Clark and Tokeley Ltd v Oakes

For continuity-of-employment purposes, “the time of the transfer” of a trade, business or undertaking may comprise a period rather than a single instant. Whether a transfer is a process extending over time is a question of fact and degree, assessed by the actual state of affairs and common sense rather than solely by legal formalities.

An employee need not remain employed throughout that period. Employment during any part of the transfer process may suffice, so that a short intervening gap does not necessarily destroy continuity where the employee’s earlier and later employment concern the same undertaking.

Mr Oakes had been employed by Biss Vehicles Ltd for nearly six years. He was dismissed by the liquidator on 14 March 1996, during negotiations and arrangements for the sale of the business. He began a new contract with Clark and Tokeley Ltd on 21 March and was dismissed by them on 2 April, after nine days.

The Industrial Tribunal held that his earlier service counted towards the two-year qualifying period for an unfair-dismissal claim. The Employment Appeal Tribunal dismissed the employer’s appeal. The central issue before the Court of Appeal was whether he was an employee in the undertaking “at the time of the transfer” within paragraph 17(2) of Schedule 13 to the Employment Protection (Consolidation) Act 1978, despite the intervening dismissal.

1. Appeal dismissed. The Industrial Tribunal had made no error of law, and its findings were sufficient to determine the issue without remission.
2. Paragraph 17(2) requires the employee to be an employee in the trade, business or undertaking at the time of the transfer. The words relate both to the employee’s period of employment and to the employee’s status in the undertaking at that time.
3. “The time of the transfer” is reasonably capable of referring to a period. A transfer of a going concern commonly involves the transfer of different assets, rights and business elements at different times. It is therefore more naturally treated as a process than as an event confined to the completion of legal formalities.
4. The relevant question is one of fact and degree. Tribunals should consider the actual state of affairs, rather than technical legal steps alone. The Court of Appeal adopted the broader approach indicated by Stephenson LJ in Teesside Times Ltd v Drury [1980] ICR 338.
5. There is no requirement that the employee remain employed throughout the transfer process. Sir Christopher Staughton expressly held that employment during any part of the period may suffice. On the facts, Mr Oakes was employed when the transfer process began and his dismissal occurred during that process; his service with the transferor and transferee was consequently continuous.
6. The continuity provisions were distinct from TUPE. The date or concept of transfer under regulation 5 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 did not determine the construction of paragraph 17(2).

Appeal dismissed with costs. Leave to appeal to the House of Lords refused.

• Court of Appeal: Appeal from the Employment Appeal Tribunal dismissed with costs; leave to appeal to the House of Lords refused.
• Employment Appeal Tribunal: Appeal from the Industrial Tribunal dismissed on 9 June 1997.
• Industrial Tribunal: Held that Mr Oakes’s earlier employment counted towards continuous employment for his unfair-dismissal claim.