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Wain & Ors v. Guernsey Ship Management Ltd


Court of Appeal

Although there had been factors for and against a finding that a group of short-term contract employees had formed an economic entity for the purposes of the Transfer of Undertakings (Protection of Employment) Regulations 1981, no factor had been conclusive and the employment tribunal had been entitled to make a finding of fact that the group was not an economic entity.The appellants (W) appealed against a dismissal of their claims that their employment had been transferred to the respondent (G) pursuant to a transfer of an undertaking to which the Transfer of Undertakings (Protection of Employment) Regulations 1981 applied. W had each been employed on short-term contracts, which were renewed from time to time, by a company (X) that supplied personnel for ferry operations. They each did different jobs and worked on different vessels. X decided to employ only permanent employees and that the short-term workers would be supplied by G. G then offered W the same work that they had carried out for X, but on a lower rate of pay. W commenced proceedings claiming that the short-term contract employees were an economic entity that had been transferred to W as an undertaking, and that under the Regulations the terms of their contracts of employment including rate of pay were preserved after the transfer. The employment tribunal found that the sub-group of short-term contract employees was not an economic entity and that their claim failed. The Employment Appeal Tribunal decided that that was a finding of fact that the tribunal had been entitled to make. W argued that the tribunal's findings of fact had been wrong, and that the short-term contract employees were a discrete part of X's business and their common role and position in X's business made them into an economic entity, and the fact that they did not perform the same work did not prevent that.

HELD: Although W could be said to belong to a group that could be identified because all members had short-term contracts and fulfilled a specific role in X's business, they all did different work on different vessels. Neither factor was conclusive and the tribunal had been entitled to hold that the group of short-term contract employees were not an economic entity, Cheesman v R Brewer Contracts Ltd (2001) IRLR 144 applied.
Appeal dismissed
For the appellants: John Hendy QC, Colin Bourne For the respondent: James Goudie QC, James Cornwell
For the appellants: Bridge McFarland
For the respondent: Simpson & Marwick
LTL 3/4/2007 (Unreported elsewhere).

[2007] 1 ICR 1350 (CA)

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