Ejiofor (t/a Mitchell & Co Solicitors) v Sullivan & Ors (Transfer of Undertakings : Transfer)

For a transfer under regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations, the undertaking must not be one carried on for an unlawful purpose as such. It is not necessary that every activity undertaken before the transfer was lawful. A lawful business may therefore transfer even if regulatory requirements were breached at times.

Whether an economic entity transferred is assessed by its economic reality and the whole factual picture. An appellate court will not interfere with an Employment Tribunal’s sustainable factual findings on that issue.

An adjournment is required only where it is needed for a fair hearing. Where the absent party has not shown what their attendance would add, and a representative could address the tribunal’s concerns or seek time but does neither, fairness need not require further investigation of doubtful medical evidence.

The Employment Tribunal held that Ms Sullivan’s employment transferred on 1 April 2011 from the solicitors’ practice formerly operating at Kensington High Street to Mr Ejiofor, trading as Mitchell & Co. It found that an organised grouping of staff, client files, premises and operating arrangements continued as an identifiable economic entity. It subsequently refused to adjourn a hearing on unfair dismissal and remedies after Mr Ejiofor did not attend and produced a medical certificate.

Mr Ejiofor appealed both decisions. He contended that client files had not transferred and that a practice which had operated unlawfully after its solicitor principal was struck off could not be transferred under the Transfer of Undertakings (Protection of Employment) Regulations. He also contended that fairness required the Employment Judge to investigate the medical evidence before refusing an adjournment.

1. Both appeals were dismissed. The Employment Tribunal was entitled to find a relevant transfer under regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations.

2. The transfer issue required an assessment of economic reality, rather than a construction of the consultancy agreement in isolation. The agreement’s allocation of income from previous clients implicitly recognised their transfer to Mitchell & Co. That conclusion was reinforced by the continuation of work on existing files by the same staff, payment of their salaries by Mitchell & Co, the transfer of premises and client funds, and Mrs Aaronson’s inability to conduct the work other than through a properly qualified firm. The Tribunal’s finding was supported by ample evidence.

3. Adopting the propositions recorded in Rose & Hymes PLC v Duke, EAT, 10 December 2012, at paragraph 24, the EAT held that an undertaking must itself be lawful in the sense that it is not conducted for an unlawful purpose. Regulation 3 does not require every activity of an otherwise lawful undertaking to have been lawful. A solicitors’ practice providing legal advice for profit was not unlawful per se. Possible gaps in regulatory oversight or qualifications did not prevent its transfer. The appeal on TUPE therefore failed.

4. The refusal to adjourn was a fair exercise of the Employment Judge’s discretion. Although a tribunal may seek further medical evidence where it doubts an asserted inability to attend, the circumstances did not require it to do so. Mr Ejiofor had provided no witness statement or indication of evidence, cross-examination or submissions for which his attendance was necessary. His representative was present when the concerns about the certificate were aired, but did not seek time, request further enquiry, make a review application, or advance the merits or quantum of the claims.

5. The Employment Judge was entitled to find that the certificate was produced to add spurious weight to a late and weak adjournment application. The Tribunal could therefore proceed without further investigation.

• Employment Appeal Tribunal: Both appeals by Mr Ejiofor were dismissed.
• Central London Employment Tribunal: Employment Judge Stewart, decision sent on 8 November 2012, held that Ms Sullivan’s employment transferred under the Transfer of Undertakings (Protection of Employment) Regulations on 1 April 2011.
• Central London Employment Tribunal: Employment Judge Burns, decision sent on 25 March 2013, refused an adjournment of the later liability and remedies hearing.