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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Cheesman & Others v R Brewer Contracts Ltd [2000] UKEAT 909_98_3011 (30 November 2000) URL: http://www.bailii.org/uk/cases/UKEAT/2000/909_98_3011.html Cite as: [2001] Emp LR 143, [2001] IRLR 144, [2000] UKEAT 909_98_3011

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APPEARANCES

 

For the Appellants Mr Cheesman & Others For the Appellants Onyx UK Ltd	MR B LANGSTAFF QC and MISS J EADY (of Counsel) Instructed by:- Legal Department UNISON 1 Mabledon Place London WC1H 9AJ MR B NAPIER (of Counsel) Instructed by:- Messrs Biddle 1 Gresham Street London EC2V 7BU
For the Respondents R Brewer Contracts Ltd	MR PITT-PAYNE (of Counsel) Instructed by: Director of Industrial Relations Construction Confederation Construction House 56-64 Leonard Street London EC2A 4JX

MR JUSTICE LINDSAY (PRESIDENT):

1. This is the full hearing of the appeal of some former employees, Mr P. Cheesman and 11 others, and of their erstwhile employer, Onyx (UK) Ltd. The Respondent is R. Brewer Contracts Ltd. Mr Cheesman and his fellows appear by Mr Langstaff Q.C. and Miss Eady; Onyx appears by Mr Napier and the Respondents, Brewers, by Mr Pitt-Payne. The questions at issue surround the difficult subject of the Transfer of Undertakings (Protection of Employment) Regulations 1981 and the Directive, 77/187, usually called the "Acquired Rights Directive".
2. Before going further it may be wise to remind ourselves of the preamble and some of the provisions of that Directive. The preamble includes the following:-

"Whereas economic trends are bringing in their wake at both National and community level changes in the structure of undertakings, through transfers of undertakings, businesses or parts of businesses to other employers as a result of legal transfers or mergers; whereas it is necessary to provide for the protection of employees in the event of change of employer, in particular, to ensure that their rights are safeguarded......."

Article 1 (a) and (b) are as follows:-

"1. (a) This Directive shall apply to any transfer of an undertaking, business, or part of an undertaking or business to another employer as a result of a legal transfer or merger.

(b) Subject to subparagraph (a) and the following provisions of this Article, there is a transfer within the meaning of this Directive where there is a transfer of an economic entity which retains its identity, meaning an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary."

Article 7 (a) provides:-

"Member States shall introduce into their National legal systems such measures as are necessary to enable all employees and representatives of employees who consider themselves wronged by failure to comply with the obligations arising from this Directive to pursue their claims by judicial process after possible recourse to other competent authorities."

3. The facts found by the Tribunal may be stated in outline as follows. Until October 1995 Teignbridge District Council's stock of let-out properties was maintained by its own employees. Compulsory competitive tendering was then introduced. Onyx tendered and won the contract. It gained a contract called the Responsive Maintenance Contract ("the RMC") which ran for 18 months but was renewed for a further 18 months, thus making 3 years in all. Onyx also gained 3 other contracts with Teignbridge at the same time. The Employment Tribunal whose decision is appealed against described matters as follows:-

"4. The Responsive Maintenance Contract is for the provision of urgent maintenance works on the Council's housing stock. The four contracts were regarded by the parties as a package of building maintenance contracts in separate components.

5. In order to carry out the work in October 1995, Onyx acquired the use of the Council's yard, its equipment such as lifting equipment and maintenance pits and office accommodation. They also took on the Council's workforce of about 22 persons of whom 14 at the end of the contract in 1998 have been regarded as allocated to the Responsive Maintenance Contract. They include the present Applicants."

4. In March 1998 the RMC went out to re-tender. This time Brewer won it. The Employment Tribunal said:-

"10. That meant there was no requirement by Onyx for the staff engaged on the Responsive Maintenance Contract and accordingly the 14 staff were dismissed. It was the view of Onyx that the Transfer of Undertakings Regulations applied and Brewer should be taking on the staff. It had however become clear that that was contrary to the views of Brewer. The Council itself had some doubts about the application of the Regulations."

Brewer took on none of the employees whom we shall call "the Onyx 14". The Tribunal said:-

"Since the commencement of the contract they [Brewer] have carried on the work with the equivalent of 8½ full-time staff as against 14 at Onyx."

No assets, tangible or intangible passed from Onyx to Brewer, either directly or indirectly by way of the Council. The Tribunal held as follows:-

"13. Brewer have their own premises, vans and workforce and in order to carry out the contract they have not acquired any assets from either the Council or Onyx such as premises or equipment. None of the workforce who were engaged by Onyx on this contract have joined Brewers. The only item which can be regarded as being transferred is the contract itself. In essence the Council has simply terminated the contract with Onyx on its expiry and has awarded a new contract to Brewers. It is however in respect of the same work on the same housing stock. In practical terms Brewer are carrying out the work in much the same way as Onyx carried it out."

5. They having been dismissed, the Onyx 14 issued IT1s in March 1998. They claimed that they were entitled to regard themselves as transferred on their existing terms and conditions to employment by Brewer. They claimed redundancy pay and compensation for unfair dismissal. There was then a hearing at the Employment Tribunal at Exeter before the Chairman, Mr B.E. Walton, sitting alone. That was on the 26th May 1998. His Decision was sent to the parties on the 2nd June 1998. The Decision was:-

"1. There was no transfer of any undertaking within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 1981 from the first Respondent [Onyx Limited] to the second Respondent [Brewer]; accordingly the claims against the second Respondent [Brewer] are dismissed.

2. The claim against Teignbridge District Council by Mr Davis [one of the 14] is dismissed.

3. The claims will be re-listed for hearing against Onyx (UK) Ltd."

The employees' Notice of Appeal is dated 1st July 1998; Onyx's is dated 13th July 1998. There is no appeal against that second holding as to a claim against Teignbridge.

6. We shall need to return to some facts but we now turn to the law and first refer to a case which loomed large in the Employment Tribunal, not least because it was at the time the most recent decision of the European Court of Justice in the subject area. It was referred to several times by the Tribunal and was cited from; it is Suzen -v- Zehnacker [1997] ICR 662 ECJ, which was decided on the 11th March 1997. At p. 672 d of the report one finds the answer given by the ECJ to the questions from the National Court:-

"The answers to the questions from the National Court must therefore be that Article 1 (1) of Directive (77/187/EEC) is to be interpreted as meaning that the Directive does not apply to a situation in which a person who had entrusted the cleaning of his premises to a first undertaking terminates his contract with the latter and, for the performance of similar work, enters into a new contract with a second undertaking, if there is no concomitant transfer from one undertaking to the other of significant tangible or intangible assets or taking over by the new employer of a major part of the workforce, in terms of their numbers and skills, assigned by his predecessor to the performance of the contract."

7. Whilst the Chairman does not cite that particular passage, one could therefore readily understand the Chairman, seeing no assets, tangible or intangible, moving from Onyx to Brewer and no employees whatsoever moving from the one to the other, relying heavily on Suzen. However, looking at later cases in the European Court of Justice and to two cases in the Court of Appeal, we find the impact of Suzen to have been assessed in rather different ways. We have in mind, in our domestic jurisdiction, the decisions of the Court of Appeal in Betts and another -v- Brintel [1997] C.A. ICR 792, [1997] IRLR 361 and ECM (Vehicle Delivery Service) Ltd -v- Cox and others [1999] IRLR 559 C.A.. Whilst the former was decided by the Court of Appeal in a way that could be described as consistent with a straightforward application of the particular passage that we have cited from Suzen, in ECM no assets nor any employees at all transferred and, were Suzen and the passage above cited from it to be the sole test, the Court of Appeal could not have concluded as it did. ECM shows a preference for some pre-Suzen decisions of the ECJ or, at any rate, points to there being continuing life in some pre-Suzen cases, cases which Suzen did not criticise but, indeed, which it purported to adopt.
8. Thus at p. 1168 in ECM one finds the following in the judgment of Mummery LJ (with whom Laws and Henry LLJ agreed):-

"The Employment Tribunal applied the correct test, as laid down by the Court of Justice in Spijkers and followed in other cases, such as Schmidt [1995] ICR 237. Although the Suzen decision [1997] ICR 662 has been described as involving a shift of emphasis or a clarification of the law, nothing was said in Suzen which casts doubts on the correctness of the interpretation of the Acquired Rights Directive (Council Directive (77/187/EEC) (OJ 1977 L61 p. 26)) in the earlier decisions cited to and applied by the Employment Tribunal in the Extended Reasons.

In my judgment it is clear that but for the argument about the scope and effect of the later decision in Suzen there would be no possible ground of appeal in this case. ECM's case has to be that Suzen made all the difference. It does not in this case. The importance of Suzen has, I think, been overstated. The ruling in Suzen should be seen in its proper context.

(1) The Court of Justice has not overruled its previous interpretative rulings in cases such as Spijkers and Schmidt. This is clear not only from the citation of those cases in the judgment in Suzen, but also from their continued prominence in the reasoning of the Court of Justice in its post-Suzen decision in Sanchez Hidalgo -v- Asociacion de Servicios Aser (case c - 173/96) [1999] IRLR 136.

(2) It is still the case that it is for the National Court to make the "necessary factual appraisal" in order to decide whether there is a transfer in the light of the criteria laid down by the Court of Justice.

(3) It is still the case that those criteria involve consideration of "all the facts characterising the transaction in question", as identified in Spijkers, at paragraph 13 of the judgment of the Court of Justice, in order to determine whether the undertaking has continued and retained its identity in different hands."

In RCO Support Services and Aintree Hospital Trust -v- UNISON and others [2000] IRLR 624 the EAT dealt with Betts and ECM, and what was, as it then seemed to the EAT, a difference between them, as follows:-

"At our level the Court of Appeal cases we have looked at pull , as it seems to us, in different directions, with Betts -v- Brintel underlining the Suzen decision that without assets or a majority of the workforce moving over there can have been no transfer, but with ECM underlining the continuing relevance of Spijkers and Schmidt as cases insisting that the matter is still one of fact to be approached in the round by the Tribunal as the National fact-finding Court. It is not for us to pick and choose between them; given that ECM was heard and decided after Betts -v- Brintel and given that it expressly considers Betts -v- Brintel then if there is, as we have thought there to be, tension between the two, we must follow the latter of the two."

We shall take the same approach as was taken in RCO. What then, does the necessary approach "in the round" now require?

9. It is, we think, possible to discover the present state of the law for the purposes of this appeal, without any need to delve to any great depth into earlier cases, by looking only at four recent cases, all decided after the Employment Tribunal promulgated its Decision in the case at hand. We shall need to make some passing references to some earlier cases than these four but, in large part, insofar as the earlier cases are still relevant, their conclusions are repeated in the four cases which we shall mention. The four cases are Francisco Hernandez Vidal S.A. -v- Gomez Perez and associated cases [1999] IRLR 132 ECJ decided on the 10th December 1998; Sanchez Hidalgo and others -v- Aser and one associated case [1999] IRLR 136 ECJ also decided on the 10th December 1998 and by the same Judges who decided Vidal; ECM (Vehicle Delivery Service) Ltd -v- Cox [1999] ICR 1162 C.A. decided on the 22nd July 1999 and to which we have already referred; and Allen and others -v- Amalgamated Construction Co. Ltd. [2000] IRLR 119 ECJ decided on the 2nd December 1999.
10. From those four cases we distil the following. We shall attempt, although it is not always a clear distinction, to divide considerations between those going to whether there is an undertaking and those, if there is an undertaking, going to whether it has been transferred. The paragraph numbers we give are references to the numbering in the IRLR reports of the ECJ's judgments. Thus:

(i) As to whether there is an undertaking, there needs to be found a stable economic entity whose activity is not limited to performing one specific works contract, an organised grouping of persons and of assets enabling (or facilitating) the exercise of an economic activity which pursues a specific objective - Sanchez Hidalgo paragraph 25; Allen paragraph 24 and Vidal para 6 (which, confusingly, places the reference to "an economic activity" a little differently). It has been held that the reference to "one specific works contract" is to be restricted to a contract for building works - see Argyll Training infra EAT at paras 14-19.

(ii) In order to be such an undertaking it must be sufficiently structured and autonomous but will not necessarily have significant assets, tangible or intangible - Vidal paragraph 27; Sanchez Hidalgo paragraph 26.

(iii) In certain sectors such as cleaning and surveillance the assets are often reduced to their most basic and the activity is essentially based on manpower - Sanchez Hidalgo paragraph 26.

(iv) An organised grouping of wage-earners who are specifically and permanently assigned to a common task may in the absence of other factors of production, amount to an economic entity - Vidal paragraph 27; Sanchez Hidalgo paragraph 26.

(v) An activity of itself is not an entity; the identity of an entity emerges from other factors such as its workforce, management staff, the way in which its work is organised, its operating methods and, where appropriate, the operational resources available to it - Vidal paragraph 30; Sanchez Hidalgo paragraph 30; Allen paragraph 27.

11. As for whether there has been a transfer:-

(i) As to whether there is any relevant sense a transfer, the decisive criterion for establishing the existence of a transfer is whether the entity in question retains its identity, as indicated, inter alia, by the fact that its operation is actually continued or resumed - Vidal paragraph 22 and the case there cited; Spijkers -v- Gebrobroeders Benedik Abattoir C.V. [1986] ECR 1119 ECJ; Schmidt -v- Spar-und Leihkasse [1994] IRLR 302 ECJ para 17; Sanchez Hidalgo paragraph 21; Allen paragraph 23.

(ii) In a labour intensive sector it is to be recognised that an entity is capable of maintaining its identity after it has been transferred where the new employer does not merely pursue the activity in question but also takes over a major part, in terms of their numbers and skills, of the employees specially assigned by his predecessors to that task. That follows from the fact that in certain labour intensive sectors a group of workers engaged in the joint activity on a permanent basis may constitute an economic entity - Sanchez Hidalgo paragraph 32.

(iii) In considering whether the conditions for existence of a transfer are met it is necessary to consider all the factors characterising the transaction in question but each is a single factor and none is to be considered in isolation - Vidal paragraph 29; Sanchez Hidalgo paragraph 29; Allen paragraph 26. However, whilst no authority so holds, it may, presumably, not be an error of law to consider "the decisive criterion" in (i) above in isolation; that, surely, is an aspect of its being "decisive", although, as one sees from the "inter alia" in (i) above, "the decisive criterion" is not itself said to depend on a single factor.

(iv) Amongst the matters thus falling for consideration are the type of undertaking, whether or not its tangible assets are transferred, the value of its intangible assets at the time of transfer, whether or not the majority of its employees are taken over by the new company, whether or not its customers are transferred, the degree of similarity between the activities carried on before and after the transfer, and the period, if any, in which they are suspended - Sanchez Hidalgo paragraph 29; Allen paragraph 26.

(v) In determining whether or not there has been a transfer, account has to be taken, inter alia, of the type of undertaking or business in issue, and the degree of importance to be attached to the several criteria will necessarily vary according to the activity carried on - Vidal paragraph 31; Sanchez Hidalgo paragraph 31; Allen paragraph 28.

(vi) Where an economic entity is able to function without any significant tangible or intangible assets, the maintenance of its identity following the transaction being examined cannot logically depend on the transfer of such assets - Vidal paragraph 31; Sanchez Hidalgo paragraph 31; Allen paragraph 28.

(vii) Even where assets are owned and are required to run the undertaking, the fact that they do not pass does not preclude a transfer - Allen paragraph 30.

(viii) Where maintenance work is carried out by a cleaning firm and then next by the owner of the premises concerned, that mere fact does not justify the conclusion that there has been a transfer - Vidal paragraph 35.

(ix) More broadly, the mere fact that the service provided by the old and new undertaking providing a contracted-out service or the old and new contract-holder are similar does not justify the conclusion that there has been a transfer of an economic entity between predecessor and successor - Sanchez Hidalgo paragraph 30.

(x) The absence of any contractual link between transferor and transferee may be evidence that there has been no relevant transfer but it is certainly not conclusive as there is no need for any such direct contractual relationship Sanchez Hidalgo paragraphs 22 and 23.

(xi) When no employees are transferred, the reasons why that is the case can be relevant as to whether or not there was a transfer - ECM page 1169 e-f.

(xii) The fact that the work is performed continuously with no interruption or change in the manner or performance is a normal feature of transfers of undertakings but there is no particular importance to be attached to a gap between the end of the work by one sub-contractor and the start by the successor - Allen paragraphs  32-33.

12. More generally the cases also show:-

(i) The necessary factual appraisal is to be made by the National Court - ECM page 1168 e; Allen paragraph 28.

(ii) The directive applies where, following the transfer, there is a change in the natural person responsible for the carrying on of the business who, by virtue of that fact, incurs the obligation of an employer vis-a-vis the employees of the undertaking, regardless of whether or not ownership of the undertaking is transferred - Allen paragraph 16.

(iii) The aim of the Directive is to ensure continuity of employment relationships within the economic entity irrespective of any change of ownership - Allen paragraph 23 - and our domestic law illustrates how readily the Courts will adopt a purposive construction to counter avoidance - see Lord Oliver's speech in Litster -v- Forth Dry Dock Co. Ltd [1990] 1 AC 546 at 562f- 563c.

13. Looking, then, to the Chairman's approach on the law, he regarded Suzen as representing a change in contrast with earlier European Court of Justice and Court of Appeal cases or at least with the way in which they had previously been commonly understood. In his paragraph 17 he says:-

"There are practical problems facing any contractor now. An important question is whether there is an obligation to take over an existing work force. The acquisition of the work force has itself become a significant feature of a transfer of an undertaking. Thus the answer to a contractor is that it depends on whether he is going to take over the work force and in fact does so."

It is a puzzling paragraph. In the first sentence the word "now" would seem, in context, to be referring to the state of things post-Suzen. The expression "The acquisition of the workforce has itself become a significant feature" also seems to refer to the post-Suzen situation but is puzzling because it is plain that the acquisition of the workforce was a significant feature before Suzen as well as being so after Suzen. Moreover, in the expression "Thus the answer to a contractor is it depends on whether he is going to take over the workforce ...." the "it" would seem to be whether there was or was not a relevant transfer, and the opening words "Thus the answer ... is" would seem to make that single factor (one other than "the decisive criterion") determinative of the whole question of whether or not there was a relevant transfer.

14. Both Mr Langstaff and Mr Napier argue that that offends the notion that the fact-finding Court has to look at all necessary factors and they add that if too much weight is given to the transferor's staff being not engaged after the putative transfer, that would allow a transferee, especially in cases where the workforce is not of a highly specialised character, voluntarily to escape what would otherwise be its obligations under TUPE and the Acquired Rights Directive. Such a result, they say, would surely be in conflict with the Acquired Rights Directive and in breach of the purposive approach to construction which Tribunals are enjoined to adopt. They adopt the obiter dicta as to jeopardy to the basic objective of the directive to be found in RCO supra at paragraph 29. They acknowledge that the Chairman in terms said that the acquisition of an existing workforce was only a factor but, they say, his paragraph 17 then appears to make it decisive.
15. We accept that the emphasis which the Chairman gives to retention of the workforce does conflict with the European Court of Justice's view that all facts are required to be taken into account and that each is to be no more than a single factor with none to be considered in isolation. If none is to be considered in isolation, it must follow (the "decisive criterion" apart) that none is itself to be determinative. Whilst the Chairman does not consider the fact that none of the Onyx 14 transferred to Brewer as a factor in isolation, he does seem, in his paragraph 17, to take it to be, in itself, a decisive consideration and that, as it seems to us, is an error of law. We would, though, wish to emphasise that the Chairman had reason to take the answer given by the ECJ to the questions raised in Suzen to be the most up-to-date guidance on the subject. Had he been able to have had ECM, for example, cited to him, in which there was a transfer even though not a single employee and no assets went over, he may very well not have held as he did.
16. Another criticism raised by the Appellants is that the Chairman's approach, in the light of the later cases, was, in effect, incomplete or simplistic. He said:-

"Brewer has not taken on any premises or any intangible assets. They have simply been awarded a new contract."

A little later he says:-

"Having regard to the fact that all that has occurred in the present case is that the contract with Onyx has been terminated by expiry and there has been a new contract with Brewer ....."

Mr Langstaff and Miss Eady, together with Mr Napier, argue that there was here an economic entity, an organised grouping of wage earners who were specifically and permanently assigned to a common task, namely to the Responsive Maintenance Contract, which they performed. They say that that undertaking or entity ceased to be in the hands of Onyx but that the work carried on without diminution for the same client, the Council, in respect of the same premises, the Council's housing stock, and in very much the same way as it had done when it was done by Onyx. It may be - it is not for us to speculate - that the former system of payment by reference to a Bill of Quantity as referred to by the Tribunal continued much as before. The Tribunal described it as follows:-

"A Bill of Quantity had been drawn up by the Council giving the requirements and work under the Responsive Maintenance Contract was charged in accordance with the Bill of Quantities."

It may also be that the form of instruction from the Council to the current contractor remained as it had been in Onyx's time; that system was described by the Employment Tribunal as:-

"The work was carried out by Onyx on instructions which arrived by E-mail from the Council following reports by the tenants."

17. The Appellants' argument here is in effect put in two ways. Firstly, they say that if the Chairman had approached the question as, they say, he should have done, by first looking to see if there was a relevant entity, he would have then focused on what the entity consisted of and would have then concluded there was a transfer of it. At the very least, says Mr Langstaff, without that form of analysis the Tribunal's decision that there was no transfer is unsafe. Alternatively or in addition, Mr Langstaff's argument is that although it is clearly a requirement in TUPE cases that a proper assessment is first made as to whether or not there is an economic entity (and, if so, what the salient constituent elements of that entity are) it is impossible to discern the Chairman's reasoning and conclusions in this area. The Appellants, asserts Mr Langstaff, are unable to understand why the Chairman went on to reach the conclusions that he did on the question on whether or not the entity in question was the subject of a transfer. In that respect, argue the Appellants, there was a failure to satisfy the well-known test in Meek -v- City of Birmingham.
18. As for there being a separate question as to the presence or not of an appropriate entity, in Whitewater Leisure Management Ltd -v- Barnes and others [2000] ICR 1049 EAT at 1053 the EAT, presided over by Burton J, said:-

"6. It is quite plain that there are two questions to be asked and answered ......"

and then, after referring to Betts -v- Brintel [1997] ICR 792 at 798, where Kennedy LJ identified the two questions arising in that case, the EAT continued:-

"Thus Lord Johnston in The Highland Council -v- Walker (unreported) 25th November 1997, described the "two relevant and quite separate questions", namely:

"Whether or not there was an identifiable business entity constituting an entity within the meaning of the Regulations; and, secondly, assuming such could be determined, whether or not there was a relevant transfer"

7. It seems to us quite clear that a tribunal should consider these questions separately and in turn, for different considerations relate to each."

19. We respectfully agree, and whilst we do not say that it is invariably an error of law not to raise those two questions as separate questions or to fail to deal with them in that order, a Tribunal which so fails runs a real risk of error. There will, of course, be cases where one or other of the answers is so obvious that one barely needs to frame the question but we cannot see this to be such a case. If the law is as we have described it in paragraph 10 (i) to (v) above and if the answer by the ECJ to the questions put to it in Suzen are not invariably be taken to be determinative, then it should have been clear that whether or not there was here an undertaking and, if there was, of what it consisted, were very material questions that required careful answers. Equally if there was such an entity, if the ECJ's answers in Suzen are not invariably decisive and, if the law is as we have described it in paragraph 11 (i), (iii) (iv) (v), (vi), (vii), (x), and (xi) and in paragraph 12 (ii) and (iii), the question of whether there was a transfer also required careful attention.
20. As for the answers given by the Chairman in the present case, the Chairman does say:-

"I still have to fall back on the question of whether an economic entity i.e. a going concern, has been transferred from Onyx to Brewer."

But the answer given to that question could very well have been different if the Chairman had first looked to the question of whether there was a stable economic entity in Onyx's hands and precisely what it was. To frame the point as he there does elides that first stage. That passage, moreover, confuses a going concern with an autonomous and stable economic entity in a manner that may itself be in error.

21. In another passage the Tribunal simply said:-

"What has occurred comes well within the European Court's decision in Suzen that there has merely been the loss of a service contract to a competitor which by itself cannot indicate the existence of a transfer."

But that passage, whilst not inconsistent with the law as we have described it in paragraph 11(viii) and (ix) above, depends for its applicability on the word "merely". Where the "customer" is the same, i.e. the Council, where, at one further remove, the customer's tenants are the same, where the premises worked on and the type of works done are the same and, if such were the case, if the systems of payment and of call-out remain the same, it was not a case where it was plain that there had "merely" been the loss of a service contract to a competitor.

22. Mr Pitt-Payne argues that if the Tribunal had looked to see if there was an entity referable only to the RMC it would necessarily have concluded that there was not. However, when we recognise how little is required of a stable economic entity, as is illustrated in Schmidt supra, we cannot accept that view - and see Argyll Training Ltd -v- Sinclair and Anor [2000] IRLR 630 EAT at para 16. After all, there does appear to have been in Onyx's hands an organised grouping of persons which had the use of Council assets and which enabled the exercise of an economic activity pursuing a specific objective, the performance of the RMC. Moreover, as to whether there was a transfer in terms of the continuing job of the responsive maintenance of the Council's stock of rented properties, that work was plainly continued.
23. In our judgment this was a case where it was necessary in law to ask each of the two questions we have described. The first - as to an undertaking - seems more to have been assumed than raised and answered and, whilst it could, at first glance, be taken to have been in the Appellants' favour for the Tribunal to have assumed a transfer, that is not necessarily the case because where there is a simple assumption a Tribunal can be diverted from identifying exactly what the undertaking in the case before it truly is and can fail to remind itself of how relatively little - see Schmidt supra - is required of one. The error in not looking into and then spelling out precisely what the entity is may then engender error in the answer to the second question - as to transfer - because, without knowing exactly what the relevant entity is, a Tribunal is likely to mislead itself as to whether that entity has been transferred.
24. We hold that there was here error of law. The two separate questions were required to be raised and answered and it cannot be seen that they were.
25. Mr Langstaff and Miss Eady next complained that the Chairman failed to examine why it was that Brewer did not take on any of the Onyx 14. We entirely see that if the intent in not employing them was to escape the ordinary incidence of the Acquired Rights Directive and the TUPE Regulations that would have been a relevant factor that could have told against the transferee, see ECM supra p 1169 e-f. But if that was not alleged, if no party brought up the subject and no evidence was led on it one way or another, ought the Tribunal to be regarded as erring in law for not itself examining what Brewer's intention was? We have a transcript of the evidence below which the Chairman has agreed to be an accurate note. However, as Mr Pitt- Payne avers, it does not show any investigation into the reason why Brewer did not take on any of the Onyx 14 (although Brewer did take on 4 others) and certainly shows no hint of a suggestion that Brewer avoided taking on any of the 14 in order to avoid the impact of the legislation. Whilst some examination of the issue would have been desirable, in the circumstances we find no error of law in the Chairman not having himself investigated Brewer's reasons. Indeed, given that the relevance of intention or motive did not emerge, at the earliest, until ECM was reported in the EAT (in August 1998, well after the hearing before the Chairman in May 1998) it would have required super-human foresight on the Chairman's part for him, unbidden, to have investigated Brewer's reason in the way it is now argued that he erred in law in failing to do. We find no error of law under this heading.
26. Whilst we cannot over-emphasise that the Chairman did not have the advantage of the 4 leading cases, all decided after his decision, to which we have chiefly referred, we do hold there to have been error of law. However, we are far from saying that the facts here were such that the only conclusion which an Employment Tribunal could properly have reached was that there had been a relevant transfer. Accordingly, we remit the matter to the Employment Tribunal. We remit to a panel of three which may or may not include the Chairman, Mr Walton, at the discretion of the Regional Chairman, that discretion to be exercised on the basis that it would, in our view, be convenient for Mr Walton to be the Chairman but that if, in the Regional Chairman's view, his being so would be likely materially to delay a hearing, then the better course would be not to await Mr Walton's availability. At the remitted hearing it will be open to each side to rely on fresh evidence or on the notes of evidence that are agreed already or both. It may be prudent that there should first be a Directions Hearing at the Employment Tribunal but we leave to the parties whether either of them feels that it is desirable to apply for one. We allow the appeal and remit the case in the manner which we have indicated. We refuse leave to appeal.