The claimant was dismissed 3 months after his employment transferred to the respondent and the ET found that the dismissal was unfair, and that there had been a relevant TUPE transfer. The respondent appealed on 3 grounds: 1) that there was no adjudication by the ET on the counter-claim against the transferor under regulation 12 of TUPE for the full cost of any award made against them; 2) the respondent was prevented from advancing a Polkey argument and 3) the ET was wrong to discharge the transferor from the proceedings once it had found that a relevant transfer had taken place.

The EAT dismissed the appeal. The first ground failed for 3 reasons including the conclusion that the regulation 12 complaint would fail on the facts because the respondent knew that the claimant was an employee of the transferor. There was no evidential basis for a Polkey deduction and the transferor was correctly dismissed from the proceedings once the ET had found that there was a relevant transfer.
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Appeal No. UKEAT/0278/11/ZT

EMPLOYMENT APPEAL TRIBUNAL

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

At the Tribunal

On 27 June 2012

Before

HIS HONOUR JUDGE PETER CLARK, MR D BLEIMAN, MR D G SMITH

VATRE TERRACOTTA LTD (APPELLANT)

(1) MR M J BAKER; (2) MRS E PANKHURST T/A MAYS TERRACOTTA (RESPONDENTS)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant
MR GEOFFREY ISHERWOOD (Representative)

Employment Law Advisory Services Ltd
Charles House
Albert Street
Eccles
Manchester
M30 0PW

For the Respondents
No appearance or representation by or on behalf of the Respondents

**SUMMARY**

TRANSFER OF UNDERTAKINGS – Consultation and other information

UNFAIR DISMISSAL – Polkey deduction

PRACTICE AND PROCEDURE – Disposal of appeal including remission

TUPE reg. 11 complaint by transferee against transferor not expressly dealt with by Employment Tribunal, but would inevitably fail on remission to ET for three separate reasons. Appellant prevented from arguing Polkey below; but no evidential basis for a Polkey deduction. Transferor correctly dismissed from proceedings once ET found, on the evidence, that a relevant transfer took place.

**Dobie v Burns** principle applied. Appeal dismissed.**HIS HONOUR JUDGE PETER CLARK****Introduction**

1. This case has been proceeding in the Brighton Employment Tribunal, where the parties were Mr Baker, Claimant, and (1) Mr and Mrs Pankhurst, trading as Mays Terracotta ("Mays") and (2) Vatre Terracotta Ltd ("VTL"), Respondents. We have before us for full hearing an appeal by VTL against the Judgment of an Employment Tribunal chaired by Employment Judge Warren sitting on 12 December 2010. That Judgment is dated 27 January 2011; written Reasons were provided on 14 March 2011, subject to a later correction to paragraph 25 of the Reasons. By their Judgment the Tribunal found that there was a relevant transfer of Mays' business, in which the Claimant was employed, to VTL on 1 March 2010. Consequently, Mays were discharged from the proceedings. The Tribunal further found that VTL unfairly dismissed the Claimant and ordered VTL to pay compensation totalling £19,913.30.

1. The appeal was initially listed for a preliminary hearing, which came before a division presided over by Mr Recorder Luba QC on 22 September 2011. The hearing was adjourned pending answers by the Employment Judge to certain questions posed by that Tribunal under the Burns/Barke procedure. The Employment Judge has answered those questions (bundle page 57). The matter returned for the restored preliminary hearing before Langstaff P and members on 16 February 2012. The appeal was permitted to proceed on certain grounds, later encapsulated in amended grounds of appeal prepared by Mr Isherwood, who has represented VTL in the appeal. Before the Employment Tribunal VTL was represented by Mr Copeland, who, we are told, is unwell and unable to conduct this appeal. There are three live grounds of appeal; we shall consider each in the following order.

**VTL's "counter claim"**

1. In their form ET3 lodged following an extension of time in September 2010 VTL contended at section 5.2 that there was no Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) transfer of the Claimant's employment from Mays to VTL; alternatively, if there was a transfer, then Mays failed to supply employee liability information required by regulation 10 (sic; presumably regulation 11) of the TUPE Regulations 2006, and they "counter claimed" against Mays under regulation 12 for the full cost of any award made against them.

1. The complaint on appeal is that there is no adjudication by the Employment Tribunal on this so called counter claim, although the point was raised at the hearing below. On the other hand, the Employment Judge in his response states that the point was not pursued before the Tribunal and anyway there was a time point since the "application" was some six months after the transfer.

1. We agree with Mr Isherwood that if the point was raised, it ought to have been adjudicated on. Assuming in VTL's favour that it was, ought the appeal to be allowed and the point remitted for a further hearing before the same or a different Employment Tribunal? We have not heard from the Respondents to the appeal; they rely on the Employment Tribunal's conclusions. Before remitting this issue we have enquired of Mr Isherwood precisely how the case for VTL would be put on remission.

1. It seems to us that they face three difficulties. The first lies in the construction of regulation 11. We sought to investigate what information was not provided by Mays. VTL knew about Mr Baker, who continued to work in the business following the transfer on 1 March until notice of termination given by Mays expired on 31 May 2010. In the absence of any pleaded case on the information allegedly not provided, and bearing in mind that VTL knew that Mr Baker was an employee of Mays, the transferor, it seems to us that the regulation 12 complaint will inevitably fail on the facts.

1. Secondly, a successful complaint under regulation 12 will lead to compensation representing loss sustained by the transferee, VTL, which is attributable to the breach of regulation 11. It is not truly a counter claim entitling the transferee to an indemnity against the Claimant's claims against the transferor. Listening to Mr Isherwood, it seems to us that VTL's complaint is that they did not believe that there was a relevant transfer; that is not information covered by regulation 11.

1. Thirdly, there is the limitation point identified by the Employment Judge in his response. Regulation 12(2) is clear: time runs from the date of transfer found by the Employment Tribunal, and not the subject of this appeal, as 1 March. Thus the three month primary limitation period expired on 31 May, coincidentally when Mr Baker's notice period expired. It is nothing to the point that VTL's time for lodging a form ET3 response to the Claimant's ET1 was extended. That extension of time does not engage the reasonable practicability escape clause in regulation 12(2)(b). The reason for the limitation rule in regulation 12(2) is that a transferee may be expected to know whether the transferor has failed to provide employee liability information as at the date of transfer. No proper reason has been advanced on behalf of VTL as to why it was not reasonably practicable to bring a regulation 12 complaint against Mays in time if there was a failure to provide any of the relevant information.

1. For all these reasons, we conclude that remitting this point for rehearing by an Employment Tribunal is a pointless exercise. The claim by VTL is bound to fail.

**Polkey**

1. Here, the complaint is that Mr Copeland was prevented by the Employment Judge from advancing a Polkey v A E Dayton Services Ltd [1987] IRLR 503 argument in relation to the compensatory award for unfair dismissal because the point had not been pleaded in the ET3. If this was the case and the Burns/Barke questions (questions 6 8) and the Employment Judge's response that no such submission was made do not in terms deal with that allegation (which might more properly have been dealt with by the application of the procedure under paragraph 11 of the EAT Practice Direction), then the ruling was wrong; see my Judgment in [DGF Ltd v O'Neil]() UKEAT/0197/10, 10 March 2011, to which Mr Isherwood has referred us.

1. However, again we have investigated with Mr Isherwood how the Polkey point would be put at a remitted hearing before the Employment Tribunal. We did not receive any satisfactory response. In assessing the Claimant's loss of earnings (Reasons, paragraphs 26 28) the Tribunal compensated him for his loss of earnings to the date of the hearing, of 28 weeks, and a further 32 weeks' future loss before his anticipated return to employment. True it is that he was under notice given by Mays expiring on 31 May; however, that notice was of no effect following the transfer as found by the Tribunal. Thus the question under Polkey is when if at all during the period of loss found would VTL have fairly dismissed him. It seems that no evidence was adduced on that point below, although Mr Sykes, a director of VTL, was called.

1. In these circumstances, there was no evidential basis for a Polkey deduction, and an appellant is not entitled to a remitted hearing so as to make good any gaps in the evidence given first time around. More to the point, Mr Isherwood was unable to indicate what evidence was available to VTL to argue a Polkey reduction in compensation. In these circumstances, again, we see no purpose in remitting the Polkey point for rehearing.

**Mr Pankhurst**

1. Mr Isherwood submitted that the Tribunal was wrong to discharge Mr Pankhurst of Mays from the proceedings after it was found that a TUPE transfer had taken place. We disagree. On the contrary, once that finding was made by the Tribunal, which heard evidence from the Claimant, Mr Pankhurst and Mr Sykes of VTL (see Reasons, paragraph 2), Mays had no further part to play. No potentially fair reason for dismissal was advanced by VTL (Reasons, paragraph 25). The effect of the transfer was to continue Mr Baker's employment with VTL until the effective date of termination of his employment on 31 May, thus the only remaining question was the assessment of compensation payable to the Claimant by VTL as transferee following his unfair dismissal.

**Disposal**

1. It follows, even assuming that the procedural irregularities complained of occurred, that the Tribunal's conclusions were plainly and unarguably correct; see Dobie v Burns International Security Services (UK) Ltd [1984] ICR 812. Accordingly, this appeal fails and is dismissed.