Exactly what it says on the tin, catches oil. In more detail it connects to the positve crank case ventilation system, and allows the possibly oil vapour laden air to vent to atmosphere, without any filter or catch tank this would be discharged to atmosphere which is both a fire hazard and an environmental hazard and is an mot failure, due to faulty emission control. The catch tank, will fill with the oil as the vapour slows and the heavy oil particles will fall, hence the air filter on the top. The tank will need to be periodically emptied, but also provides a gauge as to the health of your engine.