Sean Pong Tyres Limited v Barry Moore (debarred)

The Employment Appeal Tribunal dismissed the appellant's challenge to the Employment Tribunal's refusal to permit a last-minute amendment to plead that the employer's liability had transferred under TUPE. The EAT held that (i) liability for the claimant's unfair constructive dismissal under s 94 ERA 1996 could not have transferred because the claimant had not been employed at the time of the putative transfer (Humphreys v Oxford University applied); (ii) the employer's primary liability under ss 39 and 40 of the Equality Act 2010 does not transfer to a transferee merely because an alleged tortfeasor employee moved employer, even though vicarious liability under s 109 may be relevant to establishing employer liability; and (iii) any procedural error in refusing the amendment was not material because it could not have changed the outcome. The Tribunal properly applied Selkent principles and exercised its case management discretion in refusing the amendment as a very late, fundamentally different defence that would have caused substantial prejudice and delay.

This is an appeal from an Employment Tribunal judgment arising from a three-day final hearing. The claimant succeeded at first instance on claims of unfair constructive dismissal (s 94 Employment Rights Act 1996) and discrimination/harassment under the Equality Act 2010. At the start of the final hearing the respondent/employer sought to amend its response to plead that, by virtue of a subsequent TUPE transfer, liability for the claimant's claims had passed to a transferee company and applied to add the transferee as a party.

The Employment Tribunal refused that late application on case-management grounds under the Selkent principles, finding the amendment raised an entirely new factual and legal issue (including matters that would require evidence from the transferee), was made at the 11th hour after evidence had been given, and would cause abandonment of the hearing and major delay. The Tribunal balanced prejudice and concluded that prejudice lay with the claimant.

The EAT considered the appeal and addressed two linked legal questions: (i) whether, as a matter of substantive law, the respondent's liabilities in relation to the claimant's unfair dismissal and Equality Act claims could have transferred under regulation 4(2) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 where the alleged tortfeasor employee moved employer but the claimant did not; and (ii) whether the Employment Tribunal erred in law in refusing the amendment and in treating the TUPE point as a non-jurisdictional, case-management issue.

• Nature of the claim/application: the claimant sought remedies for constructive unfair dismissal and discrimination/harassment; the respondent sought permission to amend its response to plead transfer of liability under TUPE and to join the transferee.
• Issues framed by the court: whether employer liability for unfair dismissal or under the Equality Act transfers under TUPE where the claimant did not transfer but an alleged tortfeasor employee did; and whether the Tribunal misapplied the law in refusing the amendment.
• Court’s reasoning: the EAT concluded (a) unfair dismissal liability does not transfer to a transferee if the claimant was not employed at the time of transfer or was dismissed for reasons unconnected with a transfer (Humphreys applied); (b) an employer's primary liability under the Equality Act does not, in ordinary circumstances, transfer with a different employee's contract merely because that employee moved employer, although vicarious liability for a transferring employee may transfer in appropriate circumstances (analysis considered Martin/Bernadone and Doane but distinguished them); and (c) the Employment Tribunal did not err in its case-management exercise in refusing a very late, prejudicial amendment under Selkent principles, and any possible error would have been immaterial to the outcome.

Appeal dismissed. The EAT held that the Employment Tribunal was entitled to refuse the late amendment under ordinary Selkent case-management principles and that, as a matter of substantive law, the respondent’s primary liability for the claimant’s unfair dismissal and Equality Act claims would not have transferred to the putative transferee where the claimant did not transfer, so any error would have been immaterial to the result.

Employment Tribunal judgment following a three-day final hearing (31 January–2 February 2022), judgment sent 7 February 2022; permission to appeal to the EAT granted by HHJ Barklem on the papers (order dated 13 December 2022); appeal to Employment Appeal Tribunal disposed of by Judge Stout, Neutral Citation [2024] EAT 1, judgment handed down 29 January 2024. Case No: EA-2022-000617-JOJ.