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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> CEVA FREIGHT UK Ltd v. SEAWELL LIMITED [2013] ScotCS CSIH_59 (21 June 2013)
URL: http://www.bailii.org/scot/cases/ScotCS/2013/59.html
Cite as: 2013 SLT 922, [2013] CSIH 59, [2013] ScotCS CSIH_59, 2013 GWD 24-453, [2013] IRLR 726

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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

 

Lord Eassie

Lord Brodie

Lord Wheatley

 

 

 

 

[2013] CSIH 59

XA118/12

 

OPINION OF THE COURT

delivered by LORD EASSIE

 

in the Appeal

 

by

 

CEVA FREIGHT (UK) LIMITED

Appellants;

 

against

 

SEAWELL LIMITED

Respondents:

 

_______________

 

 

Act: Truscott QC; MacRoberts LLP

Alt: Napier QC; Pinsent Masons LLP

 

21 June 2013

Introductory


[1] The appellants -"Ceva"- in this appeal under section 37(1) of the Employment Tribunals Act 1996 against a decision of the Employment Appeal Tribunal carry on business as freight forwarders and management logistics co-ordinators. The claimant before the Employment Tribunal, Mr Craig Moffat, who has not taken part in the appeal to this court, was employed by them as a logistics co-ordinator until his employment came to an end on 31 December 2009.


[2]
The background to the ending of Mr Moffat's employment with Ceva and the involvement of the present respondents - "Seawell"- in his claim for compensation arising out of the ending of his employment may be summarised as follows.


[3] In about April 2008 Seawell became a customer of the appellants, Ceva. Seawell operated various North Sea oil drilling or well platforms including the Noble Platform. In broad terms the work thereafter done by Ceva for Seawell consisted of arranging for the movement of goods and materials to their offshore platforms. Ceva would first receive and store goods and materials needed for the platforms and which had been purchased by Seawell (which Ceva described as the "inbound" part of their operation); thereafter Ceva arranged for the goods and materials required by a platform to be taken from the warehouse for shipping to the platform in question (the "outbound" operation). The provision of such services to Seawell was not peculiar to Ceva's contract with Seawell; Ceva supplied similar services to a number of other customers.


[4] Mr Moffat's working time in his employment with Ceva was wholly, or almost wholly, devoted to looking after the customer needs of Seawell, particularly as respects the supply of outbound goods to the Noble Platform. However, Mr Moffat was not the only employee engaged in providing the services which Ceva furnished to Seawell. In addition to the work done by Mr Moffat, his immediate line manager spent about 20% of his time working on the Seawell account and Ceva's general manager spent somewhere less than 10%. Moreover, two warehousemen were also engaged in the provision of services to Seawell and they spent between 20% and 30% of their time on Seawell's business.


[5] In the latter part of 2009, Seawell indicated that they intended to take the business carried out for them by Ceva back into their own management. At that point CEVA claimed that under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (S.I. 2006/246) -"the TUPE Regulations"-, Mr Moffat's employment would, as a result, be transferred to Seawell because a "service provision change" in terms of the regulations had occurred. That was refuted by Seawell. In the event, Seawell carried out their intention and the customer relationship ceased on 31 December 2009. Following that cessation Mr Moffat lost his employment with Ceva; and he was not taken on by Seawell. He therefore presented a claim to the Employment Tribunal against both Ceva and Seawell claiming that one or other of them had dismissed him unfairly. One of the central issues before the Employment Tribunal, before the Employment Appeal Tribunal, and subsequently before this court, was whether or not a "relevant transfer" in the form of a "service provision change "had taken place. The answer to that question determines which of Ceva and Seawell should meet Mr Moffat's claim for unfair dismissal. It is the question with which this appeal is concerned.

 

The legislative texts


[6] It is convenient at this stage to note the relevant provisions of the TUPE Regulations.

 

"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 -

....

(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.

...

(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."

 

The Employment Tribunal's decision


[7]
So far as relevant to this appeal, the Employment Tribunal found that Mr Moffat's employment was transferred from Ceva to Seawell by virtue of the TUPE Regulations on 31 December 2009 and made orders for him to receive compensation from Seawell accordingly.


[8] Before the Tribunal Ceva argued that Mr Moffat had devoted his entire time and energies to the Seawell account, and the management fee charged by Ceva included his salary and a percentage of the salaries of the other members of Ceva's workforce who spent some of their time assisting him. This was in the event not disputed by Seawell, and the fact that all of the work formerly done by Mr Moffat was now done by Seawell was similarly accepted by Seawell. Ceva maintained that because the claimant was employed by Ceva wholly on the Seawell account, and that account had now transferred to Seawell, it followed that in terms of regulation 3(1) of the TUPE Regulations there had been a service provision change and that Mr Moffat's employment thus transferred to Seawell in terms of regulation 4. In support of that contention, which involved the proposition that Mr Moffat was assigned to "an organised grouping of employees" which had "as its principal purpose" the carrying out of the activities concerned on behalf of the client, Ceva invoked the terms of regulation 2(1), which provides that references to an organised grouping of employees shall include a single person; that, it was argued, fitted the circumstances of the present case.


[9] In response Seawell argued that there was no effective service provision change in terms of regulation 3(1)(b)(iii) and therefore no transfer of employment. An essential condition for the occurrence of any service provision change under regulation 3(1)(b)(iii) was the existence - stipulated by regulation 3 (3)(a)(i) - of an organised grouping of employees which had as its principal purpose the carrying out of the activities concerned on behalf of the client. While in terms of regulation 2 an organised grouping of employees could include a single person, it did not follow in the circumstances of the present case that, because Mr Moffat spent all of his time on the Seawell account, he, by virtue of that circumstance, constituted such a grouping. In this case, the employees performing the duties necessary to provide the service to Seawell included workers other than Mr Moffat; he might be an important cog in the wheel, but he was not the wheel itself.


[10] In reaching its decision the Employment Tribunal first decided that the activities which had been carried out by Ceva were the same as those carried out by Seawell after the transfer. The work done by Ceva was to provide a continuous and on-going service and accordingly there was no doubt that regulation 3(1)(a)(iii) was satisfied in that following the transfer the activities would be carried out by the transferee. The real issue in the case was whether Mr Moffat could constitute, in terms of regulation 3(3)(a)(i), an organised grouping of employees whose principal purpose was the carrying out of the relevant activities.


[11] The Employment Tribunal concluded that its preference lay with Ceva's submission. It held that Mr Moffat was in charge of the activities required for the Seawell account and thus responsible for making those activities happen. It was not necessary to include within the organised grouping of employees every person who had anything to do with the activities and then analyse what proportion of their time was spent on those activities to decide whether the group as a whole had as its principal purpose the carrying out of the activities. The Employment Tribunal considered that there may be many members of a workforce who assist in the activities of an organised grouping and thereby allow those activities to happen; but to include all of these in defining the organised grouping would be erroneous. The Employment Tribunal preferred the simpler approach contended for by Ceva, namely, that given that the definition of an organised grouping of employees included a single employee (regulation 2(1)), it was only necessary to identify whether there was such an organised grouping of employees or an employee whose principal purpose was to carry out the activities. On that assumption, the Tribunal found that Mr Moffat, albeit a single person, constituted an organised grouping which had as its principal purpose the carrying out of the activities.


[12] The Employment Tribunal also reasoned alternatively that, if the managers and the warehousemen were also included in the organised grouping whose principal purpose was in carrying out those activities, since Mr Moffat was the only person who gave 100% of his time to the activities, he was the person who could properly be regarded as being "assigned" to the organised grouping in terms of the regulations. The Employment Tribunal considered that approach to be supported by the terms of regulation 4.


[13]
The Employment Tribunal therefore concluded that a service provision change in terms of regulation 3(1)(b)(iii) had taken place; that regulation 3(1)(a) was satisfied and that, by virtue of regulation 4, Mr Moffat's contract of employment had transferred to Seawell.

 

The Employment Appeal Tribunal's decision


[14] Before the Employment Appeal Tribunal Seawell argued that the Employment Tribunal had erred in two respects. First, when considering whether or not there was an organised grouping of employees, it was wrong to approach matters on the basis that it was only necessary to identify a single employee whose principal purpose was to carry out the activities in question. The fact that in terms of regulation 2(1) an organised grouping of employees could be a single person did not mean that if a single employee spent all of his time on the work of a particular client he constituted an organised grouping. Mr Moffat did not carry out the activities concerned; they were carried out by a group of employees which included him. The Employment Tribunal should have first decided whether it was possible to identify an organised grouping of employees and if they could identify such a grouping, then consider the scope of the activities carried out by that grouping. Instead the Employment Tribunal had looked at what one employee did; this was an incorrect application of the regulations. Secondly, the Employment Tribunal had failed to apply that part of the regulations which required that the activities in question be the principal purpose of the identified organised grouping of employees. The Employment Tribunal had found that the grouping of Ceva employees, including Mr Moffat, saw to it that the service provided to Seawell was effective. But that did not entail a finding that those activities were the principal purpose of the grouping. Further, the Employment Tribunal had made no specific findings on whether any of Ceva's employees had been assigned to the Seawell contract.


[15] On behalf of Ceva it was argued that the Employment Tribunal had made broad findings in fact and had applied them sensibly. It was accepted that not everyone who played a part in providing the service may be part of the grouping; some employees would play a minor rôle. The Employment Tribunal had, correctly, considered the question of who was essential to the activity and had found that the organised grouping was Mr Moffat, assisted by the warehousemen and a couple of others, but he was the person who provided the Seawell services. The Seawell contract was Mr Moffat's job and that was the essence of the service provided. In respect of the second part of Seawell's argument, the Employment Tribunal had looked at the provisions in the regulations that required that the activities be the principal purpose of the grouping; since Mr Moffat was the grouping and spent 100% of his time working on the Seawell contract it followed that the principal purpose of the grouping was those activities.


[16] The Employment Appeal Tribunal upheld the appeal. It considered that on the Employment Tribunal's findings the only deliberately organised grouping within Ceva before the transfer were groupings into the "inbound" and "outbound" parts of the company's operation. The grouping within which Mr Moffat found himself, namely, the outbound operation, could not be said to have as its principal purpose the carrying out of activities on behalf of Seawell. Only Mr Moffat spent 100% of his time on that work. Other members of the grouping spent only limited parts of their time on work for Seawell. So the outbound grouping could not satisfy the requirements of regulation 3(3)(a)(i); the grouping was not organised for the purposes of the Seawell contract, nor was the Seawell work its principal purpose.

It was not sufficient to satisfy regulation 3(3)(a)(i) that Mr Moffat spent all of his time on Seawell's work; nor was there any finding that Ceva formed a grouping consisting of Mr Moffat alone to carry out the Seawell work.


[17] Secondly, the Employment Appeal Tribunal disagreed with the Employment Tribunal's finding that because Mr Moffat did nothing other than Seawell's work, that was his principal purpose and that he could, by virtue of the interpretation provisions of regulation 2 constitute an organised grouping. Regulation 3(3)(a)(i) required that the organised grouping of employees carry out "the activities concerned", - a reference to regulation 3(1)(b)(iii). Those activities were whatever was done after the change effected by the client (Seawell) on its own behalf instead of by the contractor (Ceva). Clearly Seawell took over, as the activities concerned, all of the work that was done by Mr Moffat, the two managers and the two warehousemen, not just what was done by Mr Moffat. The Employment Appeal Tribunal accordingly found that Mr Moffat was not carrying out "the activities concerned", albeit he was part of them. The Employment Appeal Tribunal further criticised the Employment Tribunal's reasoning at paragraph 115 of its decision; the Employment Tribunal's reference to a test of "effectively ensuring that the service was provided" was wrong, because no such test was to be found in the regulations. The Employment Tribunal had no basis in fact for finding that Mr Moffat and the other members of the workforce were an organised grouping of employees within the meaning of regulation 3(3)(a)(ii). Moreover, the basis on which the Employment Tribunal had concluded that Mr Moffat was assigned to the grouping was wrong; such assignation was a question of fact, but there was no specific finding on that matter; and the fact that a particular employee happened to be doing particular work did not of itself mean that that employee was assigned to the group carrying out the work.


[18] The Employment Appeal Tribunal therefore found that the Employment Tribunal had no basis for concluding that Mr Moffat's employment had transferred to Seawell and they accordingly upheld Seawell's appeal. Against that decision Ceva have now appealed, seeking restoration of the Employment Tribunal's original decision.

 

Submissions


[19] For Ceva Mr Truscott submitted, in summary, that it was not in dispute that the activities carried out by Seawell after 1 January 2010 were the same as those carried out by Ceva prior to that date; and that accordingly a service provision change had occurred if the conditions stipulated in regulation 3 (3) were satisfied. The question which arose before the Employment Tribunal was whether those conditions were satisfied. The Employment Tribunal had rightly found that those conditions were satisfied in respect that Mr Moffat was singularly responsible within Ceva for ensuring the performance of the Seawell account and since he spent all of his time on the Seawell contract the Employment Tribunal was entitled to find that, albeit a single individual, he constituted an organised grouping.


[20] Counsel submitted that in reversing that finding the Employment Appeal Tribunal had fallen into error. Counsel maintained that central to any fact finding exercise was an examination of a document (production no 14) headed "Role and Person Profile" which had been before the Employment Tribunal; which provided a complete job description of the work done by Mr Moffat for Ceva; and which vouched both that Mr Moffat bore full responsibility for ensuring the contractual performance of his employer's engagements to Seawell and that those were his only responsibilities, excluding any involvement in services to other customers of Ceva. The Employment Appeal Tribunal had not considered this document. The description of the work done by Mr Moffat for Ceva on the Seawell contract which was detailed in that production was in effect a description of the activities transferred to Seawell; in other words it was the description of the activities required by the particular client contract and the principal purpose of the organised grouping of employees. Had the Employment Appeal Tribunal considered production 14, Mr Trustcott maintained, it would have realised that what was contained there was a description of the activities required of Ceva by Seawell, and which was what was subsequently transferred to Seawell. Reference was made to Argyll Coastal Services v Stirling & Others UKEATS/0012/11/B1 at paragraph 18.


[21] Counsel for the appellant further submitted that it was not correct to say, as the Employment Appeal Tribunal did at paragraph 17 of its judgment, that the appointment of Mr Moffat to the Seawell contract was a matter of "happenstance"; nor that there was no indication that Ceva formed a grouping consisting of Mr Moffat to carry out the Seawell work (paragraph 43 and also paragraph 47). The circumstances found by the Employment Tribunal and particularly production 14 made it abundantly clear that such was not the case. Mr Moffat was plainly and deliberately assigned to be engaged solely on the Seawell work. That there were others also working on the Seawell account did not mean that an organised grouping consisting of Mr Moffat could not exist.


[22] Counsel for the appellant advanced further criticisms of the reasoning of the Employment Appeal Tribunal. In paragraph 41 of its judgment the conclusion was reached that the grouping of employees involved in the outbound element of the Seawell contract could not satisfy the requirements of regulation 3(3)(i) because, although it was deliberately organised as a grouping, there was no finding by the Employment Tribunal that it was organised for the purposes of the Seawell contract, or that the Seawell work was its principal purpose. Counsel argued that this approach was wrong. Paragraph 30 of the Employment Tribunal's findings clearly established that Mr Moffat's work was organised for the purposes of the Seawell contract and it was indeed his exclusive role. So it was also wrong for the Employment Appeal Tribunal to conclude in paragraph 41 that it was not sufficient for the purposes of regulation 3(3)(a)(i) that Mr Moffat spent all of his time on the Seawell contract. That conclusion ignored the allocation of work described in production 14 and paragraph 30 of the Employment Tribunal's judgment. It was also wrong for the Employment Appeal Tribunal to conclude that the activities taken over by Seawell were not the activities carried out by Mr Moffat on the ground that Mr Moffat's contribution comprised only part of those activities. It was clear that Mr Moffat was in effect responsible for the activities. His role was pivotal, as the Employment Tribunal had found. The principal purpose of the organised grouping was defined by the nature of the activities, the grouping of employees who provided a service for the client and what they do. So, submitted counsel, Mr Moffat was the organised grouping, and if it was necessary to define the purpose of the grouping, that was simply done by reference to what he did for the client, as the Employment Tribunal found. Because the Employment Appeal Tribunal had not considered important factual material such as production 14 and the clear findings by the Employment Tribunal, its conclusions could not be justified. In the course of his submissions counsel for the appellant sought to vouch his general argument by reference also to Hunter v McCarrick [2013] IRLR 26; Eddie Stobbart Ltd v Moreman & Others [2012] ICR 919; Mowlem Technical Services (Scotland) Ltd v King 2005 1 SC 514 and Edinburgh Home-Link Partnership & Others v The City of Edinburgh Council & Others [2012] UKEATS/0061/11/BI.


[23] For the respondents, Mr Napier did not disagree that production 14 was Mr Moffat's job description, but that did not affect his argument. The appeal was concerned with matters of statutory construction. While a purposive construction of the TUPE regulations as having the protection of the employee in focus might be appropriate in some cases, that approach to interpretation of the regulations did not apply in the present appeal, the issue in the appeal being which of the original employer or the potential transferee employer was responsible. A straightforward, commonsense interpretation of the regulations was clearly appropriate. The first question which had to be addressed was the requirement for an "organised grouping" of employees. A service provision change would normally involve several employees who had been selected to work on the contract in question. So an organised grouping consisting of a single employee would be the exception, rather than the rule. While the existence of an organised grouping was ultimately a question of fact, the ascertainment of such a factual finding required to be informed by a proper understanding of the relevant law (the TUPE Regulations).


[24]
The identification of the relevant activities was the first step (Kimberley Group Housing v Hambley & Others (UK) Ltd [2008] 1 CR 1030). At paragraph 103 of its judgment he Employment Tribunal correctly identified those as being the activities taken over by Seawell from Ceva. Having identified the relevant activities, one next required to consider whether there was an organised grouping of employees and, importantly, which employees were comprised in the grouping. The notion of "principal purpose" was tied to the organised group of employees (see regulation 3(3)(a)(i)). It was of note that in the regulations the principal purpose was related not to the activities but to the carrying out of those activities. The activities required by the contract with Seawell were carried out not just by Mr Moffat but also by others; he was one of a number of employees who together fulfilled the purpose of carrying out the transferred activities, the contribution of the others being material and necessary. While a team might incidentally draw upon the resources and assistance of others in the undertaking, splitting up the constituents of a section of a workforce which collectively carried out the transferred activities was not consistent with an ordinary reading of the regulations. It was essential to know who constituted the organised grouping, firstly, in order to ascertain whether its principal purpose was the carrying out of the activities being transferred and secondly because, in terms of regulation 4, an employee's contract of employment was transferred only if he was assigned to the organised grouping. It was not enough to find that a number of individuals worked together in providing the service in question. There required to be an element of organisation or putting together as a team. This could be express or implicit (Eddie Stobbart Ltd v Moreman & Others at paragraph 18).


[25] The real dispute between the parties was whether the group providing the services to Seawell was wider than Mr Moffat. Seawell submitted that those providing the services included the other identified members of the workforce who helped to deliver the service. Mr Moffat may have been a lynchpin but he was not the whole story. This was borne out by the Employment Tribunal's findings at paragraph 33 of its judgment - the fee for the service provided include not just Mr Moffat's salary but a proportion of other costs and salaries as well. There was no finding that the employees who together provided the services to Seawell were organised as a grouping or team whose principal purpose was the provision of services to that customer.


[26] The provision in regulation 2(1) to the effect that an organised grouping might include a single employee was, submitted counsel, intended to cover the situation in which the whole service to the customer was provided by a single employee whose principal purpose was to provide that service to that customer. But it certainly did not follow that because one could point to a single employee working full time on a project to which other employees also contributed their efforts, the single employee could be isolated from the rest and said to constitute an organised grouping.


[27]
It was clear from the regulations that it was not enough that there be identified a grouping which provided the activities in question. The provision of those activities had to be the principal purpose of the grouping. The approach of the Employment Tribunal (at paragraph 113) of viewing what Mr Moffat did, and his primary purpose, was erroneous. The primary purpose of Mr Moffat's work was no doubt to contribute to the provision of the services to Seawell, but it was only a contribution towards the provision of the activity - not the provision itself of the activity. It was not possible to maintain that all of the employees who contributed to make the service effective had their employment transferred to Seawell. As respects the Employment Tribunal's alternative approach, the finding in paragraph 27 of the Employment Tribunal's judgment respecting the internal division into inbound and outbound operation was not found by the tribunal to be an organised grouping; nor such a grouping which had as its primary purpose the provision of the Seawell activities. Moreover, it was wrong to say that because Mr Moffat spent 100% of his time on the Seawell contract it followed that he - and he alone- had been assigned to that contract (cf Edinburgh Home-Link Partnership & Others v The City of Edinburgh Council and Others at paragraph 19 and the cases therein cited). Accordingly the Employment Appeal Tribunal correctly addressed the proper tests as to whether 3(3) should apply and the present appeal should be refused.

 

Discussion


[28] In the present case it is not in dispute that in December 2009 a "service provision change" of the variety described in subparagraph (iii) of paragraph (1) of regulation 3 of the TUPE regulations occurred when the contractual arrangement between Ceva and Seawell came to an end and the logistics activities provided by Ceva were taken on by Seawell itself. However, by reason of the concluding words of paragraph (1) of regulation 3, a service provision change may only constitute a "relevant transfer" if the conditions set out in paragraph (3) of that regulation are satisfied. The condition of materiality in this appeal is, of course, that set out in paragraph (3) (a) (i), the terms of which, for convenience, we repeat:

"(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;"

 

 


[29] In our opinion, and echoing views expressed in some of the tribunal decisions to which we were referred, in considering whether this condition may be satisfied in a particular case an appropriate starting point will be the "activities". The term "activities" is, of course, also used in paragraph (1) of regulation 3 as a central element in defining a service provision change. In that context it is in our view evident that it refers to the prestations by way of service or services which (in the variety of service provision change in the present case) required to be provided by the contractor in terms of his contractual arrangements with the client and which, following the cessation of those arrangements, are then performed by the client himself on his own behalf. In the present case the extent of those service prestations are not controversial. They are set out by the Employment Tribunal and are summarised by us in paragraph [3] supra. It is also not in dispute that after December 2009 those activities were performed by Seawell on its own account.


[30] Having thus identified the scope and nature of the activities, the focus must then pass to the manner in which the contractor has arranged for the performance of the service prestations, or, perhaps more technically, reflecting the wording of the regulations, how the activities are "carried out". Plainly, in very many cases the employees engaged in providing the services to the client who (in the present variety of service provision change) takes the services "in house" will also be providing services to other clients or customers. The extent to which their working time is devoted to the client will vary greatly. Accordingly, for obvious reasons, the notion that there be a transfer of their contracts of employment would be vested with much uncertainty. Hence one finds the requirement in paragraph (3)(a)(i) of regulation 3 that there be an "an organised grouping of employees" having as its "principal purpose" the carrying out of the activities in question. The requirement is necessary in order to give practical definition - or to set discernible parameters - to the important event, from the perspectives of each of the contractor, the client (the potential transferee) and the employee, of a transfer of the contract of employment.


[31]
Having regard to that consideration we agree with the view expressed by the Employment Appeal Tribunal at paragraph 18 of its judgment in Eddie Stobart Ltd v Moreman that the concept of an organised grouping implies that there be an element of conscious organisation by the employer of his employees into a grouping - of the nature of a "team" - which has as its principal purpose the carrying out de facto of the activities in issue.


[32]
It is plain from the factual findings of the Employment Tribunal in casu that the carrying out of the activities provided to Seawell involved the participation of a number employees other than Mr Moffat, in his co-ordinating or supervisory role. Nor was the carrying out of those activities for Seawell confined to the internal division of "outbound" operations since "inbound" operations were also essential to the whole contractual performance. But it cannot be said - and indeed it is not contended- that the employees engaged in the practical tasks involved in both those operations were organised as a grouping having as its principal purpose the carrying out of the activities to be performed for Seawell, since they did similar tasks for other clients or customers and Seawell was but one of them.


[33] It appears to us to follow from the structure and wording of the regulations that where the activities are carried out by the collaboration, to varying degrees, of a number of employees who are not organised as a grouping having as their principal purpose the carrying out of the activities for the client, it is not legitimate to isolate one of that number on the basis that the employee in question devoted all, or virtually all, of his or her working time to assisting in the collaborative effort. Counsel for Ceva invoked the document describing Mr Moffat's "Role and Personal Profile" as a matter to which the Employment Appeal Tribunal had paid too little regard. While the job description contained in that document indicates that Mr Moffat was employed for the purpose of enabling the contract with Seawell to be performed, we do not consider that the fact of his being so employed relevantly distinguishes him from an employee who, as one of a number engaged in carrying out the activities, de facto devotes all, or virtually all, of his or her working time to contributing to the carrying out of the activities.


[34] The Employment Tribunal, and counsel for Ceva, sought support for their approach of treating Mr Moffat as an organised grouping in the fact that an organised grouping is defined in regulation 2 as including a single employee. However, as counsel for Seawell pointed out, it is not difficult to envisage cases in which the activities in question can be, and are, carried out by a single individual. For example, the needs of a client of a cleaning firm may be for a single cleaner; or a firm of solicitors may undertake to provide a single qualified solicitor to advise full time a client such as an insurance claims handler. In our opinion counsel for Seawell was correct in his submission that the inclusion of a single employee in the definition of an organised grouping was directed to that sort of case. But where the activities are carried out by a plurality of employees, the reference in the definition to a single employee does not, in our view, warrant disaggregation of that group of employees.


[35] In these circumstances we conclude that the decision of the Employment Tribunal proceeded upon an error of law and that the Employment Appeal Tribunal was correct to reverse that decision. We accordingly refuse this appeal and uphold the decision of the Employment Appeal Tribunal.

 

 


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