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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Brooks v. Smith Corona (UK) Ltd Direct Sales Ltd 2000 Limited [2002] UKEAT 486_00_2501 (25 January 2002) URL: http://www.bailii.org/uk/cases/UKEAT/2002/486_00_2501.html Cite as: [2002] UKEAT 486__2501, [2002] UKEAT 486_00_2501

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APPEARANCES

 

For the Appellant	MR PHILIP THORNTON Instructed By: Messrs Bird & Bird 90 Fetter Lane London EC4A 1JP
For the First Respondent For the Second Respondent	MR IAN GATT Instructed By: Messrs Allen & Overy Solicitors One New Change London EC4M 9QQ MR SIMON LIVINGSTONE Instructed By: Messrs Taylor Walton Solicitors 36-44 Alma Street Luton Bedfordshire LU1 2PL


 


MR JUSTICE WALL:

1. This is an appeal by Trevor Brooks (the Appellant) against the reserved decision of the Employment Tribunal sitting at Bedford on 6 and 7 December 1999 and promulgated on 8 March 2000. The Respondents to the appeal are (1) Smith Corona (UK) Limited (the First Respondent) and (2) Direct Sales (2000) Limited (the Second Respondent).
2. The majority decision of the Tribunal was that the Appellant was dismissed by the First Respondent by reason of redundancy and that his dismissal was fair. The minority decision of the Tribunal was that the Appellant was unfairly dismissed by the Second Respondent. An unusual feature of the case is that the Members were in the majority, and the Chairman in the minority.

The facts

3. In order to explain how this unusual state of affairs came about, we need to set out the facts. We take them largely from the Tribunal's reasons. The Appellant was the Managing Director of the First Respondent. In about January 1998 the First Respondent's parent company (Smith Corona International BV (hereinafter called "SCI") became concerned at the level of its trading losses, and began to consider ways of reducing them. By July 1998 SCI had decided that it would have to close down its operation in the United Kingdom and sell its products in the UK through a distributor. The plan was for the First Respondent to close its offices and remain in existence only for tax purposes and to collect outstanding debts. Its sales function was to be transferred to the distributor.
4. The Appellant was interested in becoming SCI's distributor in the UK. He produced a "distributor's plan" and took legal advice. Between September and December 1998 the First Respondent considered the viability of certain other potential distributors, but continued to discuss the closure of its UK sales operation with the Appellant, who was responsible, as the Managing Director of the First Respondent, for dealing with staff redundancies.
5. On 8 December 1998 there was a meeting attended by the Appellant, the President and the Financial Director of the Smith Corona Corporation, the Managing Director of the European Division of SCI (Mr. Hendrikus Meijer) and Mr Sugden, who was then the First Respondent's Financial Director. At this meeting it was agreed in principle that the Appellant would purchase the First Respondent's distributorship and stock, and that the First Respondent would pay him one year's salary to assist him with his start up costs.
6. A distribution agreement was prepared in early January 1999 and handed to the Appellant at a further meeting between the Appellant, Mr Sugden and Mr Meijer on 6 or 7 January 1999. The Appellant then took steps to acquire a company through which the distributorship could trade, and he acquired the shareholding of the Second Respondent (which we understand to have been an off the shelf company) on 20 January 1999. The closure of the First Respondent's UK Sales operation was fixed for 1 March 1999.
7. However, on 8 February 1999, the Appellant told Mr Meijer that he could no longer accept the role of distributor as he had been unable to obtain the necessary funding. The reason for this was that he was engaged in divorce proceedings, and his wife had refused to sign the documents required to commit her half share of the matrimonial home as security for the advance.
8. This development caused the First Respondent severe operational difficulties, given the arrangements which had been made to wind up its UK operation. However, Mr Sugden offered to step into the breach by acquiring the Appellant's shareholding in the Second Respondent. This was confirmed at a meeting on 10 February 1999. It appears to have been agreed that the Appellant was to be a Consultant with the Second Respondent, as the Second Respondent could not afford to pay him on the same basis that he had been paid by the First Respondent. The shares in the Second Respondent were transferred to Mr Sugden and his wife on 10 February 1999, and arrangements were made between the Second Respondent and the First Respondent for the transfer of the First Respondent's sales business to the Second Respondent together with stock and office equipment. These arrangements were to take effect from 1 March 1999.
9. On 24 February 1999, a letter was sent to the Appellant terminating his employment with the First Respondent with effect from 28 February 1999, and on 1 March 1999, the transfer of the sales business to the Second Respondent took effect. The Second Respondent purchased the First Respondent's entire stock and its office equipment. It appears that three of First Respondent's eight employees transferred to the Second Respondent. They were Mr Sugden, Mr Savary and Ms Karen Dixon. For reasons which the Tribunal said were not entirely clear, the Appellant did not take up his consultancy role with the Second Respondent. The Tribunal said the reason for this seemed to be that he could not start that role until he had sorted out his dispute with the First Respondent regarding his severance payments. The majority took the view that this fact in itself helped to confirm the Appellant's belief in his own redundancy.

The Transfer of Undertakings (Protection of Employment) Regulations 1981 ( TUPE)

10. The relevant TUPE Regulations for the purposes of this case are the following. Firstly, Regulation 3(1) defines a "relevant transfer" in these words:

"3(1) Subject to the provisions of the Regulations, these Regulations apply to a transfer from one person to another of an undertaking situated immediately before the transfer in the United Kingdom or a part of one which is so situated."

Secondly, Regulation 5, which is headed Effect of relevant of transfer on contracts of employment, etc provides:

"5(1) … a relevant transfer shall not operate so as to terminate a contract of employment of any person employed by the transferor in the undertaking or part transferred for any such contract which would otherwise have been terminated by the transfer shall have effect after the transfer as if originally made between the person so employed and the transferee.

(2) Without prejudice to paragraph (1) above … on the completion of a relevant transfer -

(a) all the transferor's rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this Regulation to the transferee; and

(b) anything done before the transfer is completed by or in relation to the transferor in respect of that contract or a person employed in that undertaking or part shall be deemed to have been done by or in relation to the transferee.

(3) Any reference in paragraph (1) or paragraph (2) above to a person employed in an undertaking or part of one transferred by a relevant transfer is a reference to a person so employed immediately before the transfer, including, where the transfer is effected by a series of two or more transactions, a person so employed immediately before any of those transactions."

Finally, Regulation 8, headed Dismissal of employee because of relevant transfer provides, where material:

"8(1) Where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee shall be treated for the purposes of Part VI of the 1978 Act and Articles 20 to 41 of the 1976 Order (Unfair Dismissal) as unfairly dismissed if the transfer or a reason connected with it is the reason or principal reason for his dismissal.

(2) Where an economic, technical or organisational reason entailing changes in the workforce of either the transferor or the transferee before or after a relevant transfer is the reason or principal reason for dismissing an employee –

(a) paragraph (1) above shall not apply to his dismissal; but

(b) without prejudice to the application of section 57(3) of the 1978 Act or Article 22(10) of the 1976 Order (test of fair dismissal) the dismissal shall for the purposes of section 57(1)(b) of that Act and Article 22(1)(b) of that Order (substantial reason for dismissal) be regarded as having been for a substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held."

(The references to the section 57 of the 1978 Act" should now, of course, be to the corresponding sections in the Employment Rights Act 1976, which are in the same terms.)

The issues for the Tribunal

11. The three critical issues for the Tribunal to resolve were the following. Firstly, on the facts of the case, did TUPE apply? Secondly if TUPE applied, did the Appellant's dismissal by the First Respondent fall within the provisions of Regulation 8(1)? Thirdly, was it possible to disapply Regulation 8(1) by the application of Regulation 8(2)?
12. If Regulation 8(1) applied, it followed inevitably that the Appellant was unfairly dismissed by the Second Respondent, unless the Second Respondent could establish that the case fell within Regulation 8(2). This is because the transfer of the First Respondent's business to the Second Respondent, or a reason connected with it, was the reason or the principal reason for his dismissal. However, Regulation 8(1) can be disapplied by Regulation 8(2) where the reason or principal reason for the dismissal is an "economic, technical or organisational reason entailing changes in the workforce" (hereinafter called an "ETOR"). Where there is an ETOR, the dismissal is to be "regarded as having been for a substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held (TUPE, Regulation 8(2)(b)). To put the matter very simply: if TUPE applied in this case, the Appellant was unfairly dismissed by the Second Respondent unless the Second Respondent could establish en ETOR
13. These were the issues which divided the Tribunal,. The Chairman took the view that TUPE applied, and that there was no ETOR. It followed that the Appellant had been unfairly dismissed by the Second Respondent, which the Regulations made responsible for the consequences of the dismissal, even though it did not dismiss the Appellant. The members were of the view that the Appellant had been made redundant and that either there was no relevant transfer within Regulation 3 of TUPE; alternatively, if the Regulations applied, there was an ETOR, since the reason for the dismissal was economic.

The view of the members

14. The majority (the Members) took a pragmatic view. In their opinion, the history demonstrated that way back in 1998 the First Respondent had made the primary decision that a dramatic cost reduction exercise had to take place if the First Respondent's business in the United Kingdom was going to survive. If it could not, the operation would have to be closed down. That would mean redundancies. The plan was that the Appellant would take over. He had many months to prepare. When he failed to raise the necessary finance, one obvious option was to close down the business based in the United Kingdom. However, Mr Sugden came to the rescue. It must have been obvious to anyone with practical business experience that the Second Respondent could not stand the estimated total cost of £100,000 of employing the Appellant. The majority opinion continues:

"29 … We cannot therefore believe even if the Transfer Regulations [TUPE] apply that it is the intention, express or through case precedents, to force a company to take such an uneconomical step which thus in turn forces the demise of the company through a too heavy cost structure and high labour cost in particular. It must in logic be an underlying intention of the Regulations (if they apply here) to perpetuate a business in this particular set of circumstances for as many employees as possible. If the Regulations apply here it is axiomatic therefore that (i) the non continuance of employment for some employees in this situation (ii) is permissible by the Regulations in order to perpetuate the business as an entity. Hence the provision in the Regulations to permit economic changes in transfer situations.

30 If this provision cannot be applied in this situation the Regulations could thus act to bring about the downfall of a business and we cannot believe that this was the intention of the drafters of it in the context of the main aim of them being the protection of employment. It is plain that the exclusion of economic reasons for change was included in the Regulations in order to protect as much employment as possible but not necessarily all of it.

31 If the Regulations apply it is said in case law that economic changes in this context must 'entail' (our interpretation of this word is that it means 'unavoidably include') changes in the workforce. Change also entails (unavoidably includes) other considerations where cost reduction is required to a level where a business can survive rather than fold. The whole of the cost structure of a business requires examination if costs savings (ie economies) are to be made. The labour cost factor is only one of those cost factors. In that it was considered in order to wipe out £600,000 of losses, is as unavoidable as it would be in any similar situation. [The Appellant's] redundancy, albeit confused by his own objectives to take over the business and Mr Sugden's eventual take-over, was for economic reasons. There had to be redundancies and a 'white knight' entrance at the last minute does not change that economic reason.

32 If the "white knight" entrance did change the ball game to the effect claimed by the Appellant, it is plain that the Regulations would permit collusion between those involved in such take-overs to effect liabilities (in this case) on the Respondents. Again, we cannot believe that such collusion can be provided for in legislation."

15. On this basis, the members came to the conclusion that the Appellant's dismissal was because he was being made redundant, but that if TUPE applied the reason was substantially economic, and was thus an ETOR within Regulation 8(2) of the 1981 Regulations. It followed, applying Regulation 8(2)(b) that the dismissal was for a substantial reason of a kind as to justify the dismissal of the Appellant or redundancy, and thus not unfair. The majority reasoned that the Appellant's dismissal would have occurred whether the transfer had happened or not, and they expressed the opinion that it was inequitable for the Appellant to be able to make a claim in circumstances in which he was a prime mover; and from which he withdrew of his own volition.
16. The majority also expressed the opinion that for the Appellant to succeed would drive a "coach and horses" through the intention that employment law was partially based on equity, and would set up a legally based framework for the manipulation of the law to an employee's own compensatory advantage, in collusion with another. The strong underlying motif of the majority's decision appears to have been that it was unjust for the Appellant to seek compensation when the difficult financial circumstances of the First Respondent had been brought about (inter alia) by his conduct of the First Respondent's business (it was substantially in debt) and his failure to finance its acquisition by the Second Respondent. To visit that failure on the Second Respondent, to the benefit of the Appellant, whom they described as a "white knight", was palpably unfair.

The view of the Chairman

17. The minority view, held by the Chairman, was very simple. The Regulations applied. Accordingly, there was a relevant transfer, and the Appellant's dismissal occurred because of the transfer. That being so, as night follows day, the dismissal was automatically unfair unless there was an ETOR, and the dismissal was fair pursuant to Section 98(4) of the Employment Rights Act 1996. In the Chairman's judgment, there was no ETOR. The Chairman expressed himself in this way:

"38 Clearly if the dismissal was a reason connected with the transfer and there is no economic, technical or organisational reason under Regulation 8(2) of the TUPE Regulations, liability for the dismissal clearly rests with the Second Respondent. If the dismissal was not connected with the transfer or, if it was, but there was an economic, technical or organisational reason, the dismissal is potentially fair and the liability, if any, rests with the First Respondent. …

39 The law on economic, technical and organisational changes must entail a change in the workforce and that is clear from Regulation 8(2) and that change that it entailed must be the reason or principal reason for the dismissal of the [Appellant].

40 It is clear in this case on the facts and the evidence I have heard that there has been [no] change in the workforce which had the effect on the [Appellant's] job, rather the [Appellant's] job simply carried on, and was taken on by Mr Sugden. It must be the case that there is in [these] circumstances no relevant economic, technical or organisational reason and the dismissal is automatically unfair.

41 The reason I cannot find an economic, technical or organisational reason is two crucial pieces of evidence:

It was admitted by Mr Sugden that it quite simply could not afford Mr Brooks, and Mr Sugden further admitted he did not want to pick up the liabilities for Mr Brooks. Furthermore, it cannot be said that there was a change in the workforce because the Managing Director's job was transferred to the new company and in simple terms there were no reasons dictating getting rid of the Managing Director's role which clearly remained in existence. Given those crucial factors and the fact that there was no economic, technical or organisational reason that I can find under the Regulations the liability for the dismissal clearly rests with the Second Respondent."

Does TUPE apply?

18. For the appellant, Mr Philip Thornton placed a heavy emphasis on the fact that during the course of closing submissions before the Tribunal both Respondents had conceded (and he had agreed) (a) that the transfer from the First Respondent to the Second Respondent of assets and employees was a relevant transfer within Regulation 3(1) of TUPE and (b) that the Appellant's dismissal occurred because of the transfer, and was thus within Regulation 8(1). It followed, he argued, as the Chairman had found, that the dismissal was automatically unfair unless there was an ETOR and the dismissal was fair under section 98(4) of the Employment Rights Act 1996.
19. Mr Thornton argued that it was not open to the Members of the Tribunal to go behind the concessions made, nor was it open to Counsel instructed on behalf of the First and Second Respondents to take points before the EAT which they had not taken before the Tribunal. This latter argument was directed particularly towards Mr Gatt who appeared on behalf of the First Respondent, and who had put in a skeleton argument supporting the reasoning of the majority decision, including the proposition that the Tribunal members were entitled to go behind the concessions made by counsel if they took a different view of the facts. However, as Mr Gatt described himself as being "in the happy position that on the basis of both the majority and minority decisions of the ET, the First Respondent had no liability to the Appellant", Mr Thornton's objection was accommodated by the arguments for dismissing the appeal being put forward by Mr Livingstone, on behalf of the Second Respondent, who did not seek to resile from the concessions made at the hearing, although he did argue that it was open to the Tribunal (depending on its findings of fact) to disregard them and to find that the Appellant had been dismissed by reason of redundancy and that his dismissal was fair.
20. In this context, Mr. Thornton referred us to the decision of the Court of Appeal in Jones v Governing Body of Burdett Coutts School [1998] IRLR 521. The question in that case was whether or not the EAT should have entertained an appeal on a point which had been conceded before the Employment Tribunal. In giving the leading judgment in the Court of Appeal, Robert Walker LJ after referring to a number of authorities, said: -

"These authorities show that although the Employment Appeal Tribunal has a discretion to allow a new point of law to be raised (or a conceded point to be reopened) the discretion should be exercised only in exceptional circumstances, especially if the result would be to open up fresh issues of fact which (because the point was not in issue) were not sufficiently investigated before the industrial tribunal. In Kumchyk, the Employment Appeal Tribunal (presided over by Arnold J) expressed the clear view that lack of skill or experience on the part of the appellant or his advocate would not be a sufficient reason. In Newcastle, the Employment Appeal Tribunal (presided over by Talbot J) said that it was wrong in principle to allow new points to be raised, or conceded points to be reopened, if further factual matters would have to be investigated. In Hellyer, this court (in a judgment of the court delivered by Slade LJ which fully reviews the authorities) was inclined to the view that the test in the Employment Appeal Tribunal should not be more stringent than it is when a comparable point arises on an ordinary appeal to the Court of Appeal. In particular, it was inclined to the view of Widgery LJ in Wilson v Liverpool Corporation [1971] 1 WLR 302, 307, that is to follow:

The well-known rule of practice that if a point is not taken in the court of trial, it cannot be taken in the appeal court unless that court is in possession of all the material necessary to enable it to dispose of the matter fairly, without injustice to the other party, and without recourse to a further hearing below."

21. We were not referred to any authority directly on the point of a Tribunal deciding a case in a manner contrary to concessions made before it. In our view, however, similar principles would apply, namely that it would be an exceptional course for a Tribunal to take, and that there would have to be very good reasons for doing so. Furthermore, it seems to us, that if, having reserved its decision, the Tribunal during the period of reservation were to take the view that it was going to reach it on a basis which had not been argued (because it had been conceded) then it should consider whether or not it was necessary to inform the parties that this was a possibility, and reconvene for further argument.
22. In the instant case, Mr. Livingstone was, we think, correct not to seek to resile from the concessions which he had made below. We are, however, clearly of the view that the concessions as to the applicability of TUPE were correctly made, and that there is nothing so exceptional in the facts relating either to the transfer of the First Respondent's undertaking to the Second Respondent or in the Appellant's dismissal as to render it either appropriate or correct for the Members to conclude that TUPE did not apply. The facts of this case, in our judgment, fit inescapably into Regulation 3(1).
23. The question of the applicability of TUPE (as well as the question of whether or not the Appellant was made redundant) can, we think, be readily resolved simply by looking at the essential facts. The letter dismissing the Appellant is dated 24 February 1999. It is written on the First Respondent's notepaper, but was sent, we were told, at the instigation of the Second Respondent and was drafted by the latter's solicitors. The reason it gives for the termination of the Appellant's employment is contained in the first paragraph: -

"I am writing to you on behalf of (the First Respondent) to confirm that as a result of the restructuring of the business, your current position will become redundant. Unfortunately, no suitable alternative position within the Company can be found and I therefore set out the details of the redundancy package which the Company is offering you.

Your employment will terminate on 28 February 1999."

24. The material part of the First Respondent's undertaking was transferred to the Second Respondent on 1 March 1999, the following day. We cannot see how this was anything other than "a transfer from one person to another of (part of) an undertaking situated immediately before the transfer in the United Kingdom" within Regulation 3(1) of TUPE. Was the transfer or a reason connected with the transfer the reason or the principal reason for the dismissal? The answer to that seems to us obvious. The Second Respondent (1) could not afford to employ the Appellant and pay him the income he had been earning with the First Respondent; and (2) it did not want him as its Managing Director, a post which was being taken by Mr. Sugden. In these circumstances, the transfer was plainly the reason for the dismissal
25. The letter of 24 February 1999 is to be judged not by what it says, but by the objective criteria laid down by Regulation 8(2) of TUPE. By that standard, "restructuring" can only be a euphemism for the TUPE transfer. The statement "no suitable alternative position within the company can be found" ignores the reality that the position of managing director of the First Respondent was not disappearing; it was being transferred to the Second Respondent and taken over by Mr. Sugden. The Appellant was clearly not being made redundant: he was being dismissed by the First Respondent at the instigation of the Second Respondent because, as we stated in paragraph 24, the Second Respondent, quite reasonably, did not want him as its Managing Director.
26. The majority uses the phrase "coach and horses" in the context of a potentially collusive agreement between employees which enables a person in the Appellant's position to engineer a TUPE transfer from which that person benefits. This may be so. However, it seems to us that another coach and horses would become engaged if employers in the position of the First Respondent and the Second Respondent were able to dismiss for "redundancy" on the eve of what is clearly a TUPE transfer, and then argue that TUPE did not apply or that the dismissal was protected by Regulation 8(2). The plain and simple fact of the matter is that the Appellant was not made redundant. He was dismissed in an attempt to avoid the consequences of TUPE. Accordingly, for the reasons we have given, TUPE applied and the case is covered by Regulation 8(1).
27. It is apparent from their reasons (and this is an issue on which we have some sympathy for their view) that the Majority was concerned that the effect of the application of TUPE (assuming there was no ETOR) was very hard on the Second Respondent in general and on Mr. Sugden in particular. It may well be that the application of TUPE in this case produces a result which was not within the intention or contemplation of the draftsmen of the Legislation That, however, is a different issue, and sympathy for Mr. Sugden, with which Mr Thornton, in his skeleton argument was astute to associate himself, was an appropriate sentiment for the Tribunal to feel, but no reason, in our judgment, for finding, as a matter of law, that TUPE did not apply.
28. We are therefore quite satisfied on the facts of this case that the acquisition by the Second Respondent of the First's Respondent's business of the distribution of Smith Corona's products was a relevant transfer within Regulation 3(1) of TUPE, and that the critical question is whether or not there was an ETOR for the Appellant's dismissal within Regulation 8(2).

Was there an ETOR is this case?

29. Mr. Thornton submitted that an ETOR, under Regulation 8(2) of TUPE had to entail "changes in the workforce of either the transferor or transferee", and that such changes must be "the reason or the principal reason for dismissing the employee". Mr. Thornton argued that the change must be one which has some impact on and / or relevance to the job of the person dismissed. He argued, as was pointed out by the Chairman of the Tribunal, that the Appellant's dismissal was not such as to entail a change in the workforce. The Appellant's position as Managing Director of the First Respondent remained and was taken over by Mr. Sugden.
30. Mr. Thornton argued next that the mere fact that an employee had been dismissed for the economic advantage of the transferee could not in law amount to an ETOR. For this proposition he relied on Wheeler v Patel [1987] IRLR 211, which gave the term "economic" in Regulation 8(2) a limited meaning. Thus, where the vendor of a shop dismissed a shop assistant because the vendor thought that the sale would proceed more easily if the employee was dismissed, that had nothing to do with the conduct of the business and was not an "economic" reason . In the instant case, the Appellant was dismissed because the Second Respondent could not afford to employ him. That, he argued, was not an "economic" reason for the purposes of Regulation 8(2).
31. Mr. Thornton's next point was that the Appellant's employment had been terminated by the First Respondent, albeit at the instigation of the Second Respondent, and that Mr. Meijer, the Managing Director of the European Division of SCI, had expressed the view in evidence that he did not think TUPE applied. The First Respondent, accordingly, did not have an ETOR for dismissing the Appellant. In these circumstances, Mr. Thornton argued that it was immaterial that the Second Respondent might or would have had a valid ETOR. In BSG Property v Tuck [1996] IRLR 134 in analogous circumstances to the instant case, the EAT found that council workers had been unfairly dismissed by a local authority which had terminated its employees' employment in the Housing Maintenance Direct Service Organisation and concluded a contract for the same work with another organisation. The local authority did not think TUPE applied and thus could not have an ETOR for the dismissals. Mr. Thornton argued that, since the dismissal in the instant case had been made by the First Respondent, the reasons for the dismissal were the First Respondent's, even though liability for the consequences of the dismissal was transferred under TUPE to the Second Respondent. It was thus irrelevant, Mr. Thornton argued, that the Second Respondent may have had a valid ETOR.
32. Finally, Mr. Thornton argued that since the First Respondent had dismissed the Appellant and the First Respondent had no intention of continuing the business, its reasons for dismissing the Appellant could not have been related to the future conduct of the business. In these circumstances, he submitted, any reason of the First Respondent for dismissing the Appellant could not amount to a valid ETOR
33. Faced with this formidable array of arguments, Mr. Livingstone, for the Second Respondent, was constrained to rely on the findings of fact made by the majority as justifying the conclusion they had reached. Thus, he argued, they were entitled to find that changes in the workforce were the reason or principal reason for dismissing the Appellant. The reasons for the Appellant's dismissal were not simply that the Second Respondent could not afford to employ him, but were a product of the events set out in detail in the reasons, which related to the conduct of the business of the First Respondent. The facts warranted the finding of an ETOR, and BSG Property Services v Tuck could be distinguished. The First Respondent's ETOR could properly be said to relate to the future conduct of the business on the facts found by the Tribunal.
34. Mr. Livingstone cited a number of authorities, none of which, we think, helps him over the fundamental obstacles placed in his path. Each can, inevitably, be distinguished on the facts. Thus in Whitehouse v Chas A Blatchford & Sons Ltd [1999] IRLR 492, the Court of Appeal upheld a Tribunal finding of an ETOR where one employee out of 13 was made redundant when the company undertook a contract which required the reduction of its workforce from 13 to 12. That seems to us a wholly different situation to what which applies here. Equally, we do not think that either John Ansell & Partners v Collis (EAT 9 March 2000) or Thompson v SCS Consulting Limited EAT, 3 September 2001) assists him.
35. In our judgment, the clear and straightforward reasoning of the Chairman of the Tribunal is compelling in this case. It is a correct analysis of the facts, and is correct in law. For the reasons given by the Chairman and which we have given in this judgment, we take the view that the majority decision was wrong in law in finding that the Appellant was dismissed by the First Respondent by reason of redundancy and that the dismissal was fair. The Chairman was right to find that the Appellant was unfairly dismissed by the Second Respondent.
36. We conclude by repeating our view that the majority decision in the Tribunal appears to us to have been born out of sympathy for Mr. Sugden, and a belief that this was not the sort of situation for which TUPE was intended. As we have previously indicated, this may be so, although, so far as Mr. Sugden is concerned, we remind ourselves that we do not know all the facts. It may be that the correct application of the law does not produce justice in this particular case; but that is not a sufficient reason for not applying the law.
37. The appeal will, accordingly, be allowed: the majority decision will be set aside and the minority decision substituted. The matter will be remitted to the Tribunal for compensation to be assessed.