Vatre Terracotta Ltd v Baker & Anor

A transferee alleging breach of the employee-liability-information duty must identify information that was not provided and show loss attributable to that breach. A claim for compensation is not an indemnity against an employee’s dismissal claim. The primary time limit runs from the transfer date and an extension for responding to the employee’s claim does not extend it.

A Polkey reduction requires evidence that, and when, a fair dismissal would have occurred. An appeal will not normally be remitted merely to allow a party to fill evidential gaps. Where any procedural error could not affect a conclusion that is plainly correct, the appeal should be dismissed rather than remitted.

The Employment Tribunal found that Mays Terracotta’s business transferred to Vatre Terracotta Ltd on 1 March 2010. It dismissed Mays from the proceedings, held that Vatre Terracotta had unfairly dismissed Mr Baker, and awarded compensation.

Vatre Terracotta appealed. It contended that the Tribunal had failed to determine its purported claim against Mays for employee liability information, had improperly prevented a Polkey submission, and had wrongly discharged Mays after finding a relevant transfer. The central issue was whether any alleged procedural defect required remission when the proposed claims and arguments could not succeed.

1. Appeal dismissed. Even assuming that the alleged procedural irregularities occurred, they could not affect the result. The Tribunal’s conclusions were plainly and unarguably correct, so remission would serve no purpose.

2. Vatre Terracotta’s complaint under regulations 11 and 12 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 was bound to fail. It had not identified employee liability information which Mays had failed to provide. It knew that Mr Baker was employed by Mays and he continued working after the transfer. Its real complaint was its belief that no relevant transfer had occurred, which was not information required by regulation 11.

3. Further, compensation under regulation 12 is confined to loss sustained by the transferee which is attributable to a breach of regulation 11. It does not provide an indemnity against the employee’s claims. The complaint was also out of time: the three-month period ran from the transfer date, and the extended time for lodging an ET3 did not engage the reasonable-practicability provision in regulation 12(2)(b).

4. The proposed Polkey argument had no evidential basis. The relevant question was whether, and if so when, Vatre Terracotta would fairly have dismissed Mr Baker during the compensable period. No evidence addressed that question. An appellant is not entitled to a remitted hearing in order to repair omissions in its evidence.

5. Once the Tribunal found a relevant transfer, Mr Baker’s employment continued with Vatre Terracotta. Mays therefore had no further role in the proceedings, and the remaining issue was compensation payable by Vatre Terracotta for the unfair dismissal.

• Employment Appeal Tribunal — dismissed Vatre Terracotta’s appeal and upheld the Employment Tribunal’s conclusions.
• Employment Tribunal, Brighton — found a relevant transfer on 1 March 2010, dismissed Mays from the proceedings, found Vatre Terracotta had unfairly dismissed Mr Baker, and awarded £19,913.30 compensation.