Appeal No.	 EAT/410/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 17 April 2000

Before
HIS HONOUR JUDGE PETER CLARK
MR J R CROSBY
LORD GLADWIN OF CLEE CBE JP

IDEAL CLEANING CONTRACTORS LTD	APPELLANT

1.	ISS SERVISYSTEMS LTD
2.	MRS M V MOGG AND OTHERS	RESPONDENTS

Transcript of Proceedings

JUDGMENT

FULL HEARING
Revised

	APPEARANCES

For the Appellant	MR M WEST
(Representative)	
For the Respondents	1st Respondents
MR J ASHWORTH
(of Counsel)
SBJ Employment & Safety Services Ltd
3rd Floor
4 Copthall House
Station Square
Coventry  CV1 2FL

2nd Respondent
MR D BROWN
(of Counsel)
Messrs Pattinson & Brewer
30 Great James Street
London  WC1N 3HA	

JUDGE CLARK

1	The preliminary issue before the Employment Tribunal sitting at Liverpool on 20 January 2000 in this case was whether or not there had been a relevant transfer of part of the undertaking of ISS Servisystems Ltd (ISS) in which the Applicants were employed to Ideal Cleaning Contractors Ltd (Ideal) within the meaning of regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE).  By a decision, promulgated with extended reasons on 16 February 2000 the Employment Tribunal found that there was a relevant transfer.  Against that decision Ideal now appeal.

The Facts
2	These we take from the Employment Tribunal’s reasons.  Until 22 March 1999 (the relevant date) each of the Applicants was employed by ISS as a cleaner at the Halton Lea Shopping Centre, Runcorn, pursuant to a contract made between the owners of the Shopping Centre (the client) and ISS.

3	Following a tendering exercise ISS lost and Ideal won the contract for providing cleaning services to the client.

4	Prior to the relevant date ISS employed 21 cleaners dedicated to the Halton Lea Contract, some of them part-time employees.

5	After the relevant date it was accepted by Ideal that the cleaning requirement in the Shopping Centre did not change but it was contended that the methodology would change.  The times at which the cleaning work was to be done would change; more evening work was envisaged.  The number of part-time employees were to be reduced.  Different equipment was to be used and the cleaning work was to be extended to cover a new retail park, which the client had constructed. 

6	None of the equipment used by ISS was taken over by Ideal.  They engaged only 3 of the 21 employees assigned to the cleaning contract by ISS.

Employment Tribunal Decision
7	The Employment Tribunal considered the factual circumstance in the round.  They found that the alteration in timing of the work and the change in the number of employees doing that work did not represent a “massive change” in the operation carried out by ISS.  The same work, substantially, was being done after the relevant date as before.  The absence of any transfer of any equipment between ISS and Ideal, and the limited number of ISS employees taken on by Ideal did not cause them to find that what was being carried on was simply an economic activity.  Nor was the additional retail park cleaning work sufficient to indicate that Ideal had not taken on an economic entity operated by ISS.  That is what was transferred, according to the Employment Tribunal here and accordingly there had been a relevant transfer.

Relevant Transfer
8	We do not propose to rehearse the torturous path trodden by the European Court of Justice and English Court of Appeal in seeking to determine what is a relevant transfer under Regulation 3, designed to implement the Acquired Rights Directive 77/187.  We shall go straight to the latest work from the Court of Appeal; ECM (Vehicle Delivery Service) Ltd –v- Cox [1999] IRLR 559.

9	There, the Applicants were employed by a vehicle delivery company, Axial as drivers.  They worked on a contract made between Axial and VAG Ltd, delivering motor cars around the country which had been imported from Germany through the docks at Grimsby.

10	Axial lost the VAG delivery contract to ECM.  When ECM took over the contract the site from which the work was carried out was changed, a different system of delivery was introduced and the arrangements for administering the contract were altered.  None of the employees of Axial, dedicated to the VAG contract were taken on by ECM.

11	The employees brought complaints of unfair dismissal against ECM.  They succeeded before the Employment Tribunal.  That decision was upheld by the Employment Appeal Tribunal Morison J presiding.  On further appeal by ECM, the Court of Appeal upheld the decisions below.  In giving the leading judgment of the court Mummery LJ observed (paragraph 23) that, contrary to the impression conveyed by the court in Betts –v- Brintel Helicopters [1997] IRLR 361, the European Court of Justice in Suzen [1997] IRLR 255 had not departed from its earlier rulings in Spykers [1986] ECR 1119 and Schmidt [1994] IRLR 302.  It is for the National Court to make the “necessary factual appraisal” in order to decide whether there was a relevant transfer in the light of the criteria laid down by the European Court of Justice in Spykers.

12	It held that the Employment Tribunal in ECM had carried out a full factual appraisal, applied the correct criteria and concluded permissibly that despite changes in the operation for the delivery of cars under the VAG contract, there was a continuation in the hands of ECM of the existence of the discrete economic entity previously carried on by Axial.

The Appeal
13	Mr West on behalf of Ideal submits that this was a labour intensive contract; that the Tribunals findings of fact indicated that there was here no more than a bare contract; that is an activity which was carried on by Ideal in succession to ISS.  In relation to the case of ECM he submits that that should be confined to its own facts.  In particular the findings by the Employment Tribunal that in that case the putative transferee had declined to take on any of the transferor’s rules employees simply in order to avoid the effects of the Transfer Regulations.

14	He drew our attention to a decision of this Tribunal on which I sat, NorthEast Lincolnshire Council –v- Beck EAT 1362/97 (unreported) judgment delivered on 21 January 1999. In that case we interfered with an Employment Tribunal decision, on the question of whether or not a relevant transfer had taken place.  It has to be said that that case was decided on the basis of the law as it appeared to this Tribunal at that time.  The law has been further revealed to us by the Court of Appeal in ECM –v- Cox and we shall endeavour to follow that guidance in the present case.

15	Finally Mr West submits that unless a majority of the workforce are taken on by the putative transferee in there will not be a relevant transfer in a labour intensive situation, subject to the factual circumstances of the kind that arose in ECM.  In response Mr Brown and Mr Ashworth, with commendable brevity, submit that this Employment Tribunal carried out the necessary exercise laid down by the European Court in Spykers.  They took into account all relevant matters and reached a conclusion which, unless it can be shown to be perverse, is one with which will should not and cannot in law interfere.

Conclusion
16	We prefer the submissions made by Mr Brown and Mr Ashworth.  It seems to us, consistent with Mummery L J’s judgment in ECM, that there are no grounds in law for us to interfere with the assessment made by the Liverpool Employment Tribunal in this case.  In these circumstances we shall dismiss this appeal.