Appeal No. EAT/814/92
	I N T E R N A L

	EMPLOYMENT APPEAL TRIBUNAL
	58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

		At the Tribunal
		On 15th January 1993

	Before

	THE HONOURABLE MR JUSTICE KNOX

	MR K GRAHAM CBE

	MISS D WHITTINGHAM

JOHN WOODMANS COFFEE HOUSE	APPELLANTS

(1) MRS J SLY	RESPONDENTS
(2) MRS L PULLEN

	Transcript of Proceedings

	JUDGMENT

	PRELIMINARY HEARING

Revised

	APPEARANCES

For the Appellants	MR B FROST-FOSTER
(Partner)

	MR JUSTICE KNOX:  Mr Frost-Foster is the Appellant before us in respect of the preliminary decision of the Industrial Tribunal sitting at Bristol on the 24th August 1992 to the effect that the Tribunal had jurisdiction to entertain two applications that were then before it by Mrs J M Sly and Mrs L M Pullen for unfair dismissal.

	The Tribunal at that stage was solely concerned with the question of continuity of employment, because that was an issue which sensibly was taken as a preliminary point, and it therefore did not address the question of whether the dismissals which do appear to have occurred were fair or unfair.

	The background is that Mr Frost-Foster, and I propose to ignore his wife who appears to be and have been his partner in this, but nothing turns on the existence of a partnership, started, what he not unnaturally perhaps thought, was a brand new business in premises upon which there had, the previous week, been conducted an enterprise which bore some similarity, to put it no higher, to that which Mr Frost-Foster conducted.  The earlier business, according to the Industrial Tribunal's findings, but again whether they were right or wrong about this makes no difference to this particular aspect of the matter, was conducted by a Mrs Woodman in premises that were then known as John Woodmans Coffee House in the Brunel Centre in Swindon.  The local authority was the landlord.  The lease was vested in Mr Woodman, who became the subject of a bankruptcy order in late March 1992, and he had conducted a hairdressing business in the upper parts of the premises and either he, or Mrs Woodman, as I say it makes no difference which, conducted a cafe on the lower part.  That enterprise employed Mrs Sly and Mrs Pullen.

	The Industrial Tribunal heard the preliminary point and there were before it, a solicitor for Mr Frost-Foster and Mr Frost-Foster himself to give evidence, and Mrs Sly and Mrs Pullen and a friend of theirs who was recorded as being a licensed conveyancer and therefore, by profession not a litigation expert.  The Industrial Tribunal analysed the facts and made various findings which are binding on this Tribunal unless it could be shown that it was one of those very rare cases where there was absolutely no evidence upon which those findings could be based.  The findings of fact that they made were that some of the assets of the business that was conducted before Mr Frost-Foster started did go over from the old owner to the new.  There was before us, and there was before the Tribunal, a deed of assignment of the fixtures and fittings, which are of the sort of thing that one would expect for a cafe business, or indeed, a restaurant, and they passed over for a sum of £3,053 and some pence.  The assignor was Mrs Woodman.  We are told by Mr Frost-Foster that the business in fact belonged to Mr Woodman but that he was not available because he had gone abroad and, of course, once the bankruptcy order was made, which we are told was on the 24th March, he would have had no locus standi to make the assignment anyway because the property would have vested in his trustee.  However that may be, there is no doubt about it that the fixtures and  fittings did pass.  There was no formal assignment of any interest in the lease of the premises.  The indications are that there was a surrender or disclaimer by the trustee of the lease that belonged to Mr Woodman and the local authority, the landlord, gave Mr Frost-Foster a licence so that he was not the successor of any proprietary interest in the premises that had vested in Mr or Mrs Woodman but he was a person who was given an interest by way of licence in the self same premises.  There is authority in the European Court of Justice that it is not an essential for there to be a transfer of undertaking within the Directive, and therefore, within the regulations that obtain in this Country, for there to be a succession to the particular interest in the premises that the previous owner of the business had for there to be, what is called in the regulations "a relevant transfer".  There was no formal assignment of goodwill or, the Industrial Tribunal found, of anything else relating to the business as such.  They also recorded the fact that Mr Frost-Foster made various changes, he changed the name of the premises, and by that, of course, one sees that he would have not taken the benefit of any goodwill that there might be in the name, which, at least in principle, is a possibility.  The Industrial Tribunal also found that he made changes to the standards of the menu and they made a finding, with which Mr Frost-Foster profoundly disagrees, that basically he continued to serve the same sort of food and drink to the same clientele.  Mr Frost-Foster feels strongly that he had a different sort of menu and a radically different type of customer.  Now, putting all those circumstances together, the Industrial Tribunal looked at the decisions of the European Court of Justice, notably in a case called Daddy's Dance Hall, which are concerned with the European Economic Community Directive 77/187, which was the basis upon which the regulations which operate in this Country, the Transfer of Undertakings (Protection of Employment) Regulations 1981, were founded.  They asked themselves whether there was a transfer within the definition of a relevant transfer in those regulations and they said this, in relation to the decision of the Court of European Court of Justice:
"The emphasis, as is plain from the case of Foreningen Af Arbejdsledere I Danmark v. Daddy's Dance Hall A/S [1988] IRLR 315, is on whether there was a change in the natural or legal person who consequently entered into the obligations as an employer towards the employees working in the undertaking.  We are unanimously satisfied that that is what happened here.  The business as an economic entity was transferred to the respondent as a going concern and he continued it in that way, and in our view the fact that there was no transfer of the lease itself is not a conclusive factor."

As to the latter they were plainly right.  The absence of a transfer of the lease is not, by itself, conclusive, although it is a factor to be taken into account.  This is, in our view, one of those cases where the Industrial Tribunal was under a duty to look at the various facts and make up their minds whether on those facts there was, or was not, a relevant transfer as defined by the regulations and as those regulations and the directive on which they are founded, have been interpreted and, as has been observed, it is rare for this Tribunal to have power to interfere with the conclusion that has been reached by an industrial tribunal on this type of question so long, at least, as the industrial tribunal has looked at the right question.  That, it does seem to us, is what happened here because that sentence:
"The business as an economic entity was transferred to the respondent as a going concern"

is the heart of these questions.  It is, of course, a matter upon which different tribunals might well come to different conclusions.  That is almost inevitable from the rather vague terms in which the regulations are phrased.  But, there does not, in our view, appear to be any discernible error of law in the treatment by the Industrial Tribunal of this rather difficult question.  Mr Frost-Foster regards the result as unfair and that is a matter for him.  We have to apply the law, and the law is, undoubtedly, laid down in those regulations and in the decisions that follow upon them.  We have come to the conclusion that there is not a basis for saying, and no basis has been put forward to us, for saying that there is an error of law in the approach of the Industrial Tribunal in this case and therefore this appeal must be dismissed.  

	That, of course, does not mean that there is a finding that there has been an unfair dismissal, what it does mean is that there is a finding that there is continuity of employment and we so decide.  The appeal will be dismissed.