CELTEC Ltd v Astley

A transfer of an undertaking under the Acquired Rights Directive 77/187/EEC may take place over a period, including several years. It need not occur at a single moment. The duration and boundaries of the transfer are questions of fact and degree for the tribunal, assessed against the actual circumstances. Existing employees’ management skills may form part of the undertaking even while employees remain seconded and employed by the transferor. Employees who continue working for the transferred business should not lose accrued employment rights merely because the change of employer is staged.

The employee appellants were redundant or facing possible redundancy after working for the Department of Employment and then being seconded to Training and Enterprise Councils. They sought determinations under section 11 of the Employment Rights Act 1996 concerning continuous employment and redundancy entitlements.

The Employment Tribunal found that the undertaking transferred through a planned process beginning in 1990 and continuing for several years. It held that continuity was preserved when secondees later became directly employed by the TECs. The majority of the Employment Appeal Tribunal held that the transfer was completed when the TEC assumed actual occupation and control, probably in September 1990, and allowed Celtec’s appeal. The central issue before the Court of Appeal was whether the Directive permitted a transfer extending over several years.

1. Appeals allowed. Lord Justice Schiemann delivered the judgment of the court, allowing the appeals, quashing the Employment Appeal Tribunal’s decision and restoring the Employment Tribunal’s decision. Celtec was ordered to pay the appellants’ costs. Permission to appeal to the House of Lords was refused.
2. The court treated the Acquired Rights Directive 77/187/EEC as the starting point because the appellants could rely on it directly against Celtec. Article 1(1) is sufficiently wide to encompass a transfer of a business which takes place over a period. The Directive does not require the transfer to occur at one identifiable instant.
3. Where a transfer is implemented in stages, the period during which it occurs is a question of fact and degree for the tribunal of fact. The tribunal must assess the actual circumstances, applying common sense and its knowledge of trade and industry. The Employment Tribunal was entitled to find that the planned process continued over several years.
4. The management skills of existing employees who were willing to continue working under the TEC’s supervision formed part of the undertaking being transferred. Those skills were available to the TEC whether the employees became directly employed immediately or were initially seconded while remaining employed by the Department.
5. The accepted facts showed that the appellants continued doing the same work in the same buildings. Their work was connected with the transferred business, and it was unnecessary and disproportionate to remit the matter for further findings on assignment.
6. The court saw no reason, as a matter of policy, to deprive employees who continued working for the relevant business of accrued rights merely because the transfer was carried out over time. Its reasoning under the Directive applied to each appeal, making it unnecessary to determine Mr Astley’s alternative reliance on the Transfer of Undertakings (Protection of Employment) Regulations 1981.

• Court of Appeal (Civil Division) — [2002] EWCA Civ 1035: appeals allowed; the Employment Appeal Tribunal’s decision was quashed and the Employment Tribunal’s decision restored.
• Employment Appeal Tribunal — On 5 October 2001, the majority allowed Celtec’s appeal, holding that the transfer had been completed when the TEC assumed actual occupation and control.
• Employment Tribunal — On 22 December 1999, found that the undertaking transferred through a lengthy planned process and that the employees’ continuity of employment was preserved.