ACAS v PCS conclusions





CASE NO. UKEAT/0160/17




















Note of Judgment of Soole J





n.b. a full hand-written note was taken and a transcript of the judgment will be available.

The Judge set out the findings of fact which the CAC reached and relevant law which they referred to in their judgement. He then went through the submissions of counsel before reaching the following conclusions.



  1. Considering first the alternative finding of the CAC that the Good Practice Services were an economic activity.

The starting point is the critical words in Regulation 2 on the definition of undertaking, namely

“carrying out an economic activity, whether or not operating for gain.”

I agree that the summary of the European jurisprudence as set out at [43] and [44] of the decision in Scattolon is an appropriate one. Clearly this reflects an amalgamation of decisions taken by the European Courts, however the definition of “economic activity” has equal application under the ICER Regulations as it does under Directive 77/187/EEC which relates to transfer of undertakings. It is important to note that the statements in Scattolon are not statutory and must be interpreted giving due consideration to the domestic law context.

It is correct that “economic activity” consists of offering goods and services on a given market and that this doesn’t require payment since it is equally applicable to services which are funded from another source. I accept that where the Panel states at [20] of its decision that

“it is sufficient if there is a remunerated provision of goods or services to a customer,”

this is evidently intended to reflect the broad application of the European case law. I therefore see there to be no inconsistency with the fact that 90% of services are funded by grant and the finding that these could constitute economic activity. I further agree with Miss Tuck that the definition can apply to a monopoly in a given market.

As to the exclusion of public powers referred to in Scattolon this must be understood in the context of domestic law. By taking too liberal a reading of the exclusion one would be in conflict with the ICER and would remove in effect the provisions which maintain the lack of distinction between public and private entities within the definition of undertaking. Since public bodies in the UK derive their powers from statute, too liberal a reading of the exclusion would mean that public bodies could not constitute an undertaking which is clearly in contradiction of the wording of the Regulations. Furthermore, to interpret the exclusion too widely would offend against the provisions in Regulation 42 regarding Crown Employment.

Miss Tuck submits this exclusion must be considered on a case by case basis with which I agree.

I further agree that the use of the indefinite article “an” in the phrase “an economic activity” is significant, and so it is enough to bring an undertaking within the Regulations if there is economic activity which is not de minimis or merely ancillary. I further agree with Miss Tuck that this conclusion is not in conflict with the decision in Moyer-Lee.

ACAS’ submission that its position as a conciliator within the ICER is a bar to the CAC’s jurisdiction is rejected.

In conclusion on the alternative finding of the CAC, we agree that Good Practice Services are economic activity, and having regard to the nature and percentage that those service represent for ACAS they cannot be said to be de minimis. Therefore, we have no doubt that the correct conclusion on the alternative finding was reached, and ACAS is an undertaking within the meaning of Regulation 2 ICER.

  1. The finding on the primary case by the CAC that all of the ACAS’ services constitute economic activity

It is evident that the Panel had the decision of Scattolon in mind at paras [19] – [24] and the Panel concluded that ACAS was not within the exclusion because it did not fall within the exercise of public authority since its activities were not governmental. In reaching its decision the CAC placed a great deal of emphasis on [42] of Scattolon, that an undertaking covered:

“any economic entity organised on a stable basis, whatever its legal status and method of financing.”

Having acknowledged the irrelevance of the method of funding the CAC concluded that both types of services provided by ACAS (90%:10%) are economic [24]. In this way, the Panel’s focus was on the economic activity of ACAS as an entity rather than on its activities. By way of striking example ACAS’ activities include conciliation under Employment Tribunals Act 1996, with such conciliation being provided by ACAS alone. The Respondent was not able to provide any real basis to support the contention that this was the provision of services on a given market and thus economic activity. Those conciliation services cannot be said to be economic even when acknowledging that a monopoly provision of services can be economic. The conciliation services fall squarely within the exercise of public power and thus outside the definition of Regulation 2.

It is unnecessary to consider in further detail the other services which ACAS provides, I conclude that it cannot be said that all services of ACAS are economic activity.

However, for the reasons already given this Appeal is dismissed.


Conor Kennedy

Old Square Chambers

10-11 Bedford Row

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