that (at paragraph 9.3) there is the following clause in the agreement:
'The administrators and the companies will co-operate in full with the purchaser in relation to each and every information and consultation procedure and redundancy and dismissal procedure which may be required under the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE), the Trade Union and Labour Relations Consolidation Act 1992 (TULRCA) and the Employment Rights Act 1996 (ERA) regarding the employees and undertaken by the administrators and/or the companies and/or the purchaser (as the case may be).'
8 The first respondent, as I have indicated, has not attended the hearing nor has it been represented, despite giving its consent to the continuation of these proceedings. The second respondents have been represented but have not sought fit however to produce any oral evidence from witnesses. They have not produced any written witness statement. Mr. Taggart has produced only a few pages of the agreement between the administrators and Primark referred to above. That is clearly a relevant document. Mr Taggart's reasoning is that he did not consider it relevant to produce the rest of the document. Usually such agreements contain a list of employees who are regarded as having been transferred under TUPE. It is possible that such a list is set out in the document but it is certainly not before me. Although Mr Taggart has not given oral evidence himself, he has been able to give some information of relevance to the issue before me."
"From the limited amount of information that I have, it is clear that the Coventry site where the Claimant was employed was purchased by Primark … it is not clear whether or not customers were transferred."
"16 Mr Taggart invites me to decide if the employee was dismissed prior to the transfer taking place. Having regard to the purposive approach set out in Litster -v- Forth Dry Dock & Engineering Co Ltd [1989] IRLR 161, I am satisfied that the claimant would have continued to remain in employment were it not for the transfer. In any event, the agreement is dated 11 February 2005 and the claimant was not dismissed until 14 February 2005, three days after the agreement, and was thus employed immediately before the transfer. It seems to me irrelevant whether the agreement was completed subsequently as Mr Taggart suggests, for which he produces no evidence. The fact remains that an agreement in principle was reached on 11 February 2005 which is why the document bears that date. If it had been no more than negotiations, the document would not have been dated.
17 For the reasons given, I am satisfied that there was a relevant transfer of the claimant's employment from the first to the second respondent and that accordingly, the first respondent should be dismissed from the proceedings and the matter shall proceed to a full hearing against the second respondent."
It is common ground that the Chairman's reference to 14th February as the date of the Claimant's dismissal is erroneous.
In responding to Primark's two grounds of appeal (see paragraph 2 above) Mr Burgher, in a series of attractively presented submissions on the Claimant's behalf, sought to persuade us firstly that Mr. Taggart had misjudged the position both before and during the hearing. If he was unprepared for what the Chairman clearly understood to be the issue to be decided or if he considered, as Mr. Gatt expressed it, that "the goal posts had been moved", then the proper course was to disengage from the proceedings and request an adjournment, and not, as occurred, to question the Chairman's assessment of the situation and challenge the basis upon which the parties were there. There was only one way in which the Claimant could have been employed by Primark, namely if there had been a TUPE transfer and it was therefore obvious, at least to the Claimant and her representatives and to the Chairman, that these issues, which were inextricably linked, would be determined at the PHR, in particular when, a month before the hearing, the Tribunal notified the parties that half a day had been allocated instead of the initial one hour listing. Mr. Taggart was therefore the author of his own misfortune in so far as there was any procedural irregularity and he cannot now rely upon his own misjudgement as a ground of appeal.