Mowlem Technical Services (Scotland) Ltd v King
| Jurisdiction | Scotland |
| Judgment Date | 10 June 2005 |
| Date | 10 June 2005 |
| Docket Number | No 41 |
| Court | Court of Session (Inner House - Extra Division) |
Dinah Illius Inner House Extra Division
Lord Osborne, Lord Nimmo Smith, Lord Kingarth
Employment - Transfer of undertakings - Assignment of employee - Whether employment tribunal erred in holding employee not wholly or predominantly employed in undertaking - Transfer of Undertakings (Protection of Employment) Regulations 1981 (SI 1981/1794)
The Transfer of Undertakings (Protection of Employment) Regulations 1981 (as amended) provide that in certain circumstances where a business or part of it is transferred to another employer, the contracts of employment of the employees concerned are transferred automatically from one employer to the other.
In 1997 the appellants won the housing maintenance contract of the second respondents, a local authority. They administered it from their existing branch in Grangemouth, from which they administered the smaller contracts they already held. The local authority contract generated about 80 per cent of the turnover of the branch. The first respondent was then appointed as branch manager. He was responsible for supervising all the contracts which were managed from the branch. Two other employees, G and S, liaised with the local authority and supervised the tradesmen on a day-to-day basis. They spent 80 per cent of their time on the local authority contract. In 2001 the second respondents decided to determine the contract and carry out the work in house. A dispute arose over the transfer of certain employees, including the first respondent, G and S. Those three employees brought proceedings in the employment tribunal, which held that the contract did constitute an undertaking for the purposes of the regulations, that there had been a relevant transfer, and that G and S were wholly or predominantly employed in that undertaking but that the first repondent was not. The appellants appealed to the employment tribunal, which refused the appeal. They appealed to the Court of Session. They argued that while the issue of assignment was a question of fact, the employment tribunal had erred in law in failing to take account of the evidence of the first respondent, in particular that he had spent about 80 per cent of his time on the local authority contract, the same percentage as G and S. They also argued that the decision was perverse, and that no reasonable tribunal, properly directed, would have concluded that the first respondent had not been assigned to the contract, where G and S were so assigned. The second respondents submitted that time spent on the contract was only one factor among others which had to be considered in reaching a conclusion as to whether the first respondent had been assigned to the undertaking, and that the tribunal had been entitled to take a different view in relation to G and S.
Held that: (1) a range of circumstances require to be considered in reaching a decision on the question of assignment, and there was no reason to suppose that the employment tribunal had not followed that approach (para 15); (2) the employment tribunal did not require to set out all the evidence it heard on a particular matter; it required to consider the relevant evidence and make proper findings in fact, and it was clear from the extended reasons that the tribunal had considered the evidence of the first respondent and had taken it into account (paras 16, 17); (3) the test for perversity of a decision was whether an overwhelming case was made out that the decision was one which no reasonable tribunal on a proper appreciation of the evidence and the law would have reached, and that standard had not been achieved in the present case: there was in the evidence about the nature of the jobs a rational basis to differentiate between the first respondent and G and S (para 18); and appeal refused.
Raymond John King, Alan Small and David Stirling Gray brought proceedings against Falkirk Council and Skillbase Services Ltd (thereafter Mowlem Technical Services (Scotland) Ltd) in the employment tribunal concerning a dispute arising out of the transfer of an undertaking and the question of assignment of employees. On 23 May 2003 the tribunal held, inter alia, that Mr King was not wholly or predominantly assigned to the undertaking. The appellants appealed to the Employment Tribunal, which on 12 January 2004 refused the appeal. They appealed to the Court of Session. The full facts and averments of the parties are sufficiently set forth in the opinion of the court.
The cause called before an Extra Division, comprising Lord Osborne, Lord Nimmo Smith and Lord Kingarth, for a hearing on the summar roll on 26 May 2005.
Cases referred to:
Botzen and ors v Rotterdamsche Droogdok Maatschappij BVUNK [1986] 2 CMLR 50; [1985] ECR 519
Buchanan-Smith v Schleicher & Co International LtdICRUNK[1996] ICR 613; [1996] IRLR 547
Campion v Hamworthy Engineering LtdICR [1987] ICR 966
Hennessy v Craigmyle & Company LtdICRUNK [1986] ICR 461; [1986] IRLR 300
Jones and Kingston v Darlows Estate Agency EATRF 97/1246/3, 6 July 1998, unreported
Meek v City of Birmingham District CouncilUNK [1987] IRLR 250
Melon v Hector Powe LtdSCUNK 1980 SC 188; [1980] IRLR 80
OCO Mechanical Engineering Ltd v J Bissett and orsEAT/6/98, 11 Nov 1998, unreported
Prosperis Ltd v Spencer UKEAT/0988/03/MAA, 17 May 2004, unreported
Retarded Children's Aid Society Ltd v DayWLRICRUNK [1978] 1 WLR 763; [1978] ICR 437; [1978] IRLR 128
Scottish Midland Co-operative Society Ltd v CullionUNK[1991] IRLR 261
Walls Meat Co Ltd v SelbyICR [1989] ICR 601
Web (Duncan) Offset (Maidstone) Ltd v CooperUNK [1995] IRLR 633
Yeboah v CroftonUNKUNK [2002] EWCA Civ 794; [2002] IRLR 634
At advising, on 10 June 2005, the opinion of the Court was delivered by Lord Osborne-
Opinion of the Court-
[1] The appellants in this matter are Mowlem Technical Services (Scotland) Ltd, formerly Skillbase Services Ltd. The respondents are first, Raymond John King, and second, Falkirk Council. The background to this appeal is that the housing maintenance contract of the second-named respondents was put out to tender in about 1997. The contract was won by the appellants. The main purpose of the contract was the provision of building maintenance to a portion of the second-named respondents' council housing stock. This involved work being executed by a variety of trades. For the purpose of the performance of the contract, the appellants employed around 60 people and made use of about 50 vehicles, together with other assets. These other assets included premises, which were made available to them by the second-named respondents on a rent-free basis. It was a condition of the contract that the appellants delivered services through what were called local repair teams operating out of the premises just mentioned. This housing general maintenance contract was a substantially larger contract than any of the others held by the appellants in the area. Nevertheless, they did have...
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