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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Monitus Ltd v Woodman & Anor [2005] UKEAT 0354_05_2112 (21 December 2005) URL: https://www.bailii.org/uk/cases/UKEAT/2005/0354_05_2112.html Cite as: [2005] UKEAT 0354_05_2112, [2005] UKEAT 354_5_2112 |
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On 15 September 2005 | |
Before
HIS HONOUR JUDGE PUGSLEY
MR M SINGH
MISS S M WILSON CBE
APPELLANT | |
(2) SANDFIELD SYSTEMS LTD |
RESPONDENTS |
Transcript of Proceedings
JUDGMENT
For ![]() ![]() |
MS A HEWITT (Of Counsel) Instructed by: Messrs B D Laddie Solicitors Dean Bradley House 46 Horseferry Road Westminster London SW1P 2AP |
For ![]() ![]() |
MISS CLAIRE PALMER (Of Counsel) Instructed by: Dechert LLP Solicitors 160 Queen Victoria Street London EC4V 4QQ |
Second Respondent | Debarred from proceedings |
SUMMARY
.The
Appellant's grounds of appeal are based on perversity and an error of law in
the
construction of
the
TUPE
regulations
.
HIS HONOUR JUDGE PUGSLEY
"7The
Tribunal makes
the
following findings of fact:
7.1The
1st and 2nd Respondents are involved in
the
tax avoidance industry.
The
1st Respondent operates tax avoidance schemes principally for those working and resident outside
the
UK.
The
1st Respondent has traded since 1998. Part of its
services
included completing tax returns and performing associated work for clients. Prior to 2003/4 these tax
services
were carried out for
the
18 Respondent's clients by a firm of chartered accountants called Jayson Newman. This accountancy practice was taken over by Numerica.
The
tax work was performed by
the
Claimant who was supervised by Mr Barnett, a partner in Jayson Newman and latterly at
the
equivalent status but employed by Numerica following
the
take-over.
7.2 Forthe
tax year 2003/4
the
1st Respondent decided to undertake its tax
services
inhouse. This work was actually performed by
the
Claimant who
the
1st Respondent 'poached' nom Numerica.
The
Claimant does not possess formal professional accountancy qualifications but previously worked for
the
Inland Revenue and brought this experience into
the
tax avoidance industry for
the
benefit of
the
1st Respondent.
7.3 On 1st April 2003the
Claimant commenced her employment with
the
1st Respondent. It operated at that time, 2 tax avoidance schemes requiring work by
the
Claimant. One was called
the
Partnership Scheme and
the
other
the
Employment Benefits Scheme. Initially
the
Claimant was more involved in
the
Partnership Scheme than
the
EBS scheme, which involved registering
the
members of
the
Partnership Scheme with
the
Inland. Revenue and also registering Consulting Overseas Limited ("CO"), as tax agent for
the
1st Respondent.
The
EBS scheme involved less tax work than
the
Partnership Scheme .
7.4 Duringthe
following year there was a diminution in
the
work of
the
Partnership Scheme with clients reducing from about 150 to 50.
7.5 As a resu1t of changes inthe
law to nullify its benefits
the
1st Respondent decided to terminate
the
EBB Scheme in February
2004
. It is this fact which
the
1st Respondent contends led to
the
Claimant's redundancy.
7.6The
1st Respondent did not have professional indemnity insurance for accountancy work which included
the
tax work performed by
the
Claimant. Such work was specifically excluded from
the
1st Respondent's insurance cover. Mr Bishop says it was during 2003/4 that his lack of Cover was pointed out to him by his insurance brokers and when this happened he became concerned about what he perceived to be uninsured exposure.
The
confirmation of cover is dated 24th July 2003.
The
1st Respondent took no steps immediately to terminate
the
tax. preparation work but decided it would do so, 9 months later, in April
2004
at
the
end of
the
fiscal year. It decided to arrange for this work to be performed thereafter by
the
2nd Respondent as it was able to obtain professional indemnity cover.
7.7The
1st Respondent and CO, its tax agent, ""ere clients of Mr Barnett when at Jayson Newman and again after it was taken over by Numerica. He supervised
the
tax returns prepared for clients of both companies as wel1 as providing other accountancy advice.
The
Claimant worked under him and at his direction. Mr Barnett facilitated
the
Claimant's transfer to
the
1st Respondent. He induced
the
Claimant to write an email to him claiming falsely that she had been approached directly by
the
1st Respondent to work for them so as to n1islead
the
directors of Numerica so they would not think her leaving had been facilitated by Mr Barnett. Mr Barnett himself left Numerica on 16&11 May 2003 and
the
2nd Respondent commenced trading 3 days later on 19th May 2003.
7.8The
Tribunal accepts
the
evidence of
the
Claimant that tax associated work tends to increase in volume during
the
autumn and reaches it height by
the
end of January,
the
final date for submission of tax returns without penalty. It then goes t1noough a period of lull until mid summer/autumn when it begins to pick up again. There is therefore nothing unusual in someone whose main employment is
the
preparation of tax returns to find themselves working long hours in
the
height of
the
busy period without extra pay but this is compensated for by reduced hours of work in
the
spring and early summer
7.9The
Claimant accepted there was a reduction in
the
number of clients in
the
partnership scheme and that
the
EBS scheme was planned to terminate in April
2004
.
The
Tribunal accepts her evidence that although
the
2 schemes were reducing/terminating this did not mean her work on them would cease or even substantially reduce. She was required to prepare a number of tax returns for those in
the
final year of
the
scheme and for those who left
the
scheme part way through
the
final year.
The
Actinium Scheme was due to commence in Apri1
2004
and there would have been substantial work for
the
Claimant to do in setting this up and having it ready to run at
the
commencement of
the 2004
/5 fiscal year.
7.10The
Actinium scheme enabled
the
1st Respondent to cater for those clients who could not remain on
the
Partnership Scheme after comp1eting a maximum of 3 years and also for those on
the
EBS scheme which was becoming obsolete.
The
1st Respondent planned to move its clients onto
the
Actinium Scheme which in fact it did in March
2004
.
The
Actinium scheme involved more tax work than its predecessor, due to its structure and would therefore have increased
the
work to be performed by
the
Claimant.
7.11The
office arrangements of
the
Respondents are complicated and lack transparency.
The
1st Respondent holds
the
lease of
the
premises which it is not permitted to sublet. A number of businesses operate from
the
same premises. These include
the
1st Respondent and CO run by Mr Bishopp together with
the
2nd Respondent run by Mr Barnett. There are 6 other companies operating from
the
premises, 2 of which are property companies jointly owned by Messrs Bishopp and Barnett. There is 1 lift to
the
premises. 1 room is shared by 3 solicitors employed by
the
1st Respondent. Mr Barnett; as
the
2nd Respondent, occupies a room on
the
same corridor. He accepts he has no legal right to be there and does not pay rent.
The
1st and 2nd Respondents share a photocopier, fax machine and filing area. They also share a receptionist, who does typing for both. Both have their own computers which share a common server. Mr Barnett, when operating a computer of
the
2nd Respondent, is able to access information on
the
computer system of
the
1st Respondent.
7.12The
2nd Respondent has clients other than
the
1st. Respondent, but
the
1st Respondent is its major source of income. In May
2004
,
the
1st Respondent represented about 80% of
the
2nd Respondent's income estimated for
the
current year to be in
the
region of £200,000.
The
tax work is about £40,000 of that sum. This work is for clients of
the
1st Respondent who are unaware it is performed by
the
2nd Respondent. It is performed on a sub contract basis from
the
1st Respondent.
The
only person dealing with this type of tax work at
the
1st Respondent was
the
Claimant.
7.13 Following dismissal ofthe
C1a,imant
the
~ Respondent advertised for and engaged a chartered accountant (Leo Duffy) to perform
the
tax work previously undertaken by
the
Claimant together with additiona1 accountancy work.
The
2nd Respondent charges
the
1st Respondent for Mr Duffy's work and
the
2nd Respondent pays approximately £2,000 per month to
the
1st Respondent as a contribution to office expenses. Mr Barnett is working on devising a new tax avoidance scheme which he intends will be marketed by
the
1st Respondent. Although
the
terms upon which this will be done have not yet been decided, as they will depend upon
the
efficacy and commercial va1ue of
the
new scheme, there is a tacit understanding between Mr Barnett and Mr Bishopp that they will share
the
profits to be generated and this factor is taken into account in
the
payment made by
the
2nd Respondent to
the
1st Respondent for its share of office expenses.
7.14The
Claimant is a single mother and agreed with Mr Bishopp that she could work for
the
1st Respondent Principally from home attending
the
offices of
the
1st Respondent once a week on Wednesdays.
7.15 Atthe
time of leaving Numerica
the
C1aimant was invited by Mr Barnett to undertake some private tax work for him . She checked with Neil Dunlop, her line manager at
the
1st Respondent, who gave approval. Over
the
next year
the
Claimant kept a detailed note of time spent on this private work and in early
2004
rendered Mr Barnett an invoice. It was for 53½ hrs for which she expected to be paid £15 per hour producing a total of £802.50. Mr Barnett's response was to decline to pay
the
bill and said
the
work undertaken was "work for
the
organisation" for which
the
Claimant had already been paid.
The
Claimant worked only for
the
1st Respondent from which
the
Tribunal infers that Mr Barnett regarded work done for him to be related to or collected with work done for
the
1st Respondent.
7.16 On 10th March2004 the
Claimant attended
the
1st Respondent's offices to collect
the
post. Mr Bishopp came to her room and said he wanted to speak to her at 1pm in his office but did not tell her why. She attended as requested and was re-directed to Mr Barnett's room where she was met by both Messrs Bishopp and Barnett.
7 .17The
Claimant felt uncomfortable being confronted by both Messrs Bishopp and Barnett. Mr Bishopp did most of
the
speaking to begin with and appeared to be uncomfortable. Mr Barnett just stared at
the
Claimant until Mr Bishopp left to get some papers. Mr Bishopp said to
the
Claimant "we need to part company" and gave an explanation involving problems with insurance cover and regulatory problems, but without defining them. Mr Bishopp said
the
tax
services
provided by
the
Claimant were going to be performed in
the
future by an accountant mend of his "in
the
North" but when be was out of
the
room this was contradicted by Mr Barnett who said
the
work would be performed by
the
2nd Respondent by an accountant he intended to employ.
7.18 Prior to commencement ofthe
meeting neither
the
1st nor 2nd Respondent informed
the
C1aimant of
the
nature of
the
meeting and she was not invited to be accompanied. There was no mention or alternative employment with
the
1st Respondent or by
the
2nd Respondent, nor was there any suggestion that she might perform work in
the
office rather than at home or have her hours reduced during a temporary lull in work.
7.19 There was no consultation withthe
C1aDnant and she not invited to give her views about any of
the
matters discussed. It was clear from
the
way
the
meeting was conducted that
the
decision to dismiss her had already been taken prior to
the
meeting commencing and did not arise as a result of
the
meeting.
7.20The
Claimant was shocked and left
the
meeting, She telephoned her line manager, Mr Dunlop, to ask if he knew what was happening. He told
the
Claimant he was aware of an undercurrent against her partially because she worked from home and also because there appeared to be some unspecified conflict with Mr Barnett.
The
Claimant contended that her relationship with Mr Barnett changed, when she submitted her account in early
2004
and never recovered thereafter.
7.21 On returning to her homethe
Claimant looked at
the
website for Hays Personnel Recruitment and discovered an advert which she regarded as advertising her position.
The
salary location and benefits were virtually identical to those she enjoyed.
The
copy advert (176) discloses that it was posted on
the
website that same day on 10th March by
the
2nd Respondent.
The
advert seeks a "Personal Tax Professional" and makes no reference to seeking a qualified accountant. It is expressed to be "ideal for a PA to Partner level candidate " i.e. someone at
the
Claimant's level
7.22 This advert was later withdrawn bythe
2nd Respondent who also withdrew its instructions to Hays. A subsequent advert was prepared and is referred to in an email from a different recruitment agency, dated 7th June
2004
. This sought a qualified accountant and led to
the
2nd Respondent employing Mr Duffy.
7.23 Mr Barnett agreed in x-exam thatthe
room formerly occupied by
the
Claimant is now occupied by Mr Duffy. Mr Barnett admitted he has been closely involved with
the
1st Respondent since its inception and designed many of its systems and procedures. He also accepted
the
Claimant's role preparing tax returns and associated work still exists although he claims it has diminished. It is now performed by
the
2nd Respondent's employee Duffy who performs some accountancy work in addition to
the
tax work.
The
2nd Respondent is able to obtain and has professional indemnity insurance covering tax work which is part of normal accountancy work and therefore has always been available to it because Mr Barnett is a chartered accountant.
7.24 By letter dated 17th March2004
Mr Bishopp wrote to
the
Claimant giving her 2 months notice expiring on 12th May
2004
. No reason for her dismissal is given in
the
letter.
The
1st Respondent requested
the
Claimant to liaise with Mr Barnett (of
the
2nd Respondent) in
the
handover of her work.
7.25 A further meeting was arranged between Messrs Bishopp and Barnett withthe
Claimant for
the
2nd April. This meeting proved difficu1t for
the
Claimant. Mr Bishopp wanted
the
Claimant to work her notice but it was decided it would be better if she did not and her employment was terminated immediately with
the
Claimant being paid wages in lieu of notice.
7.26 On leavingthe
building
the
Claimant left a letter for Mr Bishopp at
the
reception desk, dated 2nd April [179]. This asked for reasons for her dismissal. It was responded to by Mr Bishopp in his letter of 15th April [186] in which he asserts
the
Claimant was redundant due to reduction of clients from 150 to 50. He also referred to regulatory changes requiring
the
person undertaking
the
Claimants position to have qualifications which
the
Claimant does not possess. He also referred to
the
1st Respondent's lack of professional indemnity insurance. Mr Bishopp does not specify
the
regulatory changes referred to or
the
qualification required.
7.27 No evidence was adduced of any regulatory changes occurring during 2003/4 which would have required someone performingthe
Claimant's duties to have professional qualifications. Evidence was adduced of
the
1st Respondent's insurance brokers saying they were unable to obtain professional indemnity cover for
the
tax work conducted by
the
1st Respondent but there was no evidence of other enquiries being made in
the
insurance market generally or by other brokers.
The
lack of insurance cover did not cause
the
1st Respondent immediately to terminate its tax work.
8.The
Tribunal had cited to it
the
following authorities:
- Iceland Frozen Foods v Jones [1983] ICR 17
- Whitbread plc v Hall (2001] ICR 699
- Mugford v Midland Bank Plc [1997] ICR 399
- Clarkson International Tools Ltd v Short (1973J ICR 191
- James W Cook & Co v Tipper [1990J ICR 716
- Polkey v Dayton
Services
Ltd [1988] ICR 142
- Mining Supplies Ltd v Baker [1988] ICR 676
- Whitewater Leisure Management Ltd v Barnes [2000] ICR 1049
- BSG property
Services
v Tuck [1996] IRLR 134
9.The
Tribunal unanimously reaches
the
following conclusions:
9.1The
Tribunal reminds itself that pursuant to s.98 of
the
Employment Rights Act 1996 it is for an employer to show
the
reason, or principal reason, if more than one, for dismissa1and that it is a potentia11y fair reason.
9.2 In this casethe
Respondents do not dispute that
the
Claimant was dismissed by
the
1st Respondent and therefore it is for her employer to show
the
reason for dismissal.
The
1st Respondent contends it dismissed
the
Claimant on
the
basis of redundancy and/or some other substantial reason ("SOSR") namely
the
lack of insurance cover.
9.3The
Tribunal accepts that during 2003/4 Mr Bishopp realised
the
1st Respondent did not have professional indemnity insurance to cover
the
preparation of tax returns and he did not want
the
1st Respondent to be exposed after April
2004
. This was a commercial decision
the
1st Respondent was entitled to make. However, it was content to wait until
the
end of
the
fiscal year and did not make other enquiries to see if appropriate cover could be obtained.
9.4The
1st Respondent decided therefore to transfer that work to
the
2nd Respondent as from Apri12004.
The
only employee engaged by
the
1st Respondent performing this work was
the
Claimant.
9.5The
decision to dismiss
the
Claimant was taken on or before 10th March and was communicated to her on that date at a meeting attended by both Messrs Bishopp and Barnett.
9.6The
practical (as distinct from legal) boundaries between
the
1st and 2nd Respondent are extremely blurred and ill defined. This is clear from
the
way they share office space, equipment, staff, computer systems and data bases and contemplate sharing profits in a new scheme to be developed by Mr Barnett. If they were operated as separate and distinct entities Mr Barnett would not have been present at
the
Claimant's dismissal and more particularly would not have been referred to in
the
letter of dismissal as
the
person to whom
the
Claimant should hand over her current work.
The
meeting also would not have taken place in Mr Barnett's office.
9.7 What is clear is thatthe
preparation of tax returns for clients of
the
1st Respondent (which includes Actinium in
the
future) was performed prior to
the
Claimant's dismissal by her, employed by
the
1st Respondent and after her dismissal this work was transferred to
the
2nd Respondent and was thereafter performed by Mr Duffy, once he was recruited. This work was an essential part of
the
business conducted by
the
1st Respondent and remains so.
9.8The
Tribunal has taken into consideration
the
principles set out in Whitewater Leisure which says when considering whether a TUPE transfer has occurred there are 2 questions to be considered namely whether there was an identifiable business entity constituting an undertaking, and if so whether there had been a relevant transfer of that undertaking; that in relation to
the
first question
the
entity had to be identifiable as a stable and discrete economic entity, sufficiently structured and autonomous, but not necessarily having assets and in relation to
the
second question, relevant factors were similarity of activity before and after transfer, a transfer of assets or a brand name or goodwill or a licence to use equipment or assets and whether
the
majority of employees or
the
significant employees in terms of skill had been engaged by
the
transferee and if appropriate why certain employees were not taken on by
the
transferee.
9.9 In applying these teststhe
Tribuma1 is satisfied that an identifiable business entity within
the
1st Respondent existed prior to
the
transfer, namely one devoted to
the
preparation of tax returns and associated tax work. It was stable in that it was a permanent and necessary part of
the service
provided by
the
1st Respondent for its clients and was transferred to
the
2nd Respondent.
The
activities of
the
1st and 2nd Respondents, with regard to these functions, were
the
same both before and after transfer. Much of
the
same office equipment was used both before and after transfer and only 1 employee was used in both
the
1st and 2nd Respondents.
The
skills required to undertake this work are
the
same.
9.10The
Tribunal is satisfied that there was a transfer of part of
the
1st Respondent's business entity to
the
2nd Respondent and it was a transfer to which TUPE applies. It is also satisfied that
the
C1aimant's dismissal was connected with
the
transfer which is
the
principal reason for her dismissal.
9.11The
2nd Respondent contends there was an ETO reason for dismissing
the
Claimant.
The
200 Respondent contends it did not accept transfer of
the
Claimant because it wanted to engage a qualified accountant rather than use an unqualified person like
the
Claimant.
The
Tribunal finds it was not necessary for
the
2nd Respondent to engage a qualified person to perform
the
work undertaken by
the
Claimant. This is reinforced by
the
advert made on behalf of
the
2nd Respondent on 10th March, being
the
date when
the
Claimant was informed of her dismissal. This clearly refers to a non qualified person and
the
Tribunal rejects
the
evidence of Mr Barnett that
the
initial advertisement was a mistake.
The
advert, in its nature and timing, is entirely consistent with tile fact of
the
Claimant's dismissal which had been decided by Messrs Barnett and Bishopp prior to
the
meeting with
the
Claimant on 10th March. It had already been agreed between them that
the
tax work would be transferred to
the
2nd Respondent and
the
2nd Respondent needed to recruit someone quickly to take over this work. This is implicit from
the
letter to
the
Claimant from Mr Bishopp dated 17th March asking
the
Claimant to liaise with Mr Barnett over her unfinished work.
The
Tribunal concludes
the
withdrawal of this advert and its replacement by
the
later advert was contrived by Mr Barnett to cover his tracks once he realised these proceedings were likely to occur.
9.12The
Tribunal therefore concludes there was no ETO reason on
the
2nd Respondent entailing changes in its workforce being
the
reason or principal reason for
the
Claimant's dismissal.
9.13The
Tribunal concludes
the
dismissal of
the
Claimant was in any event procedurally unfair. She was given no prior notice of
the
meeting which took place on 10th March. She was given no opportunity to be accompanied and to be confronted by Messrs Bishopp and Barnett was oppressive. No consultation took place and
the
views of
the
Claimant were not sought. No alternatives were considered such as
the
Claimant working at
the
office or doing shorter hours and it is clear
the
decision to dismiss her had already been taken. No proper reason was given to
the
Claimant until later when she asked for reasons. She was also left feeling uncertain about
the
effective date of her termination.
9.14 By operation ofregulation
5(2)(b) of TUPE, liability for
the
Claimant's unfair dismissal by
the
1st Respondent lies with
the
2nd Respondent and
the
Tribunal therefore finds that 2nd Respondent is responsible for
the
Claimant's unfair dismissal by
the
1st Respondent.
9.15 By way of summary,the
Tribunal asks itself what was
the
reason, or if more than one,
the
principal reason for
the
Claimant's dismissal. TheTribunal concludes there may have been more than one reason leading to
the
decision but
the
principal reason was because
the
1st Respondent decided to transfer its tax associated work to
the
2nd Respondent and
the
2nd Respondent decided it did not want to employ
the
Claimant. Her dismissal was therefore for a reason connected with
the
transfer.
9.16The
insurance issue caused
the
1st Respondent to transfer
the
tax function to
the
2nd Respondent but did not directly cause it to dismiss
the
Claimant. It is not clear from
the
evidence exactly when Mr Bishopp discovered
the
1st Respondent was exposed to risk but whenever it was there is no evidence that he acted quickly as a result of that discovery to dismiss
the
Claimant.
9.17 Having madethe
decision to transfer
the
tax function to
the
2nd Respondent
the
Tribunal accepts a redundancy situation would have arisen within
the
1st Respondent as it then no longer required or expected to require, in April 200, an employee to perform
the
Claimant's function. However, this redundancy situation arose or was created as a consequence of
the
decision to transfer
the
tax function to
the
2nd Respondent. It was therefore not
the
sole or principal reason for
the
dismissal but at best could have been a secondary or consequential reason.
9.18 This is confirmed by Mr Bishopp in his written statement which disc1oses thatthe
exposure was discovered during
the
2003/4 year when it was pointed out to him by his brokers. He says
the
1st Respondent "took
the
decision to stop providing Tax Return
services
at
the
end of
the financial
year 2003/
2004
and to sub-contract such little Tax Return work as remained to Monitus Ltd. All of
the
Applicant's job duties ceased or were expected to cease by March
2004
or thereabouts and there was no longer a need for an employee to carry out her role". He does not assert that
the
lack of insurance cover caused him to dismiss
the
Claimant but admits it caused him to transfer
the
function performed by her to
the
2nd Respondent which reinforces
the
Tribunal's conclusion.
9.19The
Claimant previously worked for and under
the
direction of Mr Barnett when they were together at Numerica. No criticism has been made of
the
C1aimant's ability or performance.
The
function performed by
the
Claimant was transferred from
the
1st to
the
2nd Respondent.
The
decision not to transfer
the
Claimant with her function was made prior to
the
transfer being made but in contemplation of
the
transfer.
The
Tribunal asks why
the
Claimant simply did not transfer with her function.
The
only reason advanced is because Mr Barnett decided he wished to avail himself of
the
opportunity to replace
the
Claimant with a qualified accountant who would be able to perform work in addition to that performed by
the
Claimant.
The
Tribunal rejects this explanation for
the
reasons already set out. It concludes
the
advertisement with Hays Personnel Selection was for
the
Claimant's position and was authorised by Mr Barnett and placed on
the
same day as
the
Claimant was informed of her dismissal and was intended to find a replacement for her as soon as possible.
The
Tribunal infers that for some undisclosed or unidentified reason Mr Barnett decided he did not want to employ
the
Claimant once
the
2nd Respondent took over
the
tax work.
The
actual reason for not wanting her to transfer lo
the
2nd Respondent with her function is unimportant to
the
Tribunal's decision. Firstly, it is for
the
employer to establish
the
reason for dismissal and Mr Barnett not only has not done so but
the
2nd Respondent was never
the
Claimant's employer.
9.20The
Tribunal firstly rejects
the
contention there was an ETO reason leading to
the
Claimant's dismissal. There was no requirement or necessity to have a qualified accountant undertake
the
work performed by
the
Claimant and therefore a decision to employ a qualified accountant in pace of
the
Claimant would not be a reason "entailing" a change in
the
2nd Respondent's workforce, Secondly,
the
Tribunal rejects this explanation by Mr Barnett which is inconsistent with
the
advertisement placed by him on
the
very day
the
Claimant was informed of her dismissal seeking a replacement for her by someone of equivalent unqualified status. Thirdly, even if
the
Tribunal were wrong in concluding there was no valid ETO reason
the
Claimant's dismissal fails to satisfy
the
requisite reasonableness test pursuant now to s.98(4) of
the
Employment Rights Act 1996, both procedurally and substantively."
(i)the
Employment, Tribunal erred in law in that it made a number of findings of fact for which there was no evidence and/or which were perverse in view of
the
evidence.
The
Appellant will rely upon
the
following as being
the
principal and substantial errors:
(a.) In relation tothe
Respondent's employment by Sandfield Systems Limited ("Sandfield"),
the
Tribunal found at paragraph 7.7 that Mr. Barnett of
the
Appellant "…facilitated
the
Claimant's" transfer to
the
1st Respondent. He induced
the
Claimant to write an email to
the
1st Respondent to him claiming falsely that she had been approached directly by
the
1st Respondent to work for them so as to mislead the6 directors of Numerica so they would not ,think her leaving been facilitated by Mr Barnett…". In fact, there was no evidence to suggest that Mr. Barnett had "facilitated"
the
employment, and it was
the
Respondent's own evidence that she had indeed been approached directly by Neil Dunlop of Sandfield.
The
Tribunal's conclusion that Mr Barnett had sought to mislead
the
directors of Numerica in this respect was without foundation.
(b) In relation tothe
issue of whether there had been a diminution in
the
Respondent's work with. Sandfield,
the
Tribunal found at paragraph 7.9 that
the
reduction of
the
partnership scheme" and termination of
the
. "Employment Benefits Scheme" did not mean that
the
Respondent's work under them "…would cease or even substantially reduce", and that with regard to
the
new "Actinium Scheme" "... there would have been substantial work for
the
Claimant to do in setting this up..". These findings were perverse, in
the
light of
the
evidence that
the
number of clients in
the
Partnership Scheme had reduced by two-thirds, that
the
Employment Benefits Scheme had ceased entirely, and that as at
the
date of
the
hearing (March 2005) no work at all had yet been carried out in relation to
the
new Actinium Scheme.
(c) In relation tothe
meeting which took place on
the
10th March
2004
,
the
Tribunal found in paragraph 9.13 that "No proper reason [for
the
dismissal] was given to
the
Claimant until later when she asked for reasons." This finding is contrary to
the
Respondent's own evidence under cross examination, and
the
documentary evidence arising out of her communication with her recruiting agency (to be found in
the
supplementary bundle).
(d) In relation tothe
Appellant's recruitment of a qualified accountant,
the
Tribunal in paragraph 9.11, rejected Mr Barnett's evidence that
the
initial advertisement was a mistake, and found that "...
the
withdrawal of this advert and its replacement by
the
later advert was contrived by Mr Barnett to cover his tracks once he realised these proceedings were likely to occur." There was no evidence upon which this conclusion could be reached. It is contrary to
the
documentary evidence showing that
the
second advertisement had been placed and invoiced by
the
31st March
2004
(page 178 of
the
bundle) by which time
the
Respondent had made no complaint, and
the
evidence that Leo Duffy, a qualified accountant, was employed by
the
Appellant in April
2004
.
(e) In respect ofthe
relationship between
the
Appellant and Sandfield,
the
Tribunal's conclusions and
the
tone of their findings (in paragraphs 5, 7.11 and 9.6) were not supported by
the
evidence. In particular,
the
Tribuna1's finding in paragraph 7.13 that
the
Appellant and Sandfield "...will share
the
profits..." generated by a future scheme, is not a proper ref1ection of Mr Barnett's evidence. In paragraph 9.6, despite apparently accepting that
the
Appellant and Sandfield were legally separate entities,
the
Tribunal appears to conclude that they should not be treated as such because
the
"…practical (as distinct from legal) boundaries)…are extremely blurred and ill defined…". There was no proper evidence upon which
the
Tribunal could reach this conclusion, and/or
the
same was perverse.
(ii) the
Tribunal erred in law in finding that that there was in this case a relevant "transfer of undertaking" under
the
TUPE
Regulations
, in that:
(a) it was wrong "in law and/or misappliedthe
law in finding, on
the
basis of
the
evidence before it, that
the
"tax work" being carried out" by
the
Respondent for Sandfield was "identifiable as a stable and discrete economic entity" and was "sufficiently structured and autonomous", and therefore constituted an "undertaking" (as found in paragraph 9.9), and/or
(b) it was wrong law and/or misappliedthe
law m finding, on
the
basis of
the
evidence before it that
the
"tax work" was "transferred" to
the
Appellant (as found in paragraph 9.10, where
the
Tribuna1 does not state expressly why it was satisfied that there was transfer). In relation to this question,
the
Tribunal took no account of
the
evidence that
the
tax work continued to be controlled by Sandfield and was simply "out-scored to
the
Appellant (in
the
way that it bad previously been to Numerica) with
the
Appellant being paid for "work done" on a. monthly basis and that
the
work could therefore have been withdrawn from
the
Appellant at any time, and it took no account of
the
evidence that
the
"Tax Agent" continued to be Consulting Overseas Limited and not
the
Appellant.
(iii)the
Trlbuna1 erred in law in finding, on
the
basis on
the
evidence before it, that there was no "economic, technical or organisational reason" for
the
Appe1lant failing to employ
the
Respondent (as found in. paragraphs 9.11 and 9.12). In paragraph 9.11
the
Tribunal found that "...it was not necessary for
the
2nd Respondent to engage a qualified person to perform .
the
work undertaken by
the
Claimant".
The
Tribunal directed itself in law and/or misunderstood
the
law and/or misapplied
the
law in failing to take into account
the
fact that
the
Appellant needed to employ a qualified person because of its need for
the
employee to cover tasks beyond those previously undertaken by
the
Respondent.
The
Appellant relies on
the
fact that at that time, its sole employee was Wayne Barnett and a qualified Assistant was needed for
the
purposes of
the
business.
(iv) Inthe
premises,
the
Tribunal erred in law in finding, on
the
basis of
the
evidence before it, that
the
principal reason for
the
Respondent's dismissal was Sand field's transfer of its tax associated work to
the
Appellant (as found in paragraph 9.15), and in failing to find that
the
principal reason was "redundancy or some other substantial reason."
a) Thatthe
court of first instance has
the
advantage of seeing
the
witnesses and evaluating
the
significance of their evidence;
b) Thatthe
exigencies of daily court room life are such decisions are nearly always capable of being better drafted;
c) That unless it is demonstrated tothe
contrary it should be assumed that those carrying out a judicial function know what they are doing.
"The
object of
the
exercise is to paint a picture from
the
accumulation of detail.
The
overall effect can only be appreciated by standing back from
the
detailed picture which has been painted, by viewing it from 3
distance
and making an informed, qualitative appreciation of
the
whole. It is a matter of
the
evaluation of
the
overa11 effect of
the
detail, which is not necessarily
the
same as
the
sum total of
the
detail. Not all details are of equal weight or importance in any given situation"
constructed a foundation too frail to support the
generalised findings of fact which it makes and when
the
Employment Tribunal fails to leave any visible trail which shows why it has reached
the
conclusion to which it has come.
withdrew that advertisement and placed an advertisement for someone who was professionally qualified and indeed a candidate was appointed who was professionally qualified.
Errors of Law