Beynon v Crash Accident Repair Services Ltd (Debarred) (Transfer of Undertakings : Transfer)

Whether there has been a relevant transfer requires a multi-factorial assessment of whether an economic entity retained its identity under regulation 3(1)(a) of the Transfer of Undertakings (Protection of Employment) Regulations 2006.

An Employment Tribunal must make the factual findings necessary for that assessment and give intelligible reasons for its conclusion. This includes explaining a preference for evidence where that evidence conflicts materially with earlier accounts and with other evidence. A bare acceptance of one witness's evidence, without discernible reasons or findings on the relevant factors, is an error of law.

The claimant had worked in a vehicle body shop operated by Aberdare Ford. In 2009 the respondent acquired the premises and employed him immediately thereafter. Following his later unfair dismissal, the Employment Tribunal decided at a remedies hearing that there had been no relevant transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006. That decision limited his continuity of employment and, consequently, his compensation and other monetary entitlements.

The claimant appealed, contending that the Tribunal had failed to apply the required approach, give adequate reasons, and had reached a perverse conclusion. The respondent was debarred from resisting the appeal. The central issue was whether the Tribunal's finding that no relevant transfer occurred could stand.

1. Appeal allowed unanimously. The Employment Tribunal's conclusion that there was no relevant transfer could not stand. Its decision materially affected the claimant's continuity of employment and his remedies for unfair dismissal.

2. Regulation 3(1)(a) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 requires a transfer of an economic entity which retains its identity. The question cannot be resolved simply from evidence of continuity of employment, premises, customers, staff, or terms and conditions. Those matters may be powerful evidence, but the required inquiry is multi-factorial.

3. The Tribunal had evidence supporting a transfer, including the immediate continuation of work, use of the acquired body shop, continuity of customers, and the former chief executive's statement that staff had transferred. It accepted the respondent's witness's contrary oral account, but gave no discernible reason for doing so. This was especially material because that witness's written accounts contained inconsistencies.

4. The Tribunal therefore failed to make the relevant findings of fact and failed to explain its reasoning. On reconsideration, the Tribunal must determine the issue by the multi-factorial approach in Cheesman v Brewer Contracts Ltd, [2001] IRLR 144.

5. The specified parts of the Employment Tribunal's judgment were set aside. The continuity issue and the consequential assessment of remedy were remitted to a differently constituted Employment Tribunal.

• Employment Appeal Tribunal: Allowed the claimant's appeal unanimously, set aside the relevant parts of the Employment Tribunal's judgment, and remitted the continuity and remedy issues to a differently constituted Employment Tribunal.
• Employment Tribunal at Cardiff: On 10 January 2012, held that the 2009 change of employer was not a relevant transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006.