Lynch & Ors v London General Transport Services Ltd

Whether an undertaking has transferred for the purposes of TUPE is determined by an overall assessment of the circumstances. The question is whether the economic entity has retained its identity, not whether a particular formal transaction or statutory document exists. Relevant matters may include the activity carried on, assets, customers, routes, employees and continuity of the economic entity.

An appellate court will not interfere with an employment tribunal’s factual conclusion where the correct test was applied, the findings are adequately reasoned and supported by evidence. Non-compliance with a statutory scheme does not necessarily prevent a transfer in fact. The tribunal must determine whether and when the transfer occurred.

The appellants challenged a preliminary decision of the Employment Appeal Tribunal, Lindsay J presiding, dated 23 February 2001. The Employment Tribunal had found on 13 November 1999 that part of London Buses Ltd’s bus undertaking transferred to the respondent on 31 March 1989, rather than in 1993 under a scheme made pursuant to the Transport Act 1984.

The appellants argued that the 1989 arrangements were informal and ineffective because the statutory procedure had not then been followed. They also alleged apparent bias arising from the Secretary of State’s role in appointing tribunal members. The central issues were when the relevant undertaking transferred under TUPE, whether the 1984 Act invalidated the 1989 arrangements, and whether the tribunal was apparently biased.

The Court of Appeal refused permission to appeal and ordered the appellants to pay the respondents’ costs of £6,550. Permission to appeal to the House of Lords was also refused.

1. Relevant transfer. The Employment Tribunal correctly applied the approach in Spijkers v Gebroeders Benedik Abbatoir CV [1986] ECR 1119, as subsequently applied in Suzen v Zehnacker Gebaudereinigung GmbH Krankehausservice [1997] ICR 662. An overall assessment was required. The tribunal was entitled to find that the same bus activity, routes, customers, assets and employees continued, with no material change in the economic entity between 31 March and 1 April 1989.
2. Appellate review. There was evidence supporting the tribunal’s findings, the material facts were sufficiently set out, and the conclusion was neither unsupportable nor irrational. The fact that some matters were not transferred until 1993 did not require the court to reject the tribunal’s conclusion that the undertaking had transferred in 1989.
3. Effect of the 1984 Act. The submission that arrangements outside the statutory procedure were void was rejected. The Employment Tribunal and Employment Appeal Tribunal were correct to conclude that the relevant bodies had power to effect the transfer. TUPE’s protective purpose required the tribunal to determine whether and when a transfer had occurred in fact. Nothing in the Transport Act 1984 prohibited or constrained that determination.
4. Apparent bias. The Secretary of State was not a party to the proceedings. His role in the statutory procedure did not make tribunal appointments by him capable of creating an appearance of bias.

Lord Justice Longmore and Sir Martin Nourse agreed with Lord Justice Pill.

• Employment Tribunal: On 13 November 1999, found that a relevant transfer under TUPE occurred on 31 March 1989 and that no later relevant transfer occurred.
• Employment Appeal Tribunal: Decision given on 23 February 2001, under Lindsay J, upholding the tribunal’s decision.
• Court of Appeal (Civil Division): Refused permission to appeal. Permission to appeal to the House of Lords was refused.