Bower v Stevens & Anor

The Court of Appeal dismissed the appellant's appeal and held that section 218(5) of the Employment Rights Act 1996 must be construed purposively to preserve continuity of employment where a partnership of two is succeeded by one of those partners carrying on the business as sole principal. The court rejected the narrower view taken in Harold Fielding Ltd v Mansi that the plural "partners" cannot include the singular in this context.

The court accepted the Employment Appeal Tribunal's conclusion that the applicants' employment continued until 30 March 2001 and that their claims were therefore brought in time. The court also observed that section 218(2) could apply in such circumstances but that determination on that basis was unnecessary in the present case.

This appeal arose from the winding up of a solicitors' practice, Hughes Hooker. Two employees, Mrs Stevens and Mr Marc, brought claims in the Employment Tribunal for breach of contract, unauthorised deduction from wages, wrongful dismissal, unfair dismissal and redundancy payments against the firm and two partners, Mr Bielecki and Mr Bower. The Employment Tribunal found that the employees had been dismissed by notice given on 8 March 2001 to take effect on 30 March 2001 and held that both Mr Bielecki and Mr Bower were partners of Hughes Hooker for the purposes of identifying the employer.

Mr Bower appealed to the Employment Appeal Tribunal. The EAT concluded that the partnership had been dissolved by operation of law on 6 March 2001 when Mr Bielecki was struck off under section 34 of the Partnership Act 1890, but held that section 218(5) of the Employment Rights Act 1996 preserves continuity of employment where two partners are succeeded by one of them carrying on the business alone. The EAT therefore treated the employment as continuous.

The Court of Appeal was asked to determine the correct construction of section 218(5). The principal issues were (i) whether the wording "the partners" could sensibly include a single surviving partner so as to preserve continuity when a two-person partnership becomes a sole proprietorship, and (ii) whether section 218(2) (the transfer provision) was an alternative basis for preserving continuity.

The court adopted a purposive approach to section 218(5), aligning with the reasoning in Jeetle v Elster that the plural may include the singular in context and that Parliament intended comprehensive protection for employees against changes in the composition of those who employ them. The court therefore held that continuity of employment was preserved until 30 March 2001. The court noted that section 218(2) could also be capable of application in such circumstances but preferred not to decide the case on that basis because it was unnecessary and additional evidence and submissions would have been required.

The appeal is dismissed. The Court of Appeal concluded that section 218(5) of the Employment Rights Act 1996 should be given a purposive construction so that a change from two partners to one surviving partner carrying on the business does not break continuity of employment. The Employment Appeal Tribunal's decision that employment continued to 30 March 2001 was therefore upheld. The court further observed that section 218(2) might also be capable of applying but declined to decide the case on that basis.

The Employment Tribunal heard the original claims and issued its decision on 22 August 2002, finding dismissal by notice given on 8 March 2001 to take effect on 30 March 2001. The appellant's appeal to the Employment Appeal Tribunal was dismissed, the EAT holding that section 218(5) preserved continuity when a partnership of two became a sole proprietorship. Permission to appeal was granted and the present appeal to the Court of Appeal ([2004] EWCA Civ 496) was dismissed.