Oakland v Wellswood (Yorkshire) Ltd

Continuity of employment may be established through the change-of-employer provisions in the Employment Rights Act 1996. Where a trade, business or undertaking transfers, employment with the transferor counts as employment with the transferee and the transfer does not break continuity. This statutory route may determine the qualifying period without resolving whether the transfer falls within regulation 8(7) of the Transfer of Undertakings (Protection of Employment) Regulations 2006. An appellate court may entertain a new point not taken below in rare circumstances where it is a pure point of law, causes no injustice, and is decisive. The appeal was therefore allowed, while the difficult TUPE insolvency issue was left unresolved.

Mr Oakland was employed by Wellswood Limited, Oldco, until its entry into administration in December 2006. A newly incorporated subsidiary, Newco, acquired Oldco’s business and assets, and five of seven employees, including Mr Oakland, became Newco employees. He was dismissed shortly before completing one year with Newco and claimed unfair dismissal.

The Employment Tribunal held that regulation 8(7) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 prevented the employment contract from transferring. The Employment Appeal Tribunal, sitting through HHJ Peter Clark, dismissed his appeal. Before the Court of Appeal, the central issue became whether section 218 of the Employment Rights Act 1996 preserved continuity of employment and whether that new point could be taken for the first time on appeal.

1. The appeal was allowed. Lord Justice Moses gave the judgment. Lord Justice Rix and Lady Justice Smith agreed.
2. As a general rule, an appellant cannot take a point for the first time on appeal where it could have been taken earlier and doing so might cause injustice by depriving the other party of the opportunity to raise relevant arguments or facts at trial. In rare circumstances, however, a new point may be entertained where there is no injustice and the point is decisive. The authorities reviewed in Glennie v Independent Magazines (UK) Ltd [1999] IRLR 719, including Kumchyck v Derby City Council [1978] ICR 116 and Wilson v Liverpool Corp [1971] 1 WLR 302, supported that approach.
3. The new point was one of pure law and required no factual enquiry. Newco had notice of it from the appellant’s skeleton argument and from the permission granted by Mummery LJ. There was therefore no injustice in considering it.
4. Under section 218(2) of the Employment Rights Act 1996, where a trade, business or undertaking is transferred, the employee’s period of employment with the transferor counts as employment with the transferee and continuity is not broken. The transfer of Oldco’s business to Newco was conceded. Mr Oakland’s approximately three years with Oldco therefore counted towards the period just short of one year with Newco, satisfying the one-year requirement in section 108(1).
5. The Court of Appeal declined to determine whether administration necessarily excluded the application of regulation 8(7) of the Transfer of Undertakings (Protection of Employment) Regulations 2006, or how Article 5 of Directive 2001/23/EC should be construed. That issue was unnecessary to the result and the relevant parties were not represented.

• Court of Appeal (Civil Division): Allowed the appeal on the basis that section 218 of the Employment Rights Act 1996 preserved continuity of employment.
• Employment Appeal Tribunal: HHJ Peter Clark dismissed Mr Oakland’s appeal.
• Employment Tribunal: Regional Employment Judge Sneath held that the administration fell within regulation 8(7) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 and that the contract of employment had not transferred.