Appeal No. UKEAT/0558/11/CEA

EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

		At the Tribunal
		On 13 July 2012

Before
HIS HONOUR JUDGE PETER CLARK
(SITTING ALONE)

MR G HOLT	APPELLANT

EB SECURITY LTD - IN LIQUIDATION	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	Written Submissions	
For the Respondent	Debarred	

SUMMARY
JURISDICTIONAL POINTS – Continuity of employment

Section 212(3)(b) ERA – temporary cessation of employment – Bentley Engineering v Crown [1976] ICR 225 considered and applied.  Appeal by Claimant allowed.  Continuity preserved.

HIS HONOUR JUDGE PETER CLARK
Introduction
1.	This case has been proceeding in the Birmingham Employment Tribunal.  The Claimant is Mr Gary Holt.  The Respondent, EB Security Ltd (in liquidation) has taken no part in these appeal proceedings and was debarred from defending the appeal by an order of the Deputy Registrar seal dated 23 March 2012.  The Claimant has indicated that he will not be attending today but instead relies on written representations and I have had the advantage of reading his skeleton argument dated 13 June.  That does not, of course, necessarily mean that this appeal brought by the Claimant will succeed.

Background
2.	The material issue was whether the Claimant had sufficient continuous service to bring a claim of “ordinary” unfair dismissal against the Respondent; he needs one year’s service.  That issue was first considered by Employment Judge Tucker, sitting alone, at a PHR on 13 May 2010.  She held that he did not, on the basis that his original employment with Prosec International Ltd (“Prosec”) at a public house commencing in July 2007 terminated with that employer on 3 March 2009; he was then not employed under a contract of employment until his employment with the Respondent commenced on 16 March 2009.  His employment with the Respondent ended on 11 January 2010.  The Employment Judge found that Prosec and the Respondent were associated employers for the purposes of sections 218(6) and 231 of the Employment Rights Act 1996 (ERA).  On those facts, but without reference to section 212(3) ERA, the Employment Judge held that the gap in employment between 3 and 16 March 2009 was fatal to the Claimant’s contention that he had the necessary qualifying continuous service from July 2007 until January 2010.  But for that gap he would be able to count the whole of his service with the two associated employers; see section 218(6).  Reasons for that decision (“the first decision”) were promulgated on 10 June 2011.

3.	Against the first decision the Claimant appealed (UKEAT/0603/10/CEA) (“the first appeal”).  The full hearing of that appeal came before HHJ McMullen QC on 2 March 2011.  I note from the Judgment given on that day that the Respondent is described as “EB Security Services”.  I shall return to the identity of the Respondent later in this Judgment.  Judge McMullen allowed the Claimant’s appeal and remitted the case to the same Employment Judge for further consideration.  The precise scope of the remission, a point considered by the Court of Appeal in Aparu v Iceland Frozen Foods Ltd (No. 2) [2000] ICR 341, is a little problematic.  The EAT order seal dated 3 March 2011 reads, so far as is material:

“The Tribunal orders that the Appeal be allowed and remitted to the same Employment Judge for her to determine whether continuity of employment is afforded to the Claimant under S212(3)(c) of the Employment Rights Act 1996.”

4.	Section 212(3) reads, so far as is material:

“(3) […] any week (not within subsection (1)) during the whole or part of which an employee is— […]
(b) absent from work on account of a temporary cessation of work, or
(c) absent from work in circumstances such that, by arrangement or custom, he is regarded as continuing in the employment of his employer for any purpose […]
counts in computing the employee’s period of employment.”

5.	In the Judge’s summary he said:

“But there was no consideration [by the Employment Judge] of s 212(3) viz whether the gap was pursuant to an arrangement.”

6.	A reference, it may be thought, to section 212(3)(c), as the order indicated; however, looking at the Judgment itself, at paragraph 16 Judge McMullen observes:

“While [the Employment Judge] was already engaged in section 212(1), it is not difficult to look down to 212(3), and an argument should have been addressed as to whether, looking back from the end of the second contract, there was a temporary cessation of work by an arrangement made with the employer.  The authority on this is Ford v Warwickshire County Council [1983] IRLR 126 HL.”

7.	And at paragraph 19 he added, under the heading “Result”:

“So there will simply be remission of the one question as to whether, guided by Ford v Warwickshire Council, and looking from the vantage point of the cessation of the second contract, there was an arrangement such as would afford continuity of employment to the Claimant.”

8.	It therefore seems to me that Judge McMullen has elided section 212(3)(b), cessation, and (c), arrangement, requiring consideration of both provisions.  At all events, on remission Employment Judge Tucker appears to have focussed on section 212(3)(b); in my judgment, she was right to do so.  The remission took place on written representations; no oral argument was heard.

9.	By her second decision, promulgated with Reasons on 3 August 2011, she again concluded that the Claimant had failed to establish sufficient continuity of service.  Again the Claimant appealed.  Judge McMullen directed on the paper sift that it should proceed to a full hearing; that is the hearing now before me.

10.	The Judge’s first reason for holding that continuity was broken during the relevant period, 3‑16 March 2009 (Reasons, paragraph 10), was that the Claimant’s employment with Prosec ended with the closure of the public house.  That business then ceased; however, the cessation was not temporary because the Claimant’s work with Prosec at the public house never resumed.  Instead, he secured employment with an associated employer in a different role entirely, thus the reason for his absence was not a temporary cessation of work; there was a permanent cessation of work.

11.	Secondly (paragraph 12), she considered whether the word “work” in section 212(3)(b) refers to any work available for the Claimant to do under the second contract with the same or any associated employer and rejected that construction, having considered the House of Lords decision in Ford and Hussain v Acorn Independent College Ltd [2011] IRLR 463 (EAT, Judge McMullen presiding), both of which cases are referred to by Judge McMullen in the first appeal Judgment together with another case on which he sat, Da Silva v Composite Moulding and Design Ltd [2008] All ER (D) 157; UKEAT/0241/08.  

12.	Both Ford and Hussain were cases involving teachers whose contracts ended at the end of the summer term and restarted in the autumn term with the same employer.  The outcome in both cases was, looking backwards from the end of the final contract, that the holiday breaks amounted to a temporary cessation preserving continuity of employment.  I note that Employment Judge Tucker was not referred to, and did not consider, the old case of Bentley Engineering Co Ltd v Crown and Anor [1976] ICR 225 (QBD, Phillips J), decided during the interregnum between the National Industrial Relations Court and the Employment Appeal Tribunal.  In that case the two Claimants, Messrs Crown and Miller, were employed by company A until both were made redundant in 1963.  Two years and 21 months later respectively, the Claimants obtained fresh employment with the Respondent; A and the Respondent were associated employers.  Phillips J held on appeal that the Industrial Tribunal was entitled to find that the Claimants could rely on the predecessor to section 212(3)(b) to preserve continuity between the two employments.

13.	Crown is the subject of criticism by the editors of Harvey on Industrial Relations and Employment Law; see volume 2H, paragraphs 188‑189.  It is there suggested that unless the subsequent associated employer resumed the operations performed by the first employer, in which the Claimant was engaged, there is no temporary cessation of work.  So far as I am aware, Crown has never been disapproved in the Court of Appeal; it was cited to the Court in Flack v Kodak [1986] ICR 775 but not referred to in the Judgments.  I do not share the learned editors’ doubts.  I shall adopt the approach in Crown.

14.	At page 228H‑229A, Phillips J posed three questions: (1) was there a cessation of the employee’s work or job; (2) was the employee absent on account of that cessation; and (3) was the cessation a temporary one?  Answering those three questions on the facts of the present case:
(1)  There was a cessation of the Claimant’s work/job; it came to an end when the public house closed.
(2)  Was he absent on account of that cessation?  Answer: yes; he was not employed under a contract of employment between 3 and 16 March.
(3)  Was the cessation temporary?  Yes, it was, looking back from the vantage point of his employment with the Respondent associated employer; the gap was two weeks.

Conclusion
15.	In these circumstances I shall allow this appeal and declare that the Claimant was continuously employed by the Respondent from July 2007 until January 2010.  Accordingly, the Tribunal has jurisdiction to entertain his complaint of unfair dismissal.

Addendum
16.	Finally, I return to the identity of the Respondent.  This is considered by the Employment Judge at paragraph 13 of her second decision.  She notes that in the EAT proceedings before Judge McMullen the Respondent was referred to simply as “EB Security Services”.  Having investigated the matter, she could not find any limited company of that name.  She heard no oral submissions on that occasion, and therefore the Claimant was not able to assist her.

17.	In his skeleton argument for the purposes of this appeal hearing the Claimant goes into some detail about the various companies within the group, which are controlled by a Mr Richford. What he seeks at this late stage is an amendment whereby EB Monitoring UK Ltd, which I assume is a solvent company, should be substituted for EB Security Ltd (in liquidation).  True it is by reference to the cases that the identity of a Respondent can be corrected at any stage of the proceedings; however, I have seen no material that suggests to me that the wrong Respondent was identified at the outset.  It is clear from the Tribunal’s first decision, when both parties were present, and before the company went into liquidation that the relevant associated employers were agreed to be Prosec International Ltd and EB Security Ltd.

18.	In these circumstances, in so far as there is an application by the Claimant to alter the identity of the Respondent, I reject that application.