Decision

Question 1

1. Introduction

Accepted Answer

1) This case concerns an application to the Central Arbitration Committee (the CAC) under Regulation 20 of the Transnational Information and Consultation of Employees Regulations 1999, as amended by the Employment Rights (Amendment) (EU Exit) Regulations 2019 (TICER). TICER requires certain United Kingdom employers with transnational businesses to establish, inform and consult a European Works Council (an EWC) about transnational issues across the UK and member states of the European Union. The obligations on relevant employers under TICER remain in force despite changes to TICER following the UK’s exit from the European Union^{[footnote 1]}.

2) The respondent to the application is 2 Sisters Food Group (the Employer). This is a large poultry processing and food manufacturing company. It is a limited company registered in England & Wales and its full and correct legal title is 2 Sisters Food Group Limited. In broad terms, the application asserts that the central management of the Employer had failed to establish an EWC as required by regulation 18. Under regulation 20(4), where the CAC finds such an application to be well-founded, it must make a decision to that effect and may make an order requiring the central management to take such steps as are necessary to establish an EWC.

3) The application has had a long and unusual history which it will be necessary to describe in some detail.

Question 2

2. Background

Accepted Answer

4) On 4 October 2022 Mr Philip Sack of EWC Legal Advisers submitted the application to the CAC on behalf of Mr Iulian Firea (the Complainant). The Employer submitted a response to the CAC dated 18 October 2022.

5) In accordance with section 263 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the Act), the CAC Chair established a Panel to consider the case. The Panel at that time consisted of Professor Gillian Morris as Panel Chair and Mr David Coats and Mr Rob Lummis as Members. Upon Professor Morris’s and Mr Coats’s terms of office with the CAC ending, the CAC Chair appointed Mr Stuart Robertson as Panel Chair and Mr Paul Morley as a Panel Member, to replace them.

6) Following a hearing on 12 January 2023, by a decision promulgated on 23 January 2023 the then Panel found that, because of a failure of the Employer’s central management, an EWC had not been established at all in accordance with the provisions of the Schedule to the Regulations, as required by regulation 18. Having so decided, however, the then Panel exercised its discretion under regulation 20(4) not to make an order requiring the Employer to take any steps at that stage.

7) The decision of 23 January 2023 set out the complaint in full as well as the history of the interactions between the parties from July 2015 when the original request to establish a special negotiating body under the terms of TICER was sent to the Employer’s management in Poland and the United Kingdom. This decision should be read in conjunction with that decision.

8) The then Panel stated in its decision that if the CAC was informed that the central management had failed to take such steps as were necessary to establish an EWC in accordance with the provisions of the Schedule by 30 June 2023, the CAC would give fresh consideration to whether an order should be made in relation to the complaint. The deadline for the Complainant to inform the Panel that the central management had failed to take such steps was 31 July 2023. The parties were informed that if the CAC was not informed that the central management had failed to take the steps necessary to establish an EWC in accordance with the provisions of the Schedule by the deadline, the case would be closed.

9) On 7 March 2023 the Employer presented an appeal to the Employment Appeal Tribunal (the EAT) against the decision of 23 January 2023. On the same date the Complainant made an application to the EAT for a penalty notice in accordance with regulation 20(7). Then on 5 July 2023 the Complainant wrote to the CAC stating that the central management had failed to take the necessary steps to establish an EWC in accordance with the provisions of the Schedule by 30 June 2023. In view of the EAT appeal, the Complainant stated that he would await an invitation from the CAC to lodge submissions as to whether an order should be made, but did not want the CAC to close the case.

10) On 6 July 2023 the CAC wrote to the parties inviting submissions as to whether an order should be made. On 26 July 2023 the Complainant asked the CAC to make an order under regulation 20(4) in the terms set out in paragraph 30 of the CAC’s decision of 23 January 2023, namely:

“1. To provide details on employee numbers at each location within the Relevant States so as to enable employees to ascertain the number of representatives for each country that will form an EWC under the TICER subsidiary requirements;

2. To liaise with local management in each Relevant State to facilitate the election or appointment of EWC members in accordance with national law or practice;

3. Once established, to commit in writing to provide the EWC representatives with the means required to undertake training in accordance with regulation 19B and to permit them to take paid time off to undertake that training in accordance with regulations 25 and 26;

4. To hold a first meeting of the EWC in accordance with paragraph 7 of the subsidiary requirements.”

11) On 28 July 2023 the Employer asked that the CAC refrain from making any order until the EAT had assessed its appeal, which it contended raised an important matter to be determined. Following correspondence on the issue, the Panel informed the parties that it did not consider that there were any grounds for a stay and listed the case for a hearing on 17 November 2023 to determine whether an order under regulation 20(4) of TICER should be made and, if so, in what terms.

12) Before any hearing took place, however, the Complainant requested that the hearing be vacated on the basis that the parties had entered into discussions with regard to the establishment of an EWC. The Panel granted the request and matters were stayed pending the outcome of these discussions. It appears that at first, the discussions progressed satisfactorily.

13) By way of an Order sealed on 20 May 2024 following the parties having agreed terms, the EAT dismissed on withdrawal both the Employer’s appeal and the Complainant’s application for a penalty notice under Regulation 20(7).

14) On 23 October 2024 the Complainant informed the CAC that the Employer was asserting that as a result of a divestment of certain businesses, TICER no longer required it to establish an EWC under the Regulations and called upon the Employer to explain to the Panel why it took this view.

15) In an email dated 7 November 2024 the Employer stated that on 13 October 2024, the Employer’s group had sold 2 Sisters Europe B.V (BV) to Boparan Private Office Limited (Private Office). It contended that as such, BV was no longer part of the Employer’s group for the purposes of TICER. This was because:

15.1 regulation 2(1) of TICER defines a ‘group of undertakings’ as “a controlling undertaking and its controlled undertakings”;

15.2 having regard to regulation 3 of TICER, which defines the terms ‘controlling undertaking’ and ‘controlled undertaking’, and notwithstanding the similarity of their names, the Employer’s immediate parent company, Boparan Holdings Limited (Holdings), and Private Office were not members of the same group of undertakings. The ‘controlling undertaking’ of the group of which Holdings was a member was Boparan Holdco Limited (Holdco), whereas Private Office was the ‘controlling undertaking’ of the separate group including BV;

15.3 Consequently, the Employer’s group was no longer a ‘Community-scale group of undertakings’, as defined in regulation 2(1) of TICER. This was because, although before 13 October 2024 the Employer and BV were part of the same group with employees in a number of countries, including the UK, the Netherlands and Poland, since that date, the Employer only had employees in the UK.

15.4 In light of these very recent developments, it was the Employer’s position that the CAC should now close the above matter and take no further steps.

Question 3

3. The hearing

Accepted Answer

16) The Panel held a formal hearing on 24 March 2025 to decide whether an order should be made under regulation 20. The names of those who attended the hearing appear in the appendix to this decision. The hearing took place remotely on the Teams platform. Mr Sack represented the Complainant and Mr Andrew Burns, King’s Counsel, the Employer.

17) Ahead of the hearing the parties had provided written comments on each other’s cases, and written submissions and agreed bundles of authorities, correspondence and evidence for use at the hearing. Mr Sack and Mr Burns KC made oral submissions at the hearing for which the Panel were grateful. The Panel refers in detail to this material below.

Question 4

4. The relevant provisions of TICER

Accepted Answer

18) It is useful to identify at the outset the relevant provisions of TICER. Under regulation 5(1), the “central management” is responsible for creating the conditions and means necessary for the setting up of an EWC in a Community-scale undertaking or Community-scale group of undertakings where the central management is situated in the United Kingdom.

19) By regulation 2(1), “central management” means the central management of a Community-scale undertaking, or in the case of a Community-scale group of undertakings^{[footnote 2]}, the central management of the controlling undertaking; and a ‘group of undertakings’ means “a controlling undertaking and its controlled undertakings”.

20) Then under regulation 3:

(1) “Controlling undertaking” means an undertaking which can exercise a dominant influence over another undertaking by virtue, for example, of ownership, financial participation or the rules which govern it and “controlled undertaking” means an undertaking over which such a dominant influence can be exercised.

(2) The ability of an undertaking to exercise a dominant influence over another undertaking shall be presumed, unless the contrary is proved, when in relation to another undertaking it directly or indirectly—

(a) can appoint more than half of the members of that undertaking’s administrative, management or supervisory body;

(b) controls a majority of the votes attached to that undertaking’s issued share capital; or

(c) holds a majority of that undertaking’s subscribed capital.

21) TICER does not contain any definition of the term “undertaking”.

Question 5

5. The relevant facts

Accepted Answer

22) As already stated, in its decision dated 23 January 2023 the CAC decided under regulation 20 that, because of a failure of the Employer’s central management, an EWC had not been established at all in accordance with the provisions of the Schedule to the Regulations as required by regulation 18. Having so decided, however, the then Panel exercised its discretion under regulation 20(4) not to make an order in relation to the complaint at that stage.

23) The Employer did not take the necessary steps to establish an EWC within the period to 30 June 2023 allowed by the CAC’s January 2023 decision, and has not done so thereafter.

24) The Employer, 2 Sisters Food Group Limited, was and is a wholly-owned subsidiary of Boparan Holdings Limited (Holdings). Holdings in turn was and is a subsidiary of Boparan Holdco Limited (Holdco). It carried on its poultry business in the United Kingdom, and in the Netherlands and Poland through its associated companies 2 Sisters Europe BV (BV)) and Storteboom Food Group. These, it is not disputed, constituted a Community-scale group of undertakings within regulation 2(1) of TICER^{[footnote 3]}. This was the basis for the Employer being accepted to be a Community-scale group of undertakings when the CAC made its decision in January 2023.

25) On 2 September 2024 the Employer announced it was selling its European poultry business to Boparan Private Office Limited (Private Office) for over €200m. This was stated to be to improve the Employer’s balance sheet and allow new investment in the business. The transaction completed in October 2024.

26) This meant that from October 2024, the Employer remained owned by Holdings and ultimately by Holdco but carried on business and had employees only in the United Kingdom. BV and Storteboom became owned by Private Office and carried on business and had employees in the Netherlands and Poland but not in the United Kingdom.

27) The published accounts show that Holdco and Private Office operate as separate groups of companies through trading subsidiaries. The Complainant does not suggest that Holdco controls Private Office or vice versa. However, they are in common ownership. The shares in Holdco are held by Mr Ranjit Singh Boparan (Mr Boparan), who is stated at Companies House to own more than 50% but less than 75% of the shares, and his ex-wife Mrs Baljinder Kaur Boparan (Mrs Boparan), who is stated to own more than 25% but not more than 50% of the shares. Mr Boparan is, therefore, the majority and controlling shareholder in Holdco. The shares in Private Office are also held by Mr and Mrs Boparan, each of whom are said to own more than 25% but not more than 50% of the shares (meaning, therefore, as there are no other shareholders, that they each own 50% of the shares, with neither of them having majority control).

28) The Panel heard brief evidence from Martin Brostroff, Private Office’s Head of Legal. He confirmed that Mr and Mrs Boparan each held 50% of Private Office’s shares, with neither having overall control. Since June 2023 Private Office had had a list of reserved matters which required the express consent of both shareholders. These were in the main major corporate decisions. He told the Panel that in practice, Mrs Boparan made her own decisions and took advice from her son and did not rely on Mr Boparan for decisions. He said, and the Panel accepts, that apart from the list of reserved matters, there was no formal shareholders’ agreement between them nor as far as he knew any informal arrangements (and he said that if there had been such, its existence would have become clear over the six years he had been in post).

Question 6

6. The parties’ comments before the hearing

Accepted Answer

29) It will be recalled that the Employer’s case is that following the group restructure of its poultry business in October 2024, it is no longer a Community scale group of undertakings as described in regulation 2(1) of TICER, and as such it is no longer under any obligation to take steps to establish an EWC. Accordingly, the Employer says, no order under regulation 20(4) can and should be made.

Question 7

7. The Complainant’s comments dated 15 November 2024

Accepted Answer

30) In an email dated 15 November 2024 the Complainant submitted that:

30.1 Regulation 3 of TICER contains quite detailed provisions concerning “controlling” and “controlled” undertakings which were designed to prevent situations where an undertaking could evade its obligations under TICER through corporate legal structures, for example by assigning employees in such a way that the employee thresholds in regulation 2(1) appeared not to be met;

30.2 where there was a “group of undertakings”, TICER required an examination of chains of control in order to identify the ultimate “controlling undertaking”. Regulation 3 did not define a “controlling undertaking” simply on the basis of the ownership of shares. Rather it used the concept of “a dominant influence” over another undertaking. These provisions sought to identity who actually controlled an undertaking, for example, by looking not simply at who directly could appoint members of an administrative, management or supervisory body, or controlled a majority of voting rights or holds shares, but who indirectly did so through others, including someone who acts “on behalf of the controlling undertaking”;

30.3 the Companies House record for Holdco lists two “active persons with significant control” - Mr Boparan, who owns more than 50% but less than 75% of the shares and Mrs Boparan, Mr Boparan’s wife^{[footnote 4]}, who owns more than 25% but not more than 50% of the shares. On the face of it therefore, Mr Boparan was the “controlling undertaking” of Holdco;

30.4 the record for Private Office also lists two “active persons with significant control” – again, Mr and Mrs Boparan, each of whom were said to own more than 25% but not more than 50% of the shares and the voting rights;

30.5 given the close family relationship between Mr and Mrs Boparan, Mr Boparan was the “controlling undertaking” of Private Office, based on the definition in regulation 3. In the Complainant’s view therefore, there was a single “group of undertakings” of which Mr Boparan was the “controlling undertaking” and which included Holdco and Private Office. This group of undertakings met the definition of a “Community-scale group of undertakings’’ in regulation 2(1);

30.6 the CAC’s January 2023 decision therefore continued to apply, notwithstanding the sale of BV from one member of the group of undertakings to another, and the Complainant therefore requested that the CAC proceed to make an order under regulation 20(4) requiring the central management to take such steps as were necessary to establish an EWC in accordance with the provisions of the Schedule.

Question 8

8. The Employer’s comments dated 2 December 2024

Accepted Answer

31) In its response dated 2 December 2024 the Employer contended that:

31.1 Holdco was not part of the same group of undertakings as Private Office for the purposes of TICER. The provisions were not designed to prevent situations where an undertaking could “evade its obligations under TICER”. An undertaking or group of undertakings either fell within the scope of TICER, with resultant obligations, or it did not, in which case there were no obligations for it to evade;

31.2 a natural person (such as Mr and/or Mrs Boparan) could not amount to an undertaking for the purposes of TICER;

31.3 if it was wrong on whether a natural person could constitute an undertaking for the purposes of TICER, Mr Boparan was the group’s ‘controlling undertaking’. The Complainant’s position was that given the “close family relationship between Mr and Mrs Boparan”, Mr Boparan was the ‘controlling undertaking’ of Private Office. However, regulation 3(2)(a) specified the three circumstances in which a presumption would exist that Mr Boparan could exercise a dominant influence over Mrs Boparan and the Complainant did not suggest that any of these three circumstances characterised the relationship between Mr Boparan and Mrs Boparan. When none of the circumstances in regulation 3(2)(a) existed to give rise to a statutory presumption of control, it was for the Complainant to provide evidence that Mr Boparan could exercise a dominant influence over Mrs Boparan but no such evidence had been provided;

31.4 whilst evidentially it was not for the Employer to prove that Mr Boparan could not exercise dominant influence over Mrs Boparan, there was no shareholders’ agreement between Mr and Mrs Boparan in respect of their respective interests in Private Office, and there was no other agreement or arrangement between Mr and Mrs Boparan under which Mr Boparan could procure that Mrs Boparan acted on his behalf;

31.5 the central management that had failed to establish an EWC was that of the group of which Holdco was a member (namely Holdco itself and if, contrary to the Employer’s view, a natural person could constitute an undertaking for the purposes of TICER, Mr Boparan). However, because of the sale of BV, the group was no longer a ‘Community-scale group of undertakings’ and so the CAC should take no further steps in this matter.

Question 9

9. The Complainant’s comments dated 9 December 2024

Accepted Answer

32) In an email dated 9 December 2024 the Complainant stated that:

32.1 the intention behind regulation 3 was not germane to its argument but whatever the intention, the regulation could have the effect of preventing a controlling undertaking from evading its obligations in the way described;

32.2 European Court of Justice decisions in the context of EU competition law could be relevant in deciding whether an “undertaking” for the purposes of TICER could include a natural person. This question had not previously been considered by the CAC or the courts in relation to TICER, but would need to be considered by the CAC in this case in order to identify the relevant “controlling undertaking”. The fact that the European Court had ruled that an undertaking can be a natural person was a relevant consideration;

32.3 a natural person was able to do each of the three things listed in regulations 3(2)(a), (b) and (c). Regulation 3(3) provided that the right to vote (point (b)) or appoint (point (a)) included the right of “any person .. acting in his … own name” as distinct from the rights of a “body acting in … its own name” and distinct from the rights of other “controlled undertakings”. The onus was on the Employer to show why an “undertaking” could not include a natural person;

32.4 Mr Boparan met the requirement in regulation 3(2)(c) because he held a majority of the subscribed capital of Holdco, and the Employer accepted that Mr Boparan was the “controlling undertaking” of Holdco if an undertaking could be a natural person. The issue then was whether Mr Boparan was the “controlling undertaking” of Private Office. The Complainant was not saying that Mr Boparan could exercise a dominant influence over Mrs Boparan but that he may be able to exercise a dominant influence over Private Office;

32.5 regulation 3 did not limit the concept of exercising a “dominant influence over another undertaking” to the three criteria in regulation 3(2). Regulation 3(1) gives three examples of ways in which a dominant influence could be exercised. Regulation 3(2) then gives three criteria on the basis of which a dominant influence must be presumed. Thus, a person who did not meet the criteria in regulation 3(2) may still be able to exercise a dominant influence over an undertaking. According to the Confirmation Statement dated 6 July 2023 Mr Boparan held exactly 50% of the shares in Private Office, which was as close to a presumption of a “dominant influence” as it was possible to get;

32.6 under the Companies Act 2006, companies must maintain a register of people with “significant control” over the company. Private Office had identified Mr Boparan as a person with “significant control” over the company by virtue of his 50% shareholding. Ownership of 50% of the voting rights is evidence that Mr Boparan has a dominant influence over Private Office within regulation 3(1).

Question 10

10. The Complainant’s submissions at the hearing

Accepted Answer

33) Mr Sack continued to contend that the CAC should make an order under regulation 20(4) of TICER. The terms of the order which he invited the CAC to make appear at paragraph 10 above and replicate paragraph 30 of the CAC’s January 2023 decision.

34) Mr Sack disputed that the Employer was no longer a Community-scale group of undertakings. He contended that an examination of the chain of control revealed that Mr and Mrs Boparan ultimately controlled, through their ownership of Holdco and Private Office, and were personally the controlling undertaking, with the result that the Employer remained part of a Community-scale group of undertakings within regulation 2(1) and the CAC should make an order requiring it to establish an EWC.

35) Mr Sack accepted, however, that if Mr and Mrs Boparan could not be a controlling undertaking for the purposes of TICER, the Employer (carrying on business in the UK) and BV (carrying on business in the Netherlands and Poland) were separate groups of undertakings and no longer constituted a Community-wide group of undertakings.

36) Mr Sack contended that an undertaking can include a natural person, as the Court of Justice of the European Union had ruled in the context of competition law. He noted that the Information Commissioner’s Office (the ICO), in its guidance on the concept of an ‘undertaking’ for the purpose of the General Data Protection Regulation and the Data Protection Act 2018 stated:

“….the concept of an ‘undertaking’ is well established in UK competition law through UK and retained EU case law”;

“An undertaking refers to any entity that is engaged in economic activity, regardless of its legal status, or the way in which it is financed…..”;

“In this context, an undertaking does not correspond to the commonly understood notion of a legal entity or a company under, for example, English commercial or tax law. Instead, an undertaking may comprise one or more legal or natural persons forming a ‘single economic unit’, rather than a single entity characterised as having legal personality”.

37) In support of this guidance, the ICO cited the Competition Appeal Tribunal’s judgments in Sainsbury’s Supermarkets v. Mastercard Inc [2016] CAT 11 and Sepia Logistics Ltd and Office of Fair Trading [2007] CAT 13.

38) Mr Sack submitted that the concept of an “undertaking” for the purpose of TICER should be consistent with its use in competition law and data protection law and therefore should include not just legal entities but also natural persons. He referred the Panel to the decision of the Competition Appeal Tribunal in Sepia Logistics where it was held that two limited companies under the control of a majority shareholder could be regarded as a single undertaking for the purposes of competition law. He submitted that the concept of an undertaking in European law relates to an economic entity rather than legal status.

39) Mr Sack observed that the Employer, in its email to the CAC dated 2 December 2024, stated:

“We agree with Mr Sack that, if we are wrong on whether a natural person may constitute an undertaking for the purposes of TICER, then Mr Boparan would be the group’s ‘controlling undertaking’ [that is, the group of which [the Employer] is a part].”

40) Mr Sack noted that the Employer argued that Private Office, which had acquired BV, was not part of the same group of undertakings as the Employer /Holdco stating that “… Private Office is the ‘controlling undertaking’ of the separate group of which Holdings is not a member.” However, in their most recently-filed annual reports and financial statements both the Employer and Private Office identified their respective “controlling party” in identical terms as Mr and Mrs Boparan. The two groups of companies had the same controlling entity. This meant that if a natural person could be an undertaking, there was a single group of undertakings of which Mr and Mrs Boparan were the controlling undertaking, and the onus was on the Employer to prove that this was not the case^{[footnote 5]}.

41) Mr Sack contended that if the groups of which the Employer/Holdco and Private Office were in fact one “group of undertakings” as that term was defined in regulation 2(1), this was a ‘‘Community-scale group of undertakings’’. The transfer of an undertaking between different undertakings within this group did not mean that the group thereby ceased to be a Community-scale group of undertakings. Mr Sack submitted that if an individual owned companies in different European countries, it would be a simple matter to organise the activities through different legal entities which did not control each other even though the ultimate owners were the same, and thereby get round the requirements of TICER, and the wording of regulation 3 prevented this.

42) Mr Sack concluded that if one or more natural persons may be a “controlling undertaking” for the purposes of TICER, the obligation to establish an EWC fell, and had always fallen, upon the central management of that controlling undertaking. TICER left it to the controlling undertaking to decide who exactly that central management should be.

Question 11

11. The Employer’s submissions at the hearing

Accepted Answer

43) Mr Burns KC disputed that Mr and Mrs Boparan could be or were a controlling undertaking for the purposes of TICER.

44) Mr Burns KC submitted that the essential questions were whether Mr and Mrs Boparan were an ‘undertaking’ and, if so, whether they were the ‘controlling undertaking’ of Private Office. It was not in dispute that Mr Boparan was the majority shareholder of Holdco and that Holdco controlled the Employer for the purposes of TICER; but since 13 October 2024, Private Office had owned BV and Storteboom; Mr and Mrs Boparan each owned 50% of the shares in Private Office; and Mr and Mrs Boparan were both directors of Private Office, alongside at least one other director.

45) Mr Burns KC said that the Employer’s case in a nutshell was that Mr and Mrs Boparan were individual shareholders and were not an undertaking, even though they were the ultimate controlling parties of both companies. He contended that Mr Boparan did not control Mrs Boparan. She was very much her own person and an equal owner of Private Office. In law and in fact, Mr Boparan did not control Private Office as suggested. From October 2024, the Employer was no longer part of the same group of undertakings as BV and so was therefore no longer part of a ‘Community-scale group of undertakings’ under TICER. The CAC should not exercise its discretion to make an order against an employer to which TICER did not apply.

46) Mr Burns KC accepted that two individuals could establish a partnership to carry on a business or undertaking together with a view to profit. But that was not the case here. Mr and Mrs Boparan were joint shareholders. Shareholders were the owners but did not constitute the business – that is the concept of limited liability.

47) Mr Burns KC agreed that the term “undertaking” was not defined in TICER or the underlying Directive. However, in the EWC Directive 2009/38/E, an undertaking must be capable of having a ‘management’ (recital 19) or ‘central management’ (recitals 18, 24) and it must have a decision-making process within it (recital 22), and recital 10 explained its purpose by reference to undertakings:

“The functioning of the internal market involves a process of concentrations of undertakings, cross-border mergers, take-overs, joint ventures and, consequently, a transnationalisation of undertakings and groups of undertakings. If economic activities are to develop in a harmonious fashion, undertakings and groups of undertakings operating in two or more Member States must inform and consult the representatives of those of their employees who are affected by their decisions”.

48) This, Mr Burns KC said, equates undertakings with their economic activities, which echoes the familiar concept of an ‘undertaking’ in the Transfer of Undertakings (Protection of Employment) Regulations 2006 and the Acquired Rights Directive. That was an economic entity which retained its identity, namely an organised grouping of resources which had the objective of pursuing an economic activity. This approach was consistent with an undertaking for EU competition law purposes – an ‘economic unit’ rather than a legal personality. Undertakings are

“economic entities which consist of a unitary organisation of personal, tangible and intangible elements, which pursue a specific economic aim on a long-term basis…”.

49) Mr Burns KC referred to the discussion of the term “undertaking” in the context of competition law in the decision of the Competition Appeal Tribunal in Sainsbury’s Supermarkets Limited v Mastercard Incorporated [2006] CAT 11 at paragraphs 352 and following:

“351. In the following paragraphs, we examine the meaning given to the concept of an “undertaking”. It will be necessary to consider whether Sainsbury’s and Sainsbury’s Bank are part of the same undertaking, and whether the existence of a single undertaking is the relevant touchstone for the attribution of the turpitude.

352. Article 101(1) TFEU refers to “undertakings”, a concept that is unknown in English law. The concept of an undertaking is primarily an economic rather than a legal one. Whilst undefined in the TFEU, it has been given extensive consideration by the EU Courts and by the EU Commission. We must therefore have regard to the relevant decisions of the EU Courts and the relevant decisions and statements of the EU Commission.

353. In Höfner and Elser v Macrotron GmbH Case C-41/90, [1991] ECR I-1979, at paragraph 21, the Court of Justice stated that “the concept of an undertaking encompasses every entity engaged in an economic activity regardless of the legal status of the entity and the way in which it is financed”.

354. Bellamy & Child notes

“The General Court has stated that Article 101 is addressed to economic entities made up of a collection of physical and human resources capable of taking part in the commission of an infringement of the kind referred to in that Article.”

355. In a passage cited by the Court of Justice with apparent approval in Akzo Nobel NV and Others v Commission, C-97/08 P, [2009] ECR I-8237 the General Court described the concept in similar terms, as follows (see paragraph 27 of the Court of Justice’s judgment):

“57. It must be borne in mind, first of all, that the concept of undertaking within the meaning of Article 81 EC includes economic entities which consist of a unitary organisation of personal, tangible and intangible elements, which pursue a specific economic aim on a long-term basis and can contribute to the commission of an infringement of the kind referred to in that provision (see Case T-9/99 HFB and Others v Commission [2002] ECR II-1487, paragraph 54 and the case-law cited).”

356. An undertaking therefore designates an economic unit, rather than an entity characterised by having legal personality. In Hydrotherm Gerätebau GmbH v Compact del Dott Ing Mario Andreoli & C Case C-170/83, [1984] ECR 2999 at paragraph 11, the Court of Justice stated that “[i]n competition law, the term ‘undertaking’ must be understood as designating an economic unit for the purpose of the subject-matter of the agreement in question, even if in law that economic unit consists of several persons, natural or legal”.

357. Because the focus of EU law is on the economic, rather than the legal, nature of an entity, a number of individual legal bodies can be treated as a single undertaking for the purposes of competition law.

358. Thus, a single undertaking may comprise a parent company and its subsidiary, provided that the relationship between them is such that they form a single economic entity. Equally, an employee (obviously a natural person in his or her own right) will typically be part of the undertaking that employs him or her. Similarly, an independent contractor and the person engaging that contractor can be a single undertaking. In Marlines v Commission Case T-56/99, [2003] ECR II-5225, a cartel case, the Court of First Instance (now the General Court) had to consider whether a manager of certain vessels was a part of the same economic unit as the owners of those vessels. The Court concluded that he was, and stated at paragraph 60:

“It is clear from case-law that, where an agent works for his principal, he can in principle be regarded as an auxiliary organ forming an integral part of the latter’s undertaking bound to carry out the principal’s instructions and thus, like a commercial employee, forms an economic unit with this undertaking (Suiker Unie and Others v Commission, cited above, paragraph 539).”

359. The basic definition of an undertaking – set out in paragraphs 352 to 355 above – is uncontroversial. The concept is neutral as regards legal personality, and does not seek to define itself by reference to the legal persons that might comprise it.”

50) Mr Burns KC submitted that Mr and Mrs Boparan are not a business or an economic entity nor an organised grouping of resources or a company. They did not have a management or central management nor did they have a decision-making process within them. An undertaking in this context must mean a company, an organisation or a business and not just persons who were a business owner.

51) Mr Burns KC contended that TICER did not define a ‘group of undertakings’ as undertakings controlled by the same legal person. It could have done so if that was the intention. Instead, the controller itself must be an undertaking rather than merely a legal person. This is because regulation 2 provided that “‘group of undertakings’ means a controlling undertaking and its controlled undertakings”. As Mr and Mrs Boparan are not an ‘undertaking’, they could not be a controlling undertaking.

52) Mr Burns KC observed that whilst Mr and Mrs Boparan were each ‘person with significant control’, that concept included minority shareholders who did not have ‘control’ under regulation 3. A ‘person with significant control’ was someone within Schedule 1A of the Companies Act 2006. Paragraphs 2 and 3 included someone who held, directly or indirectly, more than 25% of the shares and/or voting rights in a company. It did not require a majority holding, which explained why Companies House records show Mr and Mrs Boparan as each having significant control of Private Office based on each having a minority holding. Therefore ‘significant control’ was not an indicator of dominant influence within regulation 3.

53) Mr Burns KC submitted that Mr Boparan did not have ‘dominant’ influence over Private Office as he was merely an equal shareholder. He was not the dominant owner or influence. Since June 2023, Private Office had had a list of reserved matters which required the express consent of both shareholders. Significant corporate activity by Private Office required the consent of both Mr and Mrs Boparan. Neither of them was able to control the business of Private Office alone. The ex-spouses worked and decided independently, and took separate advice.

54) Mr Brostroff’s evidence was that there was no oral or other written agreement between Mr and Mrs Boparan about how the affairs of Private Office should be run, beyond the list of reserved matters which provided for important corporate decisions that required their agreement.

55) Mr Burns KC observed that the Complainant also speculated whether Mr Boparan (either by himself or through any other person or body acting on his behalf) could appoint more than half of the members of the administrative, management or supervisory body of Private Office, or controlled a majority of the votes attached to the issued share capital of Private Office. Mr Brostoff’s evidence confirmed that this speculation was groundless. Under clause 18 of the Articles of Association, directors were appointed by ordinary resolution or by a decision of the directors in which other directors must exercise independent judgment.

56) Mr Burns KC observed that the Complainant no longer argued that by virtue of his 50% shareholding in Private Office or his connection with Mrs Boparan, Mr Boparan had a dominant influence over Private Office. The evidence was that Mr and Mrs Boparan made independent decisions in respect of Private Office, there was no business arrangement between them and there was no one shareholder with control.

Question 12

12. Considerations

Accepted Answer

57) When the CAC reached its January 2023 decision, the Employer had been part of a Community-scale group of undertakings, consisting of undertakings in the UK, the Netherlands and Poland, carried on by, respectively, the Employer, BV and Storteboom. As such, it had failed to take steps to establish an EWC in accordance with TICER, and the then Panel issued a decision accordingly. The question now is whether the Panel should make an order under regulation 20(4) of TICER.

58) Following the sale by the Employer (or its parent company, Holdings) of its European poultry businesses to Private Office in October 2024, the Employer operated only in the UK, remaining a subsidiary of Holdings and ultimately, Holdco. The European companies, BV and Storteboom, became subsidiaries of Private Office and no longer operated in the UK. In a corporate sense, the Employer’s controlling entity remained Holdco; BV’s and Storteboom’s became Private Office. The Employer contends that as a result of this transaction, it was no longer a Community-scale group of undertakings as described in regulation 2(1) of TICER, and as such no longer under any obligation to take steps to establish an EWC.

59) This was because, according to the Employer, under regulation 3 of TICER, which defines the terms ‘controlling undertaking’ and ‘controlled undertaking’, and notwithstanding the similarity of their names, the Employer’s immediate parent company, Holdings, and Private Office were not members of the same group of undertakings. The ‘controlling undertaking’ of the group of which Holdings was a member was Holdco, whereas Private Office was the ‘controlling undertaking’ of the separate group including BV.

60) Under regulation 5(1) of TICER, responsibility for creating the conditions and means necessary for the setting up of an EWC in a Community-scale group of undertakings rests with the central management of the group’s controlling undertaking.

61) By regulation 2(1), “central management” means, in the case of a Community-scale group of undertakings, the central management of the controlling undertaking. and a ‘group of undertakings’ means “a controlling undertaking and its controlled undertakings”.

62) Under regulation 3, “controlling undertaking” means an undertaking which can exercise a dominant influence over another undertaking by virtue, for example, of ownership, financial participation or the rules which govern it and “controlled undertaking” means an undertaking over which such a dominant influence can be exercised. The ability of an undertaking to exercise a dominant influence over another undertaking shall be presumed, unless the contrary is proved, when in relation to another undertaking it directly or indirectly—(a) can appoint more than half of the members of that undertaking’s administrative, management or supervisory body; (b) controls a majority of the votes attached to that undertaking’s issued share capital; or (c) holds a majority of that undertaking’s subscribed capital.

63) On the face of it, therefore, the Employer’s controlling undertaking is Holdco and BV/Storteboom’s is Private Office. This means, as the Employer contends and Mr Sack accepts (see paragraph 35 above), that they are not part of the same group of undertakings. They do not control each other.

64) But the Complainant says that the controlling undertaking in respect of Holdco and Private Office is Mr and Mrs Boparan, as they hold 100% of the share capital of both companies. Thus, the Complainant says, the UK and European undertakings remain a Community-scale group of undertakings, with Mr and Mrs Boparan as the controlling undertaking.

65) The issue, therefore, for the Panel is whether Mr and Mrs Boparan can be, and are, an undertaking for the purposes of TICER.

66) As Mr Burns KC has reminded the Panel, TICER does not contain any definition of the term “undertaking”. The term has, however, been the subject of decisions of European and domestic courts in the spheres of competition, data protection and transfer of undertakings law, and as set out in Sainsbury’s, denotes an economic unit separate from the legal entities which may constitute it, an economic entity which consists of a unitary organisation of personal, tangible and intangible elements, which pursue a specific economic aim on a long-term basis.

67) The Panel accepts that individual natural persons can be an undertaking. They could, for example, set themselves up as sole traders or a partnership pursuing an economic activity together. But in this case, Mr and Mrs Boparan are not a business or an economic entity nor an organised grouping of resources or a company. As Mr Burns KC says, they did not have a management or central management nor did they have a decision-making process within them.

68) The true characterisation of Mr and Mrs Boparan is that they are shareholders in a company. The separation of shareholders from the companies which they own is a fundamental of company law. The Panel agrees with Mr Burns KC that if the legislature had intended to equate control of undertakings with legal ownership, it could have done so, but it has not. Rather, the key concept in TICER is the “undertaking”, and the caselaw shows that an undertaking is the economic unit, separate from the legal structures which constitute it. As shareholders, Mr and Mrs Boparan were not an economic unit. On the facts of this case, therefore, the Panel finds that Mr and Mrs Boparan were not a controlling undertaking for the purposes of TICER.

69) In Sepia Logistics it was held that two limited companies under the control of a majority shareholder could be regarded as a single undertaking for the purposes of competition law. But the difficulty facing this contention is that the conclusion rested not on the legal ownership of the shares but rather on the concept that there was on the facts a single economic unit consisting of the two limited companies. In this case it is not contended and there is no evidence that the two companies, Holdco and Private Office, whilst having common shareholders, were operated as a single economic undertaking.

70) The Panel’s conclusion that Mr and Mrs Boparan were not an undertaking for the purposes of TICER is sufficient to decide the application before it. It is unnecessary for the Panel to address the implications of the Boparans’ 50% shareholdings in Private Office. Because, as at the date of the hearing, the Employer is no longer a Community-scale group of undertakings, there is no obligation upon it to establish an EWC under TICER. That being the case, it is not appropriate for the Panel to make any order under regulation 20(4).

Question 13

13. Decision

Accepted Answer

71) The Panel finds, for these reasons, that from October 2024 the Employer was no longer a Community-scale group of undertakings as described in regulation 2(1) of TICER, and as such no longer under any obligation to take steps to establish an EWC. In these circumstances, the Panel does not make an order under regulation 20(4).

Panel

Mr Stuart Robertson, Panel Chair

Mr Rob Lummis

Mr Paul Morley

17 April 2025.

Question 14

14. Appendix

Accepted Answer

Names of those who attended the hearing on 24 March 2025.

For the Complainant

Iulian Firea - Unite regional convenor, West Midlands, 2Sisters

Philip Sack - Director, EWC Legal Advisers

For the Employer

David Hopper - Partner, Lewis Silkin LLP

William Brown - Associate, Lewis Silkin LLP

Andrew Burns KC - Counsel

Denise Mullen - General Counsel & Company Secretary, 2 Sisters Food Group

Rupert Parker - Senior Legal Counsel, 2 Sisters Food Group

Martin Brostroff - Head of Legal, Boparan Private Office Limited

See easyJet plc v easyJet EWC [2023] ICR 1394. ↩
TICER also defines what is meant by “Community-scale”, in terms of number of workers and their locations, but these provisions are not in issue in this case, and the Panel needs not refer to them. ↩
It appears from the documents that BV and Storteboom were subsidiaries of Holdings, as was the Employer, rather than being subsidiaries of the Employer itself, but no point is taken about this for the purposes of regulation 2(1). ↩
Mr and Mrs Boparan have since divorced, but nothing turns on this. ↩
During the hearing, Mr Burns KC noted that Mr Sack appeared to have changed his position from arguing that the controlling undertaking was Mr Boparan alone to the undertaking was Mr and Mrs Boparan together. Mr Sack advised that the latter was his position. ↩

Decision

Applies to England, Scotland and Wales

1. Introduction

2. Background

3. The hearing

4. The relevant provisions of TICER

5. The relevant facts

6. The parties’ comments before the hearing

7. The Complainant’s comments dated 15 November 2024

8. The Employer’s comments dated 2 December 2024

9. The Complainant’s comments dated 9 December 2024

10. The Complainant’s submissions at the hearing

11. The Employer’s submissions at the hearing

12. Considerations

13. Decision

14. Appendix

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Applies to England, Scotland and Wales

1. Introduction

2. Background

3. The hearing

4. The relevant provisions of TICER

5. The relevant facts

6. The parties’ comments before the hearing

7. The Complainant’s comments dated 15 November 2024

8. The Employer’s comments dated 2 December 2024

9. The Complainant’s comments dated 9 December 2024

10. The Complainant’s submissions at the hearing

11. The Employer’s submissions at the hearing

12. Considerations

13. Decision

14. Appendix

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Help us improve GOV.UK

Help us improve GOV.UK