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United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Scanfuture UK Ltd v. Bird & Ors  UKEAT 980_99_2303 (23 March 2001)
Cite as:  UKEAT 980_99_2303,  Emp LR 590,  ICR 1096,  IRLR 416
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|At the Tribunal|
|On 17&18 January 2001|
THE HONOURABLE MR JUSTICE LINDSAY (PRESIDENT)
MS B SWITZER
MRS R A VICKERS
SCANFUTURE UK LTD
(1) MRS J M LINK
(2) MR C J BENNETT
(3) SECRETARY OF STATE FOR DEPARTMEN T OF TRADE & INDUSTRY
MRS J M LINK
Transcript of Proceedings
|For the Appellant||MR J QUIGLEY (Solicitor)
Messrs Colman Coyle
80 Upper Street
MISS A HADLEY (Solicitor)
Messrs Rice Jones & Smiths
1 Catton Street
|For the Respondent||MR P SALES (Counsel)
MISS S MOORE (Counsel)
The Treasury Solicitor
Queen Anne's Chambers
MR JUSTICE LINDSAY (PRESIDENT)
The Secretary of State appears in both appeals by Mr Philip Sales and Miss Sarah Moore.
B. The TUPE Issues
"The conclusion of the Tribunal was that following the liquidation of Scanfuture Ltd a part of the business of Scanfuture Ltd was taken over by Scanfuture (UK) Ltd. Scanfuture Ltd had provided design consultancy services. Scanfuture (UK) Ltd provided design consultancy services. These were initially on the same contracts as Scanfuture Ltd had been working. The Tribunal found that Mr Bird specifically continued to work on the same project following the transfer and although his management duties did not continue within the new business he was still concerned with providing design consultancy. So far as Mr Bennett was concerned his expertise in design and drafting continued through the transfer of the business. So far as Mrs Link was concerned, although she was no longer Company Secretary in the new company, her responsibilities continued in relation to the payroll. The overall conclusion of the Tribunal was that that part of the business of Scanfuture concerning design consultancy continued under the name of Scanfuture (UK) Ltd and, on balance, the facts of the case indicated that this was so. The conclusion of the Tribunal was that Scanfuture Ltd retained its identity in Scanfuture (UK) Ltd so far as its design consultancy work was concerned. Seven employees out of seventeen (the remainder were made redundant) transferred to the transferee. Although there was no transfer of assets or buildings, customers were transferred and the work relating to design consultancy was very similar to that of Scanfuture Ltd. There was no real interruption in these activities. The conclusion of the Tribunal was that, therefore, following the application of the Regulations and taking into account the facts decided by the Tribunal, in the case of all three Applicants, they were not dismissed at the time of the transfer, that their employment continued with Scanfuture (UK) Ltd, and that they retained continuity of employment with their new employer."
"The European Court of Justice in the Spijkers case also suggested that it was necessary to take into account all of the circumstances in this type of case including the type of business or undertaking involved, the transfer or otherwise of tangible assets such as building and stock, value of intangible assets at the date of transfer, whether the majority of staff were taken over by the new employer, the transfer or otherwise of customers, the degree of similarity of activities before and after the transfer and the duration of any interruption in those activities. This Tribunal had to make a decision on the balance of probabilities and take into account all those factors and any others which were relevant as to the whether the regulations applied in this case."
The language there used by the Employment Tribunal differs a little, but not significantly, from that used in Spijkers itself - see para 13 thereof.
The Appellants' attack on the Tribunal's decision in this part of the case divides into four.
"The importance of Süzen had, I think, been overstated."
and where the Court of Appeal recognise that the "Decisive criterion" identified in Spijkers (and relied on by the Employment Tribunal in the case at hand) had been confirmed by Süzen. In ECM the earlier case of Betts in the Court of Appeal was fully considered and, in so far as there are tensions between the two, the Employment Appeal Tribunal not only may but should follow the later case - see RCO Support Services & Aintree Hospital Trust -v- UNISON and others  IRLR 624 at 627, para 18.
"He continued working for [UK]."
Mrs Link fell within the description of those dismissed on the 13th November 1998 and of her it was said that:-
"Her responsibilities continued in relation to the payroll" (our emphasis)
"she continued to work but only on a part-time basis for [UK]."
We have no reason to suppose that her payroll duties for Scanfuture did not include such duties in relation to those employed in the design consultancy part of its business. The Tribunal held there had been no real interruption in the activities between Scanfuture and UK. Whilst the specific dates given by the Tribunal may in some respect be open to challenge, there is nothing here which puts the substance of the Tribunal's findings in jeopardy and in any event we must remind ourselves that our function is only in relation to errors of law rather than as to errors, if such there be, of fact.
C. The Article 6 Issues
(i) What does the Article require?
(ii) By what standard or tests are shortcomings in, or satisfaction of, those requirements to be judged?
(iii) Judged by such standards or tests, were there any material shortcomings in relation to the Employment Tribunal's position from the date of the hearing in April 1999 down to the promulgation of its decision in June 1999?
(iv) If there were, what is to be done about that? If we find that the Employment Tribunal was not Article 6-compliant in 1999 and if that leads us to set aside the decision below, we would have to consider whether Employment Tribunals are now compliant before we could remit to a fresh Tribunal. There would be no point in remitting to another non-compliant Tribunal.
(i) The Article's requirements
"In the determination of his civil rights and obligations .... everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law...."
Section 1 (2) of the 1998 Act provides that, inter alios, Article 6 is to have effect subject only to some derogations and reservations not here relevant. Material which must be taken into "account in the interpretation of Convention rights is specified in section 2. It includes judgments of the European Court of Human Rights and opinions of the Commission. A person claiming that a Tribunal has acted in a way which is incompatible with the Convention right may, if he is a victim of that unlawful act, rely upon the Convention right in any legal proceedings - section 7 (1) (b) and 7 (6) (b). It can be seen that there may be a number of ways in which a complaint might be made to the Employment Appeal Tribunal of an Employment Tribunal having been other than one which was independent and impartial. A "gateway" may, for example, be open by way of the Member States' guarantee of holiday pay upon the employer's insolvency. Another way of bringing matters before the Employment Appeal Tribunal might be to say that the Tribunal below had failed to recuse itself. However, any such technicalities are not developed before us nor is anything sought to be made of the fact that the Employment Tribunal process had been completed before the 1998 Act came into effect. Mr Sales puts the Secretary of State's case entirely on the basis that there has been no breach of Article 6 in any event. We do not understand Miss Hadley to resist or to have any cause to resist that attractive approach.
"The Commission recalls the established criteria to which the Court has regard in assessing the independence of Tribunals, in particular from the parties. These include, the manner of appointment of Members, the duration of their terms of office, the guarantees afforded by the procedure against outside pressures and whether the body presents an appearance of independence."
- see also Ciraklar -v- Turkey (1998) VII R.J.D. 3071 at para 38.
".... ascertaining whether sufficient guarantees exist to exclude any legitimate doubt in this respect. It must be determined whether there were ascertainable facts, particularly of internal organisation, which might raise doubts as to impartiality. In this respect, even appearances may be important what is at stake is the confidence which the Court must inspire in the accused in criminal proceedings and what is decisive is whether the Applicants' fear as to a lack of impartiality can be regarded as objectively justifiable."
- see Findlay supra at para 90, Ciraklar supra at para 38. We shall assume that parties in civil proceedings are no less entitled to a Tribunal which inspires that confidence. The word "guarantees" in the context in which it appears in Findlay seems to us, familiar with both what is its usual technical and its common everyday use in English, to be potentially misleading; it may be that the word "safeguards" would be more apt but we shall attempt to keep in mind the word "guarantees".
"The Court thus considers that the mere fact that the Deputy Bailiff presided over the States of Deliberation when DDP6 was adopted in 1990 as capable of casting doubts on his impartiality when he subsequently determined, as the sole Judge of the law in the case, the Applicant's planning appeal. The Applicant therefore had legitimate grounds for fearing that the Bailiff may have been influenced by his prior participation in the adoption of DDP6. That doubt in itself, however slighte its justification, is sufficient to vitiate the impartiality of the Royal Court, as it is therefore unnecessary for the Court to look into the other aspects of the complaint."
In a concurring opinion Sir John Laws, sitting as an ad hoc Judge said:-
"I add a few words of my own merely to emphasise that the only objective basis upon which, on the facts of this case, a violation of Article 6 (1) may properly be found, depends in my view entirely upon the fact that the bailiff who presided over the Royal Court in the legal proceedings giving rise to this case presided also (as Deputy Bailiff) over the States of Deliberation in 1990 when DDP6 was adopted. That is the thrust of the reasoning in paragraph 57 of the principal judgment, with whose terms I entirely agree."
The case represents a striking example of just how little may properly be taken to give rise to a want of an appearance of independence or to a legitimate fear of bias or partiality.
(ii) The standard or test to be applied.
"Where there is no question of actual bias, our task under Article 6 (1) must be to determine whether the reasonable bystander - a fully informed layman who has no axe to grind - would on objective grounds fear that the .... Court lacks independence and impartiality."
It may be that that "and" should be an "or". In the Courts Martial Appeal Court in R -v- J. Spear and others 15th January 2001 Laws L.J., giving the judgment of the Court, said at para 35:-
"We consider that in the context of our domestic jurisdiction, a useful but by no means exclusive approach to the objective requirements of Article 6 may be to invoke the common law's reasonable man. Would the reasonable man, apprised of all the relevant facts about the particular case and the general practice, conclude that there existed any real doubts as to the Court's impartiality or independence?" (The Court Martials Appeal Court's emphasis).
Spear does not bind us but the judgment commands respect. In Director General of Fair Trading -v- The Proprietary Association of Great Britain Case No. C/2000/3582 C.A. Lord Phillips M.R. giving the judgment of the Court, after a review of both domestic and European Court of Justice cases continued at para 84:-
"84. We would summarise the principles to be derived from this line of cases as follows:
(1) If a Judge is shown to have been influenced by actual bias his decision must be set aside.
(2) Where actual bias has not been established the personal impartiality of the Judge is to be presumed.
(3) The Court then has to decide whether, on an objective appraisal, the material facts give rise to a legitimate fear that the Judge might not have been impartial. If they do the decision of the Judge must be set aside.
(4) The material facts are not limited to those which were apparent to the Applicant. They are those which are ascertained upon investigation by the Court.
(5) An important consideration in making an objective appraisal of the facts is the desirability that the public should remain confident in the administration of justice .......
86. When the Strasbourg jurisprudence is taken into account, we believe that a modest adjustment of the test in Gough is called for which makes it plain that it is, in effect, no different from the test applied in most of the Commonwealth and in Scotland. The Court must first ascertain all the circumstances which have a bearing on the suggestion that the Judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility or a real danger, the two being the same, that the Tribunal was biased."
These references to an "informed" observer (the Director General case) or "a fully informed layman" (McGonnell) and "a reasonable man apprised of all the relevant facts about the particular case and the general practice" (Spear) do raise difficulties about the reasonable man's sources of information. There is no difficulty, it seems to us, in ascribing to him all information which can be said to be in the public domain even if only a persistent busy-body would be likely to have learned of it but if he is to have ascribed to him information only available to anyone through the exercise of the powers of the Court in the case being examined or otherwise available by reason only of those proceedings then a problem does, as it seems to us, arise. The problem would be that one would then be ascribing to the reasonable observer information not available to the public yet doing so as part of an exercise which was intended to ensure that it was the public that was to be procured to remain confident in the administration of justice. If, on truly publicly available information, there would be a real doubt as to the Court's impartiality or independence, that view would be likely to remain the view of the informed public-at-large even if a party to the proceedings or a confidant of a party might have special knowledge which would have dissipated that real doubt. We shall for the time being therefore ascribe to our construct, the fair-minded and informed observer, only such information as could be acquired by a persistent, even dogged, inquirer as a member of the public and not such information as would take him out of that class - the public - whose confidence in the administration of justice was being sought to be preserved.
(iii) Applying that test, were there shortcomings in 1999?
"We will, therefore, not make any formal ruling upon the Article 6 question but we do express our disquiet about the appearance of a lack of impartiality of the Employment Tribunals when adjudicating upon claims against the Secretary of State."
That disquiet was then explained at greater length from p.89:-
"The question at issue is whether the Employment Tribunal is an "independent and impartial" Tribunal in relation to a determination of claims brought by complainants against the Secretary of State for the DTI. We wish to make it quite clear that no suggestion is being made nor could be made that this particular Employment Tribunal has acted in any way improperly or incorrectly. The Lay Members of the Employment Tribunals are appointed by the Secretary of State for the DTI and are paid for by him out of funds made available to the DTI from the Treasury. The DTI, in turn, provides funds to the Employment Tribunal Service, the agency which provides the administration services for Employment Tribunals [the Agency]. Lay Members hold their appointment through an instrument of appointment, the terms of which may be varied by the Secretary of State. The remuneration, fees and allowances for the Lay Members are determined by the Secretary of State [see section 5 of the Employment Tribunals Act 1996]. They hold office for the duration specified in their Letter of Appointment. Under the Instrument, their appointment made be terminated by the Secretary of State, with the consent of the Lord Chancellor, on one month's notice or summarily for misconduct."
After a reference to the position of Employment Tribunal Chairmen with which we are not concerned Morison J. continued:-
"The rules of procedure of the Employment Tribunals are made by the Secretary of State. Under them, he has wide powers to intervene in cases to which he is not party."
At p. 91 Morison J. continued:-
"There are other Tribunals within the Court structure which are administered by an agency of the Lord Chancellor. It is something of an anomaly that the Employment Tribunals should have such close links with an executive arm of the Government .... It is our view that there is a real and troubling question as to whether Employment Tribunals may properly and lawfully adjudicate on claims made against the Secretary of State, having regard to Article 6 of the Convention."
(i) The Secretary of State has no rôle in determining the composition of the Employment Tribunal in any given case.
(ii) Mrs Link's and UK's case was heard by a panel of three which had as its Chairman a full-time Chairman, a person with a minimum of 7 years legal qualification and who had been appointed by the Lord Chancellor to hold office indefinitely up to the compulsory retirement age of 70 subject only to removal from office by the Lord Chancellor on grounds of misbehaviour or incapacity and to a provision which also allowed the Lord Chancellor to remove or suspend from any office any Chairman who was unsuitable to perform the duties of office for any other cause or if there was any likelihood that public confidence in his or her impartiality might be impaired.
(iii) The lay members in Mrs Link's and UK's case (as in others) were picked from a panel of part-time lay members appointed to the panel by the Secretary of State. As to this panel Miss Rhodes says:-
"The Secretary of State appoints the other two panels which are made up of part-time Lay Members. One comprises persons appointed after consultation with the employers' organisations whilst the other is made up of persons appointed after consultation with organisations which represent employees. The policy intention behind the involvement of the Secretary of State and his predecessors, as opposed to the Lord Chancellor, in this process is that with his responsibility for employment relations, he is in a better position to assess the nature and suitability of the employment relations experience of candidates for Lay membership."
(iv) Speaking of the selection process as it was in early 1999, the provisions which had applied to the lay members in Mrs Link's and UK's case, Miss Rhodes says:-
"...... The Secretary of State would invite a number of employer and employee organisations ("the nominating bodies") to put forward suitable candidates for consideration by the Secretary of State. Candidates would be sifted by officials against a criteria previously published by the Secretary of State, and those who scored highest for each panel and region would be recommended by the Secretary of State for appointment."
(v) As for the terms of appointment as they were in April to June 1999, they included that the Secretary of State might, with the consent of the Lord Chancellor, terminate an appointment without cause shown on one month's notice or, without notice. with the Lord Chancellor's consent, where (in the "without notice" case) in the opinion of the Secretary of State the lay member had (inter alia) been guilty of serious misconduct or where there was a likelihood that public confidence in the member's impartiality had been or would be impaired.
(vi) The terms of employment included a "sitting" requirement, that a Member should be available for at least 15 days per annum and they provided also that a lay member must recuse himself in circumstances which might give rise to doubt as to his impartiality.
(vii) The standard length of appointment prior to the 25th October 1998 had been for 3 years. On that day existing lay members were re-appointed for 1 year only. This was chiefly because consultation was about to begin as to new arrangements for the appointment and selection of lay members and a short term of office was adopted so as not to prejudice the earlier adoption of whatever new arrangements emerged by having numbers of previous appointees still holding office under the earlier provisions. Thus, fortuitously untypical of practice both before and after, in April to June 1999 numbers of lay members, including the lay members in the case before us, were holding office on short-terms with only months to run.
(viii) At that time, too, the Secretary of State had a discretion as to their re-appointment. In practice eligible lay members had been re-appointed unless the President of the Employment Tribunals, a full-time Judge, acting on the advice of the appropriate Regional Chairman, had requested that there should be no re-appointment of the particular individual concerned or, exceptionally, where evidence was presented to the Secretary of State that the lay member concerned had been involved in conduct incompatible with his re-appointment. The DTI wrote to the President of the Employment Tribunals asking him to name Lay Members who should not be re-appointed. A Lay Member thus not renewed had a right to ask the Secretary of State to review his case. Judicial review of a decision not to renew would also have been possible.
(ix) Some measure of the practice as to re-appointment, although related to the 25th October 1999 and thus only in the future at the time we are here concerned with, was that of 1960 Lay Members then on the Panel 1927 were re-appointed, 12 were not and 21 either resigned or retired. Of the 12 who were not re-appointed, 11 had failed to sit frequently enough and 1 had become a Parliamentary Candidate.
(x) As we have seen, at the time of Mrs Link and UK hearings the Secretary of State had the ability, with the consent of the Lord Chancellor, to terminate a lay member's office without cause shown on 1 months' written notice. Miss Rhodes says:-
"However, as far as I am aware, this provision was never invoked. Again, Lay Members could seek Judicial Review of decisions to remove them from office but I do not believe that this has ever happened."
(xi) The money required to pay lay members of the Employment tribunal comes from the budget allowed to the Employment Tribunals Service, which is an Executive Agency of, and wholly funded by, the Department of Trade and Industry. The ETS makes an annual budget bid to the DTI which includes the ETS's estimate of the funds necessary to meet fees and expenses of lay members of the Employment Tribunals.
(xii) The Secretary of State may pay such fees and allowances to lay members of the Employment Tribunal as he may, with the consent of the Treasury, determine - Employment Tribunals Act 1996 section 5 (2).
(xiii) Lay members' fees are specified in their Instruments of Appointment. In early 1999 they stood at £121 a day. There appears to be no express power in the DTI or ETS to procure that different lay members sitting at the same time should be paid different fees and it is not suggested that that has ever happened. Travel expenses in excess of £5 and some other expenses are allowable such as overnight accommodation when necessary and claims for them are checked by ETS staff.
(xiv) Miss Rhodes ends her affidavit by saying:-
"It emerges from the above that the Secretary of State has not in practice, through the nature of that relationship, had any possible means of influencing the decisions of Lay Members in Tribunal cases through "preferment". He is not involved in the allocation of Lay Members to cases, he has been guided almost exclusively by judicial advice in making re-appointments and removal decisions, and the remuneration policy and practices operated by the ETS do not discriminate between Lay Members."
"It was not enough for the Solicitor General to refer to the practice which had been followed in recent years. The question was whether the framework within which the temporary Sheriff worked provided protection against improper interference or influence."
"As was explained in the Court's Hulbert and Le Compte -v- Belgium judgment, even where an adjudicatory body determining disputes over "civil rights and obligations" does not comply with Article 6 (1) in some respect, no violation of the Convention can be found if the proceedings before that body are "subject to subsequent control by a judicial body that has full jurisdiction and does provide the guarantees of Article 6 (1).""
That reference to "full jurisdiction" has to be borne in mind. In Bryan the European Court of Human Rights appears to be saying that as, on the appeal to the High Court in that case, the impugned decision by the Planning Inspector below could have been set aside if it had been arrived at by reference to irrelevant factors or without regard to relevant factors or upon evidence incapable of supporting the conclusions at which the Inspector had arrived, or by way of irrational perversity, that sufficed to undo the vice in the decision below in the specialised area of law (Planning law) which was there in issue. But crucial to the reasoning of the Court and a factor which presumably entitled it to depart from the requirement of a "full jurisdiction" to which it had earlier referred, was the finding that there was, in Bryan, on appeal to the High court, no dispute as to primary fact. It is a matter that the Court refers to three times, in paras 42, 43 and 47.
(iv) What, then, is to be done?
(1) Lay members, while still appointed by the Secretary of State - see Employment Tribunals (Constitution etc.) Regs 1993 para 5 (1) (b) and (c), - are now appointed under a system which includes an element of open competition. The fact that members are appointed by the Executive is not sufficient to raise doubts as to the independence or impartiality of lay members "especially as in many contracting states it is the Executive which appoints judges" - Belilos -v- Switzerland (1988) EHRR 466 at p. 488 para 66.
(2) All appointments are now made for a (renewable) period of 3 years.
(3) A lay member may still be removed upon a written notice from the Secretary of State upon one or more of five specified grounds (briefly, misbehaviour, incapacity, failure as to training, failure to satisfy the sitting requirements and sustained failure to observe the standards reasonably to be expected of a holder of the office) but there is now a very substantial judicial involvement. The Secretary of State cannot remove a Lay Member unless, having first consulted with the President of the Employment Tribunals, he then notifies the Lord Chief Justice of his concern and requests him (in consultation with the President) to nominate a Judge to investigate all circumstances and report his findings to the Lord Chief Justice and to the Secretary of State. Only if the report of the investigating Judge is that grounds for removal are made out and if the Lord Chief Justice concurs in the removal can the Secretary of State then remove.
(4) Subject to the age requirement (70 years) and to seven conventional and appropriate specified grounds of non-renewal, a lay member will automatically be offered re-appointment at the end of his first or subsequent terms of 3 years. The Secretary of State's ability not to renew is now subject to substantial judicial control closely following that as to removal described above.
(5) The tenure of a lay member's office is now for far longer than the untypically short period which operated during Mrs Link's and UK's hearing. Moreover, there is good practical reason for the Secretary of State, as a person familiar with industry and business, to be the person who appoints the lay members representing both the employer - and employee - sides of the Tribunal.