1. This is a case arising from what was agreed to be a service provision change amounting to a relevant transfer between two entities, Costain Ltd and ERH Communications Ltd. It raises a question as to the approach to be adopted by Employment Tribunals in respect of the interplay between Regulations 3 (relevant transfer) and 4 (relevantly, assignment) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 and also as to the adequacy of this Employment Tribunal's Reasons.

1. For clarity I refer to the parties as the Claimant and as Costain (that is, the Appellant before me, the Second Respondent before the Employment Tribunal) and ERH (that is, the Second Respondent to this appeal but the First Respondent before the Employment Tribunal.

1. The appeal before me is that of Costain against a reserved Judgment of the Employment Tribunal sitting at Wrexham (Employment Judge J C Hoult, sitting alone) on 16 May 2013 and in chambers on 15 August 2013. The Judgment and Reasons were sent to the parties on 3 September 2013.

1. Before the Employment Tribunal and here the Claimant was represented by his solicitor, Ms Boynes. ERH was represented by its solicitor, Mr Manson, before the Employment Tribunal, but now appears by Mr Smith of Counsel, and Costain was represented by Mr Milsom of Counsel both before the ET and on this appeal.

1. The Judgment of the Employment Tribunal was that the Claimant was assigned to an organised grouping of employees immediately before that group was transferred from ERH to Costain and that his employment was automatically so transferred.

1. The Claimant's claims had been of breach of contract and/or unlawful deductions of wages against ERH. Given the conclusions reached on the question of transfer, those claims were dismissed. I understand that the Claimant has subsequently indicated that he does not seek to pursue those claims against Costain.

1. The live issue in these proceedings thus relates to the Tribunal's declaration that there was a relevant transfer of the Claimant's employment.

1. ERH is a communications company. It had won the contract for the provision of services for the Welsh Assembly government for what was called the All Wales Regional Maintenance Contract for Road Network Communications and Tunnel Systems ("the AWRMC"). The work related to managing for the client, the Welsh Assembly Government, the programme of planned maintenance and additional works on its highways throughout Wales. It is common ground that there was also a framework agreement between ERH and the Welsh Assembly for additional works, albeit that there was no guarantee as to the amount of such work.

1. Further, in 2008, ERH won a separate ancillary contract with the Welsh Assembly. This was not a fixed price contract, but a framework agreement under which ERH had no guarantee of work but would be required to bid to secure works under any ancillary contracts available. In contrast, the AWRMC provided a guaranteed income stream, and the majority of ERH's employees' time was allocated to it. Any work under the ancillary contract was recorded separately. Any employee could be required to work on either contract, but no employee was assigned to the ancillary contract.

1. The Claimant started employment with ERH as a Project Engineer on 30 April 2007, based at its Conwy Depot. A 2010 statement of his terms and conditions recorded the Claimant's responsibilities for the total management of all civil-based contracts undertaken by ERH working from the Conwy office. The Employment Judge noted that, under the subheading "Roles and Responsibilities", the Claimant was to liaise on a day-to-day basis with the contract engineer and director for the smooth running of the civil-based additional works.

1. In October 2012, the Claimant was appointed to the position of Project Manager and revised Roles and Responsibilities were sent to him, setting out that he would be responsible for the primary management of projects undertaken by ERH and that the projects would be of varying complexity and value, including additional works instructions arising out of framework or maintenance contracts.

1. The AWRMC came up for tender in June 2012. Costain was the preferred bidder. On 15 October, ERH was notified that it had been unsuccessful. A service provision change in respect of the AWRMC took place on 1 February 2013, whereupon Costain began to provide those services to the Welsh Assembly. The ancillary works contract was not included in the AWRMC and did not transfer.

1. Prior to the change on 1 February 2013, TUPE consultation had taken place, and due diligence was carried out by Costain. In December 2012, the Claimant received information from ERH, which effectively set out, so far as relevant, its position in relation to him: that is, that he was to be transferred to Costain and that, as far as ERH was concerned, he spent 80% of his time on the AWRMC.

1. On 20 December 2012, the Claimant queried the information he had received, which had made no reference to his appointment to the position of Project Manager and the revised responsibilities he had then received in October 2012.

1. On 21 December 2012 ERH provided a list of the employees it considered subject to transfer; including the Claimant as a Project Engineer, spending 80% of his time on the AWRMC.

1. On 7 January 2013 the Claimant attended an individual meeting with Costain. He took his CV to that meeting, in which he described his position as that of Project Manager for the project-based element of the ongoing AWRMC and the ancillary framework agreement. His CV listed a series of projects between 2006-2007. It did not provide detail of the Claimant's AWRMC work because the Claimant felt that would look less impressive.

1. There was a dispute before the Tribunal as to precisely what was said at that meeting. In any event, it seems that Costain raised the question of the application of TUPE so far as the Claimant was concerned. That was because it seemed that the majority of the Claimant's experience was on projects and Costain was unclear as to where the Claimant sat on the AWRMC team. Costain contended it was given the impression that the Claimant spent the majority of time on one-off ancillary projects. Although he had recently spent an increased amount of time on the AWRMC, there was no reason to think that he had been assigned to it.

1. The Employment Judge found that the Claimant certainly indicated that he did not spend as much as 80% of his time on the AWRMC, although equally he did not put it is as low as 40%, as had been recalled by Costain's witness.

1. On 25 January 2013, ERH sent the Claimant's timesheets for the past three months to Costain, showing, ERH maintained, that the Claimant spent 67% of his time on the AWRMC, although that percentage included any time absent either through sickness or on holiday.

1. At the end of the month it provided further earlier timesheets relating to the Claimant. Having considered the Claimant's timesheets, CV and job description, Costain took the view that the Claimant had not been assigned to the AWRMC and, as such, would not transfer into its employment.

1. There was a Preliminary Hearing, at which the issue for the Employment Tribunal was whether the Claimant had transferred from ERH to Costain when there was a service provision change from the former to the latter. It had been agreed by all that, when ERH lost the AWRMC to Costain, there had been a service provision change for the purposes of Regulation 3(1)(b)(ii) Transfer of Undertakings (Protection of Employment) Regulations 2006. The issue was whether or not there was an organised grouping of employees to which the Claimant was assigned immediately before the transfer.

1. The Employment Tribunal heard from the Claimant; from Mr Groves, director of ERH, and from Mr Davies, Contracts Manager for Costain. The evidence was taken at the hearing on 16 May 2013, and then there was a series of exchanges of written submissions and responses which the Employment Judge considered in chambers on 15 August 2013. There was no resumed hearing for oral submissions.

1. The Claimant was prepared to be relatively neutral on the question whether or not his employment had transferred, albeit that he submitted that the majority of his time had been spent on the AWRMC and so his employment should have transferred to Costain.

1. The Employment Judge records Costain's position as being that the Claimant had not been assigned to the AWRMC because he did not spend sufficient time on it. On Costain's case the Claimant had said that he spent 40% of his time on the AWRMC.

1. The Employment Judge rejected that evidence, albeit accepting that the Claimant had said the original figure of 80% was too high. The Employment Judge expressly accepted the Claimant's evidence that he had spent most of his time on the AWRMC. For clarity, I should say that Mr Milsom has rejected the Employment Judge's characterisation of Costain's position below. He says its case was that service provision changes require a focus on purpose rather than percentages of time spent. It was Costain's case that the Claimant was a troubleshooter, responding to projects rather than contracts. Given his role, he was not assigned to any one particular contract. He was a project worker, employed at the risk of ERH. This is a point to which I will return subsequently in this Judgment.

1. In any event, the Employment Judge concluded that it was clear that there was an organised grouping and that the employees concerned were organised by reference to the requirements of the Welsh Assembly in respect of the AWRMC. The Employment Judge found that the Claimant had commenced his employment as a Project Manager in 2007 to undertake ancillary work on the AWRMC. His 2010 job description referred to day-to-day liaison with the running of the civil-based additional works contracts which formed part of the AWRMC. Up to November 2011, ERH had accepted that the Claimant had worked about 40% of his time on the AWRMC, but thereafter his work on it gradually increased to 67%, albeit that included time spent away from work for holiday or sickness absence. On the evidence, the Employment Judge was satisfied that the Claimant was assigned to an organised grouping of employees, which had as its principal purpose the carrying out of activities concerned on behalf of the Welsh Assembly Government. Accordingly there was relevant transfer pursuant to TUPE in relation to the Claimant when Costain took over the contract.

1. The Notice of Appeal puts Costain case under the following heads:

Ground 1: that the Employment Tribunal failed to apply the correct legal test as to assignment;

Ground 2: that the Employment Tribunal applied the wrong burden of proof;

Ground 3: the Tribunal erred in its treatment of the Claimant's sickness and holiday leave;

Ground 4: the Employment Tribunal provided reasons that were inadequate;

Ground 5: the decision reached was perverse.

1. Before me Mr Milsom has focussed his argument on Grounds 1 (approach) and 4 (reasons), fairly accepting that, if he could not win on those grounds, he was unlikely to succeed on this appeal.

1. Considering the appeal on the papers, Recorder Luba QC took the view that the Notice of Appeal disclosed grounds with a real prospect of success. In particular, he thought that the Employment Judge might have simply listed the points weighing either way on the evidence without then explaining the reasons for the conclusions reached. The matter was therefore listed for a Full Hearing and hence comes before me.

1. The relevant legislative provisions are found within the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), starting at Regulation 3, which defines what constitutes a relevant transfer. That will include (see Regulation 3(1)(b)) a service provision change, as was admitted to have taken place in this case.

1. One of the express conditions for a finding of a service provision change transfer is that (see Regulation 3(3)(a)(i)):

"(a) immediately before the service provision change --

(i) there is an organised grouping of employees situated in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client;"

1. Even if, as here, it is accepted that there was a service provision change, however, reference needs then to be made to Regulation 4, as to the effect that will have on contracts of employment. Relevantly that provides:

"...a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee.

(2) Without prejudice to paragraph (1), … 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) any act or omission before the transfer is completed, of or in relation to the transferor in respect of that contract or a person assigned to that organised grouping of resources or employees, shall be deemed to have been an act or omission of or in relation to the transferee.

(3) Any reference in paragraph (1) to a person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to a relevant transfer, is a reference to a person so employed immediately before the transfer, or who would have been so employed if he had not been dismissed in the circumstances described in regulation 7(1), including, where the transfer is effected by a series of two or more transactions, a person so employed and assigned or who would have been so employed and assigned immediately before any of those transactions."

1. Moreover Regulation 2(1), which defines various of the terms used in the Regulations provides that "assigned" means assigned other than on a temporary basis.

1. So, first, there must be an organised grouping of employees dedicated to the client (Regulation 3(3)(a)(ii)) and, second, the employee must be assigned to that grouping. Those questions are "analytically distinct" per Underhill P (as he then was), at paragraph 16 Eddie Stobart Ltd v Moreman [2012] IRLR 356. But, as the learned Judge went on, the two points nevertheless self-evidently overlap to a very considerable extent since, for the purpose of considering who is assigned to a putative organised grouping, it is necessary to identify what that grouping consists of.

1. On the first question, the concept of an organised grouping implies that there is an element of conscious organisation by the employer of its employees in the nature of a team, which has as its principal purpose the carrying out of the activities in question. So, there must be a "deliberate putting together of a group of employees for the purpose of the relevant client work. It is not a matter of happenstance.", see the Judgment of the Court of Session in Seawell Ltd v Ceva Freight UK Ltd [2013] IRLR 726, approving the Judgment of Lady Smith in that case, reported at [2012] IRLR 802. There will not be an "organised grouping of employees" with the relevant purpose if the employees in question simply happen to be working on that activity at the time of the transfer, perhaps because shift arrangements mean that they are working on a particular contract at a particular time without their actually being dedicated to it, or they are working on that activity, even if for 100% of their time, for some other entirely fortuitous reason, and see the approach adopted by the EAT in the Eddie Stobart case and by the Court of Session in Seawell Ltd.

1. On the second question, that of a particular employee's assignment, the starting point is generally taken to be the Judgment of the European Court of Justice in Botzen and others v Rotterdamsche Droogdok Maatschappij BV [1985] ECR 519, where it was stated:

"An employment relationship is essentially characterized by the link existing between the employee and the part of the undertaking or business to which he assigned to carry out his duties. In order to decide whether the rights and obligations under an employment relationship are transferred under [the Directive]... it is therefore sufficient to establish to which part of the undertaking or business the employee was assigned."

1. That talks of assignment in terms of a business undertaking or part, rather than any service provision change, but the language of assignment remains the same. In approaching that question, it is often tempting to try to establish assignment by reference to the percentage of time an employee is engaged in working in the relevant undertaking or part or on the particular activities in question. That might not be an irrelevant question, but it is not the test. In Duncan Webb Offset (Maidstone) Ltd v Cooper and Another [1995] IRLR 633 the EAT observed that the question of assignment is one of fact for the Employment Tribunal, albeit that it might be relevant to look at the amount of time an employee spends on one part of the business or the other, the amount of value given to each part by the employee, the terms of the contract, showing what the employee could be required to do, and how the cost to the employer of the employee's services had been allocated between the different parts of the business (see paragraph 1 of the Judgment of Morison J in that case). What is to be given weight in any particular case will be a matter for the Employment Tribunal as the Tribunal of fact, but it will not be determinative that the different aspects of the employee's work are carried out for the same client. As Lady Smith observed, at paragraph 19 of her Judgment in Edinburgh Home-Link Partnership v The City of Edinburgh Council (UKEATS/0061/11 10 July 2012, unreported)),

"Regarding the reg 4 issue of assignment, the question has to be asked in respect of each individual employee. It is not to be assumed that every employee carrying out work for the relevant client is assigned to the organised grouping...If, for instance, an employee's role is strategic and is principally directed to the survival and maintenance of the transferor as an entity, it may then not be established that that employee was so assigned."

1. In Argyll Coastal Services Ltd v Stirling & Ors (UKEATS/0012/11, 15 February 2012, unreported) Lady Smith again had to consider the interplay between Regulations 3 and 4, TUPE and offered the following analysis. First, in respect of the question of an organised grouping of employees for Regulation 3(3)(a)(i) purposes:

"It seems to me that the phrase 'organised grouping of employees' connotes a number of employees which is less than the whole of the transferor's entire workforce, deliberately organised for the purpose of carrying out the activities required by the particular client contract and who work together as a team.

19. Turning to 'principal purpose' there seems to be no reason why the words should not bear their ordinary meaning. Thus, the organised grouping of employees need not have as its sole purpose the carrying out of the relevant client activities, that must be its principal purpose.

...

21. If a claimant can show that a relevant service provision change occurred, he then requires to satisfy the requirements of regulation 4(1). That involves considering whether or not the claimant was assigned to the organised grouping of resources referred to in regulation 3(3)(a)(i)."

Then, going on to consider the question of assignment:

"The issue of whether or not a particular employee was assigned to the 'organised grouping of employees' affected by the transfer and thus entitled to the protection of TUPE is not a mere formality. It can only be resolved after a proper examination of the whole facts and circumstances. Being involved in the carrying out of the relevant activities immediately prior to the transfer will not necessarily mean that that employee was assigned to the organised group.

This, of course, picks up on the requirement laid down by Regulation 2(1), that, in order for an employee to transfer, their assignment must be other than on a temporary basis.

1. Lady Smith was emphasising that an Employment Tribunal needs to take care to consider the whole facts and circumstances in which a particular employee worked in order to answer the assignment question. It is not a question that will be answered simply by reference to the percentage of time worked by the employee on a particular contract unless the factual context demonstrates why that would be relevant test in the particular circumstances. Simply stating that an employee spent 100% of their time on the contract in question would not be sufficient. That might simply have represented a snapshot of the position at a particular moment in time, not an assignment to the organised group. Similarly, there might be cases where a Tribunal finds that an employee is assigned to the organised group, but at a particular period spent less than 50% of their time on that work.

1. Where an Employment Tribunal has correctly approached its task and carried out the full factual analysis required, it would not be for this court to interfere with the conclusion reached unless it was demonstrably perverse or without any evidential foundation. As is well-known, a perversity challenge has to meet a high test to be upheld in this court (see Yeboah v Crofton [2002] IRLR 634 CA).

1. Moreover, when assessing a Judgment of an Employment Tribunal for these purposes, it is not for the EAT to read the Tribunal's Reasons as with a fine-tooth comb, searching for errors. An Employment Judge is entitled to expect an appeal court to read her Judgment as a whole and with some allowance being made for the fact that the parties will have been aware of what was in issue and the focus of the evidence at the hearing. On the other hand, a Tribunal's Judgment still needs to be Meek-compliant (Meek v City of Birmingham District Council and to meet the requirements of the Employment Tribunal Rules: here, the Employment Tribunal Rules 2013. Parties are entitled to understand why they have won or lost, and anyone reading the Judgment should be able to understand how the relevant findings of fact and applicable law have been applied in order to determine the issues. In carrying out that exercise, as it was put by Sedley LJ in Anya v University of Oxford [2001] ICR 847, at paragraph 26:

"The courts have repeatedly told appellants that it is not acceptable to comb through a set of reasons for hints of error and fragments of mistake, and to try to assemble these into a case for oversetting the decision. No more is it acceptable to comb through a patently deficient decision for signs of the missing elements, and to try to amplify these by argument into an adequate set of reasons. Just as the courts will not interfere with a decision, whatever its incidental flaws, which has covered the correct ground and answered the right questions, so they should not uphold a decision which has failed in this basic task, whatever its other virtues."