CELTEC Ltd v Astley
| Jurisdiction | England & Wales |
| Judge | Lord Justice Schiemann |
| Judgment Date | 09 August 2002 |
| Neutral Citation | [2002] EWCA Civ 1035 |
| Docket Number | Case No: A1/2001/2280 |
| Date | 09 August 2002 |
| Court | Court of Appeal (Civil Division) |
[2002] EWCA Civ 1035
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Schiemann
Lord Justice Laws and
Mr Justice Jackson
Case No: A1/2001/2280
Gavin Millar Q.C. (instructed by Russell Jones & Walker)for the Appellants
John Bowers Q.C. (instructed by Mace & Jones) for the Respondent
This is the judgment of the court. Before us is an appeal from a majority decision of the Employment Appeal Tribunal ("EAT") of 5 th October 2001, allowing the appeal of Celtec Limited from a decision of the Employment Tribunal ("ET") dated 22 nd December 1999.
The appellant employees had been made redundant by Celtec in 1998 (Hawkes) or were concerned about possible redundancy (Astley and Owens). They sought a determination by the ET under s. 11 of the Employment Rights Act 1996 ("the ERA") as to their length of continuous employment as at dismissal for the purposes of establishing their redundancy entitlements and other accrued rights on termination. These were test applications on behalf of a group of 15 employees of R. However, the determination of the issues in this case potentially affects a large number of former Department of Employment ("DoE") Civil Servants who transferred to Training and Enterprise Councils ("TECs") shortly after their establishment in the early 1990s.
The unusual background to the case is well explained in the decision of the Employment Tribunal to whom we would like to pay tribute. They were faced with unusual and complicated facts and had cited to them some 25 decisions here and abroad. Their resulting decision is a well reasoned 23 paragraphs. We have italicised the more important findings.
2. In 1989 the government announced a new initiative for training in the 1990's and this included the establishment of Training and Enterprise Councils known as TECs. … in England and Wales. This was, as we find, a radical initiative. It was part of the contraction of the civil service and was also intended to provide a more effective liaison between training organisations and enterprise organisations, i.e. groups of employers, with a view to delivering training that was truly needed by industry on a far more local basis than had hitherto been the case.
3. It was always anticipated that this initiative would take some time to implement and the staff concerned, who were all civil servants, were to be seconded to the newly created TECs for a period of three years. In many cases it turned out to be shorter because the secondment was terminable at an earlier date as stated in the letters each secondee received. In some cases it turned out to be longer than three years because some secondees to the TECs applying to be taken back into the civil service had their secondments extended until such time as the civil service had suitable vacancies for them to return to.
6. The TECs are companies limited by guarantee. … The government created the TECs not by any legislation but by a process of policy initiatives and publications. The TECs effectively had a monopoly on the management of all the training and enterprise activities previously carried on by the Employment Department in England and Wales and the TECs were given free access to the information systems and database. Some 80 TECs took over the work of the 60 previous area offices of the Department. We have found as an agreed fact that premises in Wrexham and in Bangor previously used by the Department of Employment as area offices were subsequently taken over by the TECs. There was initially little change in the daily working routine of the staff concerned or in the tasks on which they were engaged.
7. We heard a considerable amount of evidence about the manner in which the staff were seconded and then were asked to take up direct employment with the TEC. It was always the plan that the staff would be seconded. When the TECs originally started up they employed only a handful of their own staff in the whole of England and Wales. The project was staffed by secondees, all civil servants. The projected period of secondment was for some three years. After the three years, or just before, secondees were asked to elect either to resign from the civil service and to take up employment with TEC or to revert to a role in the civil service.
The appeal before the court concerns secondees who elected to resign from the civil service and to be employed by one of the TECs. They contend that this did not break their continuity of employment. They all rely on the Acquired Rights Directive 77/187/EEC. Mr Astley relies secondarily upon the Transfer of Undertakings (Protection of Employment) Regulations 1981, commonly referred to as TUPE which purported to transpose the Directive into national law. The other two can not rely on TUPE for reasons not presently relevant. The TEC argued, and the majority of the EAT accepted, that by the time the civil servants resigned from the civil service and became employed by the TEC, the relevant undertaking had already been transferred and therefore neither the Directive not TUPE can avail the erstwhile civil servants.
Before turning to consider the legal arguments, we set out the relevant findings of the Employment Tribunal.
11. The first issue we had to consider was whether there was a transfer of an undertaking. …we … find that there was a transfer of an undertaking. The matter does not admit of a great deal of debate in our view. We should define what we think the undertaking is which was transferred: that is the management of the government funded post-16 vocational training and enterprise activities in England and Wales together with the information systems and database, some staff and some premises. That we think is a recognisable and definable economic entity. There is no doubt that it was run in 1989 by the government. By 1996 all the staff originally seconded had been transferred and the process was complete. The TECs in England and Wales now run these activities with their own staff.
12. Further, it was clear … that the undertaking in question was a "labour intensive" undertaking and therefore the movement of staff from the Department to the TECs was an important defining part of the undertaking and its transfer.
13. The second question we are asked to resolve is whether the applicants were assigned to the undertaking. … In our view they clearly were. If the three applicants before us are anything to judge by they were full time employees dedicated to the undertaking which we have defined, to the extent of 100%. When the North- East Wales TEC started operations in September 1990 there was no difference between tasks they performed with the TEC and the tasks they had with the Department of Employment the day before. It is acknowledged that many of the programmes which the government had guaranteed to provide for prospective trainees and trainees in the middle of their programmes, had to be honoured and continued. We emphasise the fact that training was involved. The careers of young people were at risk and there could be no interruption of activities. The government had a responsibility to the trainees which could not be disrupted. From that point of view a seamless transition was important even if the economic structure was to change with time.
15. … We have come to the firm conclusion that the TEC was an emanation of the State. …
20. The seventh point we have to decide, and probably the most fundamental in this case, was the time of the transfer. Herein lies the novelty of the case. … We have not been given precise dates but we assume that September 1990, which was when the North- East Wales TEC commenced business, was the date on which the transfer commenced. We considered that the direct employment of previously seconded staff represented and constituted a transaction and it was one of series of steps in a very long process, which was a planned process predicted and envisaged from the start, which was to last several years. We have not encountered a case or been referred to a case where the business of transfer has taken some six years, but that seems to be the case in the establishment of the TECs. Regulation 5 (3) of the Transfer Regulations provides as follows:
"… where the transfer is effected by a series of two or more transactions the person so employed immediately before any of those transactions."
referring to the employees whose rights are protected. In our view, the transfer was a long process starting some time in 1990 as affects these applicants, and ending on a national basis some time in 1996. We have no need to look no further than 1994 in this particular case. [It is common ground that this was a mistaken reference to 1993] That being the length of transfer there were several transactions. Our analysis is that each time a seconded employee became directly employed by the TEC there was another transaction and immediately before that transaction ("any transaction") that employee was employed by the transferor, i.e. by the civil service and therefore that employee's rights passed over to the transferee which was the TEC. We see no reason in principle why such a very long period should not be found to be a period of the transfer when that was the plan from the outset. It has been rightly said by the applicants that the setting up of the TEC was "an experiment". We also have considered the provisions in the terms of employment with the TEC which was to include a five year period of underpinning by the government of the TECs liabilities. … The...
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