Rynda (UK) Ltd v MS Ailien Rhijnsburger
| Jurisdiction | England & Wales |
| Judge | Lord Justice Jackson,Lord Justice Kitchin,Lord Justice Floyd |
| Judgment Date | 13 February 2015 |
| Neutral Citation | [2015] EWCA Civ 75 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2013/2928 |
| Date | 13 February 2015 |
[2015] EWCA Civ 75
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
UKEAT057012LA
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Jackson
Lord Justice Kitchin
and
Lord Justice Floyd
Case No: A2/2013/2928
Mr Adam Solomon (instructed by Russell-Cooke LLP) for the Appellant
Mr Aidan Briggs (instructed by Lyons Davidson Solicitors) for the Respondent
Hearing date: 22nd January 2015
This judgment is in seven parts, namely:
| Part 1. Introduction | Paragraphs 2 to 4 |
| Part 2. The facts | Paragraphs 5 to 17 |
| Part 3. The present proceedings | Paragraphs 18 to 24 |
| Part 4. The appeal to the Court of Appeal | Paragraphs 25 to 30 |
| Part 5. The law | Paragraphs 31 to 45 |
| Part 6. Decision | Paragraphs 46 to 57 |
| Part 7. Executive summary and conclusion | Paragraphs 58 to 60 |
This is an employer's appeal against a decision that the claimant's employment automatically transferred to it under the Transfer of Undertakings (Protection of Employment) Regulations 2006. I shall refer to those regulations as the "TUPE Regulations" or "TUPE". The issue in the appeal is whether, on the facts found by the employment tribunal, the claimant constituted an "organised grouping of employees" falling with regulation 3 (3) (a) (i) of TUPE.
The TUPE Regulations, so far as relevant, provide:
" Interpretation
2. (1) In these Regulations —
"assigned" means assigned other than on a temporary basis;
….
references to "organised grouping of employees" shall include a single employee;
….
"relevant transfer" means a transfer or a service provision change to which these Regulations apply in accordance with regulation 3 and "transferor" and "transferee" shall be construed accordingly and in the case of a service provision change falling within regulation 3(1)(b), "the transferor" means the person who carried out the activities prior to the service provision change and "the transferee" means the person who carries out the activities as a result of the service provision change;
….
A relevant transfer
3. (1) These Regulations apply to —
(a) a transfer of an undertaking, business or part of an undertaking or business situated immediately before the transfer in the United Kingdom to another person where there is a transfer of an economic entity which retains its identity;
(b) a service provision change, that is a situation in which —
(i) activities cease to be carried out by a person ("a client") on his own behalf and are carried out instead by another person on the client's behalf ("a contractor");
(ii) activities cease to be carried out by a contractor on a client's behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by another person ("a subsequent contractor") on the client's behalf; or
(iii) activities cease to be carried out by a contractor or a subsequent contractor on a client's behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by the client on his own behalf,
and in which the conditions set out in paragraph (3) are satisfied.
(2) In this regulation "economic entity" means an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.
(3) The conditions referred to in paragraph (1)(b) are that —
(a) immediately before the service provision change —
(i) there is an organised grouping of employees situated in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client;
(ii) the client intends that the activities will, following the service provision change, be carried out by the transferee other than in connection with a single specific event or task of short-term duration; and
(b) the activities concerned do not consist wholly or mainly of the supply of goods for the client's use.
….
Effect of relevant transfer on contracts of employment
4. (1) Except where objection is made under paragraph (7), 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 grouping of resources or employees that is 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."
Rynda Capital Partners Europe LLP owns a large portfolio of properties across Europe (known as the "H20 properties") through a somewhat complicated corporate structure. The subsidiary companies which own the H20 properties in the Netherlands are known as "H20 Amsterdam" and "H20 Dutch". Other subsidiary companies own H20 properties in France, Germany, Denmark and Finland. I shall refer collectively to Rynda Capital Partners Europe Ltd and its subsidiaries as "the Rynda Group".
In May 2009 the various subsidiary companies entered into management agreements with Drivers Jonas LLP ("Driver Jonas") under which Drivers Jonas agreed to manage all the H20 properties. In relation to the Dutch properties Drivers Jonas entered into management agreements with H20 Amsterdam and H20 Dutch.
In May 2009 Drivers Jonas engaged the claimant on a six month fixed term contract to manage the H20 properties in the Netherlands. Drivers Jonas were satisfied with the standard of the claimant's work. Accordingly they offered her permanent employment at the end of the six month term.
On the 1 st October 2009 the claimant commenced employment with Drivers Jonas as an Associate, Asset and Property Management, Europe Group. In her new role the claimant continued managing the H20 properties in the Netherlands. She also took on some responsibility for managing the H20 properties in Germany. In the case of the German properties there were other staff in place who were providing management services. In the case of the Dutch properties, no-one other than the claimant carried out any management work. There was a plan to bring in someone to assist the claimant with the Dutch properties, but that plan never materialised. As a result the claimant devoted most of her working time to dealing with the Dutch properties.
In early March 2010 the claimant became ill. This was partly because of the pressure of taking on additional work in Germany, whilst receiving no assistance on the Dutch portfolio.
In late March 2010 the claimant returned to work. This was an eventful period. Drivers Jonas was preparing to merge with Deloitte LLP. The claimant discussed her position with the head of her department. It was agreed that the claimant would stop working on the German properties until there was further clarity about the merger and about what this meant for the European business. The position in late March, therefore, was that the claimant was solely responsible for managing the Dutch H20 properties.
On 1 st April 2010 the merger took place. Drivers Jonas LLP joined forces with Deloitte LLP to form a new firm known as Drivers Jonas Deloitte LLP ("DJD"). Pursuant to the provisions of TUPE the claimant's employment was transferred to DJD.
Between 1 st April 2010 and 31 st December 2010 DJD employed the claimant as Associate, Asset & Property Management, Europe Group. The claimant was responsible for managing the H20 properties in the Netherlands. The claimant had no duties other than managing such properties. No-one assisted the claimant in carrying out that work. She was in effect a one-person department operating within DJD.
One consequence of the merger was that the new firm, DJD, had no responsibility for managing the H20 properties in France and Germany. This was because in those jurisdictions there were legal restrictions upon auditors being involved in property management. Also there was staff opposition to any suggestion that DJD or its associated companies should be involved in managing the French or German properties. Accordingly, as from 1 st April 2010 there was no possibility that the claimant's role might be expanded to include the German properties.
In the autumn of 2010 DJD decided to withdraw from managing the H20 properties altogether and notified the Rynda Group of that decision. The Rynda Group decided that one of its subsidiary companies, namely Rynda Real Estate Asset Management Ltd, should take over that function. That company has subsequently changed its name to Rynda (UK) Ltd. In order to avoid confusion I shall refer to it at all stages of the story as "REM".
The transfer of functions between DJD and REM took place at the end of 2010. As part of that transfer the claimant moved across from DJD to REM. The 31 st December 2010 was the last day of the claimant's employment with DJD. On 1 st January 2011 the claimant commenced her employment with REM as a senior asset manager. She continued to do precisely the same job as before. She managed the H20 properties in the Netherlands. The claimant was told that there was a prospect of career development over the medium term depending on her aspirations and the future success of REM. In the event that career development did not take place.
Unfortunately issues arose between the claimant and her managers. On 2 nd September 2011 REM dismissed the claimant from its employment.
The claimant was...
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