Services For Education (S4E Limited) v White & Anor

For the continuity provisions in section 218(2) of the Employment Rights Act 1996 to apply on a transfer of an undertaking, the employee must have been employed by the transferor at the time of the transfer. Section 212 cannot bridge a gap between employment with different employers.

The time of a business transfer may, however, be a process rather than an instantaneous event. Its temporal extent is a question of fact and degree. The tribunal may consider the actual incidents of the particular transfer, including arrangements integral to transferring staff and securing pension provision. It is not confined to the formal execution of transfer documents. Preparatory steps alone may not suffice.

The Claimant had worked for Birmingham City Council as a sessional music teacher under successive academic-year fixed-term contracts. His final Council contract ended on 31 July 2013. The music service transferred to S4E on 1 September 2013, and the Claimant then worked for S4E.

The Employment Tribunal held that his continuity of employment was preserved under section 218(2) of the Employment Rights Act 1996. S4E appealed, contending that he was not employed by the Council immediately before the transfer. The Claimant cross-appealed on a new argument under the fixed-term employees regulations.

The central issue was whether 31 July 2013 fell within the time of the transfer for the purposes of section 218(2).

1. Appeal dismissed. The Employment Tribunal was entitled to find that the Claimant had been employed by the Council at a time during the transfer process. His continuity therefore ran from his Council employment into his employment with S4E under section 218(2) of the Employment Rights Act 1996.

2. Section 218(1) confines the statutory continuity provisions, subject to section 218, to employment with one employer. Accordingly, section 212(3)(b) could not bridge a gap between 31 July 2013 and the time of the transfer in order to make the Claimant an employee of the Council at that time. The Employment Tribunal erred in relying on that route, but the error was immaterial because its factual finding on the time of transfer sustained its conclusion.

3. The expiry of the Claimant’s final fixed-term contract was a statutory dismissal. If it had occurred before the transfer process began, continuity would have been broken and section 218(2) could not apply. The question was therefore whether the dismissal date fell during the transfer process.

4. Following Clarke & Tokeley Ltd v Oakes, the time of a transfer can extend over a period. Its identification is a question of fact and degree. The Employment Tribunal correctly treated this public-sector transfer as a complex process. It was entitled to rely on matters including pension arrangements, steps concerning the transfer of staff, and consultation obligations. The authority does not restrict a transfer process to particular transactions or to the instant of formal completion.

5. Cross-appeal dismissed. The proposed fixed-term employees argument was new, inconsistent with the Claimant’s case below, and would have required further findings and consideration of justification. No exceptional circumstances justified permitting it to be advanced for the first time on appeal.

• Employment Appeal Tribunal: S4E’s appeal from the Employment Tribunal was dismissed. The Claimant’s cross-appeal was also dismissed.
• Employment Tribunal: In a reserved judgment sent on 4 September 2014, the Tribunal held that the Claimant’s continuity of employment was preserved from Birmingham City Council to S4E under section 218(2) of the Employment Rights Act 1996.