Schwarzenbach v Jones, and
Hyde Housing v Layton
Schwarzenbach (t/a Thames-Side Court Estate) Estate v Jones
If there is a change of an “associated employer”, there is not necessarily a change to the commencement of employment – regardless of who the employers (old & new) might be (Part XIV, Chapter I, Employment Rights Act 1996); but nor is the responsibility to prove that there is not a continuity a burden that initially falls upon the new employer (a transfer of burden of evidence arising from section 210(5)).
In the Employment Appeal Tribunal case between Schwarzenbach (t/a Thames-Side Court Estate) v Jones, there was no argument between the parties that an employment tribunal had erred when it had determined that 210(5) applied to cases falling under section 218.
Part XIV, Chapter I, of the Employment Rights Act deals with Continuous Employment. In the opening section – 210 – subsection 5 states that:
“A person’s employment during any period shall, unless the contrary is shown, be presumed to have been continuous.”
The legislation continues, at section 218 dealing with a change in the identity of the employer, albeit relating to the same “one employer” – an “associate employer”.
In this case, the employers were Swiss citizens who owned substantial property in Oxfordshire. Through a partnership, they employed the claimant, Mr D Jones, from 3 June 2013 until dismissal on 6 January 2014 – a length of service that would not provide sufficient employment to allow an unfair dismissal claim to be pursued…. except that prior to this employment period, the claimant was employed by a company called Culden Faw Ltd, a company that was owned by another (offshore) company, with full details of the company structure never established; together with service from Culden Faw, the claimant had sufficient length of service to bring an unfair dismissal claim, subject only to continuous employment.
The core question in the case was whether there was “continuous employment” such that the right to make a claim for unfair dismissal was available – and with the continuation of service through the “associated employer” established (the respondents were found to be associated employers, having ultimate control of Culden Faw Ltd through the network of companies that controlled it, ultimately by them – although the full details of the ownership or control were never clarified entirely), the appeal against the sufficient length of service finding failed.
Hyde Housing Association Ltd & ors v Layton
The unusual nature of this case was that the transferor – the “old employer” – was also the transferee – the “new employer”; this was due to the “transferor” becoming part of a larger organisation (known as the Hyde Group), a partnership of several employers that jointly employed the Claimant. The Claimant was still working for his previous employer, although with other employers sharing that title, and the responsibilities that go with it, too.
This structure, which evolved from the Claimant’s employer becoming part of a larger organisation without transferring the employment, complicated the question of whether there was (could be) a Transfer of Undertaking, as this required a transfer from one party to another, not as happened in this case: others added as employers, all jointly and severally employing all members of the Hyde Group, but no transfer from one party to another. And with that, the decision in this case was that there could be no transfer of undertaking, because the old employer was also the new employer, while TUPE’s construction requires a separate old & new employer.
As there was no TUPE transfer at a key date in the employment, there could not be the continuous employment required for an unfair dismissal claim.
But thinking about the earlier case of Schwarzenbach, one question that arises in Hyde Housing is: could this case have been argued on a Continuous Employment basis instead, relying on Employment Rights Act, Section 218(5): “If there is a change in the partners… – (a) the employee’s period of employment at the time of the change counts as a period of employment with the partners…”? There is no certainty that it would then have been found to be continuous employment – there wasn’t a change in the partners, only the introduction of new ‘joint employers’ – but something of an authority can be found in the case of Bower v Stevens & anor, EWCA Civ 496, 2004. Paragraph 38 of Bower repeats & adopts a passage from an earlier judgment:
“Where the sub-paragraph [218(5) of the Employment Rights Act in this instance, but earlier versions existed] says ‘shall count as a period of employment with the partners’ what is meant is ‘with the partners or any one of them who was previously the employer in his capacity of partner in the organisation, trade or business, as the case may be.”
It would appear from the Bower judgment that if Layton (who was represented by his wife in the employment tribunal), had argued that his length of service had been preserved by way of Continuous Employment (Part 14 of the Employment Rights Act), rather than by TUPE, he just may have had a different outcome. But as employment law can be a minefield, that is just a maybe, and will never be known…