CARLISLE FACILITIES GROUP v MATRIX EVENTS & SECURITY SERVICES and SEA FRANCE Ltd and Mr COLIN CARR and Others
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MAY,LADY JUSTICE SMITH |
| Judgment Date | 28 February 2005 |
| Neutral Citation | [2005] EWCA Civ 230 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 February 2005 |
| Docket Number | A2/2004/2357 |
[2005] EWCA Civ 230
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(HIS HONOUR JUDGE MCMULLEN QC,
MRS D CHAPMAN and MR D NORMAN)
Royal Courts of Justice
Strand
London, WC2
Lord Justice May
Lady Justice Smith
A2/2004/2357
MR DANIEL BARNETT (instructed by Messrs Beers Solicitors) appeared on behalf of the Applicant
The Respondents did not appear and were not represented
Mr Barnett is here to support an application for permission to appeal on behalf of Carlisle Facilities Group ("Carlisle") against a decision of the Employment Appeal Tribunal (presided over by His Honour Judge McMullen QC) on 16th September 2004. The EAT dismissed an appeal from a decision of an Employment Tribunal of 29th January 2004. The Employment Tribunal gave its extended reasons on 18th March 2004.
32, or thereabouts, employees or Carlisle claimed unfair dismissal and breaches of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE") against, in the first instance Carlisle and/or another organisation called Matrix Events and Security Services ("Matrix"). Carlisle were the employer of these employees. Matrix would be their employers if there was a transfer under TUPE and, at least at present, the contest was between Carlisle and Matrix upon a preliminary hearing before the Employment Tribunal.
The facts are briefly summarised in the summary reasons which the Employment Tribunal first gave on 29th January. I cannot do better than just read them. They say this:
"1. The Third Respondent, Sea France Ltd is a wholly owned subsidiary of Sea France SA and is a provider of cross-channel ferry services. Depending on the time of year, Sea France operated between 30 and 50 sailings per day.
2. Sea France had a requirement for guarding services and the Second Respondent, Carlisle Facilities Group provided such services. At the relevant time there were approximately 32 security officers who were employed by Carlisle, specifically and exclusively to provide the guarding services on the cross-channel ferries. The duties of the guards were mainly to endeavour to prevent theft and smuggling and to assist in the apprehension of any illegal immigrants.
3. Carlisle, and its predecessor, Capital Security Services, had held this contract for about eight years.
4. Bernard Leupe was employed by Sea France and based in Calais and had direct control of the security contract.
5. Bernard Leupe became dissatisfied with the general level of performance by Carlisle, he was concerned at the behaviour of some of the guards and particularly concerned that the staffing levels were poor. He decided to terminate the contract with Carlisle and Carlisle's contract for the provision of security services ended on 19 May 2003.
6. On behalf of Sea France, Bernard Leupe negotiated a new Guarding Contract with the First Respondent, Matrix, and they took over similar guarding duties as were performed by the Carlisle Guards. Since Matrix took over the manning levels have improved and the general performance has been more satisfactory.
7. The issue in this case is whether or not there was a transfer of an undertaking from Carlisle to Matrix. When the contracts were changed over, no money changed hands, there was no transfer of any assets of any sort, tangible or intangible, and no workers were transferred. The reason why the workers were not transferred was the dissatisfaction of Sea France with the general level of performance by Carlisle.
8. We find that there was an economic entity which was originally the provision of guarding services by Carlisle. Since nothing passed between the two companies, the situation in this case was that the contract for the provision of guarding services by Carlisle came to an end, and there then started a new contract for the provision of similar services by Matrix.
9. Having analysed the facts and the relevant legal authorities, we find that there was no transfer of an undertaking.
10. We find that the correct Respondent for these proceedings is the Second Respondent, Carlisle Facilities Group."
In their extended reasons the Tribunal expanded on that summary decision. They said at paragraph 18 of the extended reasons:
"On the change over of the guarding contract, no money changed hands between Carlisle and Matrix, there was no transfer of any assets of any kind, whether tangible or intangible, no workers were transferred, there was simply the cessation of one contract and the commencement of another one.
…
20. The reason why the Carlisle guards were not taken over by Matrix was because of the dissatisfaction of Sea France with the general level of performance and manning shown by the Carlisle guards. In fact, since Matrix had a smaller workforce than Carlisle, Matrix was obliged to advertise for staff in order to meeting their guarding commitments.
21. At the relevant time, there was an economic entity which was the provision of guarding services by Carlisle."
The Tribunal then set out seven or eight authorities which they had been referred to and which are the well-known authorities on this subject matter. They said then, having done so:
"29. We must then go on to consider whether or not this undertaking was transferred. In many cases on the Transfer of Undertakings Regulations Tribunals are asked to carry out a balancing exercise to see to what extent staff were transferred, assets were transferred and payment made for plant and/or goodwill.
30. In this case, the exercise is easy because nothing at all was transferred. Both companies had the benefit of the Portakabin provided by Sea France, but apart from that, nothing at all passed between Carlisle and Matrix. There was no payment for plant, machinery or stock, there was no payment for goodwill, no assets, either tangible or intangible were transferred, and no staff at all transferred. It was, therefore, on the face of it, simply the cessation of one guarding contract and the commencement of a new guarding contract."
There is then a quotation from my judgment in the ADI case, and the Employment Tribunal came to the point where it said that:
"32. The remaining issue in this case, which is of the greatest importance, is to decide why the employees of Carlisle were not taken on by Matrix.
33. On this point, we derive benefit from the decision in ECM which decided that Tribunals were entitled to have regard, as a relevant circumstance, to the reason why employees were not transferred"
They directed their minds to that reason. There had been ample evidence, they said, to show that Carlisle were not providing the manning levels required, and they found that Mr Leupe was dissatisfied with the performance of Carlisle, both as to manning levels and to the general performance of some of the guards. They accepted the evidence they had heard that he did want any of the Carlisle guards employed under the Matrix contract.
Then there is this critical paragraph in the Employment Tribunal's decision:
"36. Having looked at the relevant documents and having analysed the evidence presented to us, we are in no doubt that the reason why the guards were...
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