Page & Anor v. Lakeside Collection Ltd (t/a Lavender Hotels) & Anor

In a TUPE appeal, the Employment Appeal Tribunal will not interfere with an Employment Tribunal’s factual conclusion unless the high threshold for perversity is met. A finding that employees were dismissed for an economic, technical or organisational reason may be upheld where it is supported by the evidence and forms part of a genuine reorganisation, even if a later business transfer occurs. The tribunal’s reasons must explain clearly why each party succeeded or failed, but they need not address every argument in the manner preferred by an appellant.

The appellants were directors and employees assigned to the hotel business operated by Prime Resorts Ltd, which entered administration. They were dismissed by the appointed receivers with effect from 3 February 2009. The hotel was later sold as a going concern to Lakeside Collection Ltd.

The Employment Tribunal held that the appellants had been unfairly dismissed by Prime Resorts, but that their employment had not transferred to Lakeside. It found that the dismissals arose from redundancy and an economic, technical or organisational reason entailing changes in the workforce, rather than from the eventual transfer. The appellants challenged the tribunal’s reasoning under regulation 7(1) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 and alleged perversity in its factual findings.

1. Appeal dismissed. The Employment Tribunal was entitled to conclude that the appellants were dismissed by the receivers on 3 February 2009 and that their employment did not transfer to Lakeside on the subsequent sale.
2. The tribunal’s finding that there had been no collusion between Mr Ross and Mr Sikorski was only part of its reasoning on the reason for dismissal. Read as a whole, the tribunal also found that the dismissals were caused by redundancy: fewer senior managers were required while the business was operated in administration. Mr Leader was retained because his knowledge assisted the receivers in trading the hotel, whereas the appellants were unnecessary for that purpose.
3. The finding was supported by Mr Ross’s accepted evidence and did not improperly treat the absence of collusion as the sole reason why regulation 7(1) did not apply. The appellants’ argument therefore disclosed no error of law.
4. The challenge to the finding that Mr Sikorski did not know what would happen to the appellants’ employment was a perversity challenge. Applying the high threshold identified in Yeboah v Crofton [2002] IRLR 634, the Employment Appeal Tribunal held that the Employment Tribunal was entitled to accept Mr Sikorski’s evidence. The earlier preparation of draft compromise agreements did not make the later finding logically inconsistent, particularly because the proposed sale had fallen through and the circumstances had changed.
5. The tribunal’s reasons were clear and adequate to explain why each party won or lost. They were Meek-compliant and satisfied Employment Tribunal rule 30(6). The appeal accordingly failed and was dismissed.

• Employment Appeal Tribunal: Appeal from the Employment Tribunal’s reserved judgment, promulgated with Reasons on 28 January 2010. The appeal was dismissed.
• Employment Tribunal: Found that the appellants were unfairly dismissed by Prime Resorts Ltd, but that their employment had not transferred to Lakeside Collection Ltd. It found that the dismissals were for redundancy and an economic, technical or organisational reason entailing changes in the workforce.