Key Point

An "establishment" requires business and business activity to be carried out involving dealings with third parties and not simply acts of internal administration.

Facts

Olympic Airlines was wound up by a Greek Court in October 2009. The trustees of the airlines pension scheme which had a substantial deficit presented a winding up petition in July 2010. This was motivated by a desire to secure protection for scheme members under the provisions of the Pensions Act 2004. Olympic could only be wound up in England if it had an establishment here. By July 2010 Olympic had closed all its offices in the UK except its head office, ceased all commercial operations and terminated almost all its employee's contracts. Those few remaining employees worked solely on winding down the affairs of the company.

Decision

The Supreme Court held that as at July 2010 Olympic did not have an establishment in the UK and dismissed the appeal.

Comment

The Supreme Court thought it was essential that a company had business dealings with third parties in order for it to fulfill the criteria for having an establishment. Here the skeleton crew left after the closures of all its offices and commercial operations simply did not amount to a business.

The Trustees of the Olympic Airlines SA Pension and Life Assurance Scheme v Olympic Airlines SA