BT Managed Services Ltd v Edwards & Anor

Permission to appeal may be granted where a proposed challenge identifies an arguable error of law in deciding whether an absent employee was assigned to a transferring organised grouping under TUPE. The Court of Appeal may grant permission while reserving the substantive merits. An appeal is not necessarily hypothetical where the employee asserts dismissal and it remains necessary to determine which of two possible employers must defend the claim.

BT Managed Services Ltd sought permission to appeal from the Employment Appeal Tribunal, which had dismissed its appeal from the Employment Tribunal.

Mr Edwards had worked for Orange and transferred to BTMSL with the relevant business in 2009. In 2013, the business transferred from BTMSL to Ericsson. Mr Edwards had been absent through ill health since 2006 and had not effectively returned to work. The Employment Tribunal found that he was not assigned to the transferred division when the business moved to Ericsson. His employment contract therefore did not transfer, and BTMSL remained the proper defendant to his unfair dismissal claim. The EAT upheld that decision.

BTMSL argued that the tribunal had introduced an economic-contribution criterion inconsistent with the proper approach to assignment under the Transfer of Undertakings (Protection of Employment) Regulations 2006. The central issue was whether that approach disclosed an arguable error of law warranting permission to appeal.

Permission to appeal granted. The Court of Appeal did not determine the substantive TUPE assignment issue.

1. BTMSL advanced a proper legal challenge to the Employment Tribunal’s approach. It argued that the tribunal had treated economic contribution as a criterion for assignment under the Transfer of Undertakings (Protection of Employment) Regulations 2006. Its case was that the inquiry should focus on the department to which the employee was assigned and the organisational framework within which the employment operated, without an additional requirement of substantial economic activity. The court expressly declined to express a view on the ultimate merits, but held that the issue was proper for consideration and determination on appeal.
2. The proposed appeal was not wholly hypothetical. Although Mr Edwards continued to receive payments equivalent to permanent health insurance and had not actually been dismissed by BTMSL or Ericsson, he asserted that he had been dismissed. One or other company therefore had to defend the claim, making it appropriate to determine the proper party.
3. The applicant relied on Botzen [1984] 2 CMLR 50 and Fairhurst Ward Abbotts [2004] ICR 919. Those authorities were not analysed or decided upon at the permission stage. The court granted permission, leaving open whether Mr Edwards was assigned to the DNO contract division, whether his employment transferred to Ericsson, and whether the economic-contribution approach was legally correct.

Court of Appeal (Civil Division) — On 14 June 2016, Lord Justice Longmore granted BTMSL permission to appeal from the Employment Appeal Tribunal.

• Employment Appeal Tribunal — Dismissed BTMSL’s appeal and upheld the Employment Tribunal’s decision.
• Employment Tribunal — Found that Mr Edwards was not assigned to the DNO contract division at the transfer to Ericsson, so his employment contract did not transfer and BTMSL was the proper defendant to the unfair dismissal claim.