Moyer-Lee v Cofely Workplace Ltd

For the purposes of the Information and Consultation of Employees Regulations 2004, an “undertaking” is a legal entity capable of employing employees under contracts of employment. It is not merely a department, division or operational grouping within a single employer.

An undertaking may contain several establishments. An establishment may coincide with the undertaking where there are no separate units, but the concepts are not interchangeable. The statutory scheme’s choice between undertakings and establishments must retain practical meaning. The interpretation was consistent with Council Directive 2002/14/EC. In any event, a contract site lacking operational autonomy could not qualify as an undertaking even on the employees’ broader construction.

Employees assigned to facilities-management work under a University of London contract made a request under the Information and Consultation of Employees Regulations 2004. The 28 applicants represented 13% of the employees serving that contract, but only 0.3% of Cofely’s total workforce.

The Central Arbitration Committee held that the relevant undertaking was Cofely itself, so the request did not satisfy the 10% threshold in Regulation 7(2)(a). The employees appealed, arguing that an undertaking could be an operationally autonomous and identifiable grouping within a single employer, and that undertaking and establishment could overlap. The central issue was the proper meaning of “undertaking” in the Regulations.

1. Appeal dismissed. The Employment Appeal Tribunal, sitting alone, upheld the CAC’s decision and declined to refer the interpretative issue to the Court of Justice.
2. Regulation 3(3), read with the references throughout the Regulations to an undertaking’s employees, indicates that the undertaking is the employer. The references to an undertaking’s registered office, head office or principal place of business, and the statutory thresholds capable of applying to very large workforces, reinforce that construction.
3. An undertaking must therefore be a natural or legal person capable of entering into binding contracts of employment. A non-incorporated department, division or group of employees dedicated to a particular contract cannot itself be an undertaking.
4. The Directive’s distinction between an undertaking and an establishment must remain meaningful. The CAC had overstated the position in describing the concepts as mutually exclusive. An undertaking may include several establishments, and an establishment may be the same as the undertaking where the undertaking has no separate units. The broader employee construction would improperly collapse the distinction.
5. The purposive objective of promoting information and consultation did not require treating a smaller operational grouping as the undertaking. The Directive permits Member States to choose between an undertaking-based and an establishment-based scheme, and the United Kingdom had chosen the former.
6. The CAC also made an independent finding of fact that the University of London contract was not a stand-alone autonomous unit. The finding was unaffected by any alleged error in the CAC’s legal approach. Consequently, the appeal would have failed even on the employees’ proposed definition.

• Central Arbitration Committee: On 21 July 2014, held that the employee request was invalid because the University of London contract was not an undertaking and the applicants did not constitute 10% of Cofely’s employees.
• Employment Appeal Tribunal: Appeal dismissed. The CAC’s interpretation was upheld, subject to clarification that undertaking and establishment are not mutually exclusive.