MacKenzie v Hotston & Ors [1998] UKEAT 684_98_0109 (1 September 1998)

JUDGMENT PRELIMINARY HEARING - EX PARTE © Copyright 1998 APPEARANCES For the Appellant THE APPELLANT IN PERSON JUDGE HICKS QC : The respondents, Ms Hotston, Miss Greener, and Mrs Plumb, were three of the employees of the appellant, Mr MacKenzie, who practised as a solicitor. He has told us that it was in evidence before the tribunal, although it is not in their findings, that the total staff numbered ten, of whom the three were fee earners, but the respondents/applicants, as the tribunal found, were in secretarial employment, Ms Hotston an officer manager, Miss Greener a legal secretary, and Mrs Plumb a legal assistant. On 13th August 1997 Mr MacKenzie was sentenced to two years' imprisonment and therefore immediately became unable himself to carry on his practice as a solicitor, he being the sole principal and practitioner of the firm. The Law Society, as is always the case in such circumstances, intervened and imposed an extremely short time, 48 hours from 19th August 1997, within which the practice had either to be sold to a qualified solicitor or firm of solicitors who could carry it on lawfully or come under the direct control and intervention of the Law Society. In the event there was an agreement on 21st August 1997 for the sale of assets and goodwill, as the tribunal found. Contracts of employment were expressly excluded, except that the purchaser was to offer employment to the second applicant, Miss Greener. The Industrial Tribunal in its extended reasons found that that agreement did not amount to a sale of the business as a going concern and that staff were not guaranteed continuity of employment rights. The tribunal then went on to find that all the staff were dismissed by Mr MacKenzie and proceeded to deal with the assessment of compensation. Mr MacKenzie seeks to appeal on a number of grounds. Ground I(a) is that: "No staff were dismissed by the Respondent and there was no evidence that the Respondent had in any way communicated to the Applicants that they were dismissed." and (b): "Having found that the Applicants were dismissed the tribunal concluded that each of the Applicants had been made redundant which finding was wrong in law." In our view there is nothing in those grounds as free-standing separate grounds. They are closely connected with a ground on which we propose to direct that the matter proceed to a full hearing, namely the incidence of the Transfer of Undertaking Regulations, but absent that point (and therefore accepting for present purposes that the tribunal's finding that the sale of the business was not sale as a going concern must be taken to be a finding that it was not a transfer within the Regulations) then the findings of dismissal and redundancy were inevitable because by the sale of the practice Mr MacKenzie went out of business and his business ceased to exist, which is undoubtedly a redundancy situation. By the same token, the employment of the applicants by him ceased. So as separate points, I(a) and (b), in our judgment, are unarguable and must be dismissed. However, they are closely associated with ground I(c) and II(a) and (b), which we propose to allow to proceed to a full hearing, and we direct that that happens. It may well be that as a result of the discussion which took place between Mr MacKenzie and this tribunal in the course of his argument he may wish to consider whether he wishes to apply for leave to amend I(c) and II(a) and (b) to reflect perhaps more accurately the nature of the points which he wishes to raise, but that is a matter for him. So far as we are concerned we simply direct that those proceed to a full hearing and for that reason we say no more about their merits or prospects of success. Then the remaining grounds concern compensation and we can deal with those very briefly because we propose to direct that II(c) and IV(d) proceed to a full hearing. They both take what can briefly be described as a mitigation point. In one case the applicant's solicitors have already written conceding that the point is arguable, if not more. We say no more about those two points they will proceed to a full hearing. The other two points taken in terms of compensation amount to what Mr MacKenzie in his Notice of Appeal describes as 'counterclaims' which he had against two of the applicants. He withdraws one of those, the one against Mrs Plumb, and we need say no more about that, except that we dismiss the appeal on that ground, which is IV(a) and (b). As to the alleged counterclaim against the other applicant, Ms Hotston, concerns a computer system which she retained. The matter is dealt with in the tribunal's decision. The position was that the Chairman had indicated that any award in favour of Ms Hotston would be conditional upon her returning the system. As is recorded in the decision, Ms Hotston voluntarily undertook to do so. In our view there was absolutely nothing wrong with the tribunal's acceptance of that undertaking rather than imposing a formal order. That is one reason why the appeal on that point must be dismissed. The second is that in any event such a counterclaim was a common law matter. There is no ground, as far as we can see, on which the statutory compensation could have been reduced on that account. Dealing with the matter by way of either a condition or by way of an undertaking may well have been within the jurisdiction of the tribunal. The matter was dealt with in that way. Therefore that ground of appeal, for those reasons, fails and it is dismissed. The result in terms of the formal order is that the appeal is to proceed on grounds I(c), II and IV(d) only. It is directed that the Chairman be invited to comment on two passages in the grounds of appeal in which there is complaint of the Chairman's refusal to allow particular questions. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII