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Transfer of undertakings: No primary test of whether operation is asset or labour intensive

This report relates to 1 case(s)

  • expand disabled

    McCormick and others v Scottish Coal Company Ltd [2005] All ER (D) 104 (Sep) CS (0 other reports)

Key points

In Scottish Coal Co Ltd v McCormick and others [2005] CSIH 68, the Scottish Court of Session holds:

  • The guidance given by the European Court of Justice (ECJ) in Spijkers [1986] ECR 1119, on determining whether an economic entity has retained its identity for the purpose of deciding whether a "relevant transfer" has taken place is still to be followed. No single factor is likely to be decisive.
  • The later ECJ judgments in Süzen [1997] ECR I-1259 and Oy Likenne [2001] IRLR 171 do not set out a rigid primary test that an economic undertaking must first be characterised as "asset reliant" or "labour intensive" or that these categories are mutually exclusive.
  • All the circumstances must be examined as no one factor may be decisive in determining whether or not the Transfer of Undertakings (Protection of Employment) Regulations 1981 apply. In this case, the matter was remitted to the tribunal for a fuller fact-finding exercise.