The Claimant had been employed by CIC, working and living in North East Scotland, and was found to have been unfairly dismissed by the ET. By the time of a Preliminary Hearing to case manage the remedy issues, most of the contracts under which CIC operated in Scotland had transferred to Cornerstone. The Claimant wished to be reinstated rather than accept compensation but this was refused by the ET on the basis that it was no longer practicable in relation to CIC because CIC were no longer providing services in Scotland. She had also not been transferred under TUPE to Cornerstone because she had already been dismissed by the date of the transfer, and anyway her former post had been changed. The Claimant appealed.

The EAT allowed the appeal in respect of CIC. The Employment Tribunal had relied almost entirely on her assumed personal circumstances as a factor militating against such an order - the Claimant had not said that she could only work in North East Scotland. The case was remitted for reconsideration of re-employment by CIC on a wider geographical basis than that hitherto erroneously considered by the Tribunal. The second appeal in respect of Cornerstone was refused - this part of the appeal depended entirely on the Claimant being able to show that Cornerstone is or may be a successor employer to CIC for the purposes of re-employment. A successor employer is defined by section 235(1) ERA for the purposes of section 115 ERA as:

"… a person who in consequence of a change occurring (whether by virtue of a sale or other disposition or by operation of law) in the ownership of the undertaking, or of the part of the undertaking, for the purposes of which the employee was employed, has become the owner of the undertaking or part".

The EAT concluded that section 235 requires a change in legal ownership of the undertaking itself. Here, Aberdeen City Council terminated the service provided by CIC and awarded the service contract to Cornerstone. There was no change in the ownership of the service from CIC to Cornerstone. There was simply a change in contractors with ownership remaining with Aberdeen City Council. Cornerstone was not a successor employer within the meaning of section 235 ERA for the purposes of sections 115 and 116 ERA.