Summary In this case, the EAT had to consider if a Share Incentive Plan (SIP) not mentioned in the contract of employment still transferred under a TUPE transfer, and if the transferee was therefore required to provide a replacement scheme of substantial equivalence Law Regulation 4 of Transfer of Undertakings (Protection of Employees) 2006 (TUPE) regulations: Effect of relevant transfer on contracts of employment (relevant extracts) 4.—(1) … a relevant transfer shall not operate so as to…

Summary The Employment Appeal Tribunal had to consider if the claimant’s employment had transferred to the respondent under a service provision change within the TUPE regulations; finding it had not, it confirmed the Employment Tribunal's judgment that the activities set out by the respondent were fundamentally different to those previously undertaken by the claimant’s employer. Law Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE") Regulation 2(1) of TUPE…

Summary The Employment Appeal Tribunal (EAT) has held that in TUPE situations, transfer-related contractual changes are void even if they benefit the employee and not just when they are detrimental. Aside from transfer of business ownership, TUPE transfers, and the laws that surround it, can also come into effect when where the provision of services ceases to be carried out by one contractor (known as the ‘transferor) and is allocated to another (known as the ‘transferee’). This is known as a…

Summary The Employment Appeal Tribunal (EAT) has highlighted that a Tupe transfer cannot be used as a way of getting rid of ‘problem’ employees. Facts The employee was a cashier at a company which was facing significant financial difficulties. The transferee (the new employer) agreed to purchase the company and would take over the existing employees under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘Tupe’). However, following a meeting with the manager of…

Summary Tribunal erred by failing to properly determine the pre-transfer ‘activity’ and whether the activity had been fragmented post-transfer For there to be a service provision change under Regulation 3(1)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), the activities being transferred to the new service provider must be fundamentally the same as those carried out by the old provider. This means the determination of ‘activities’ is crucial to whether…

Summary Activities were fundamentally the same after the transfer The Transfer of Undertakings (Protection of Employment) Regulations 2006 (Tupe) apply where there is what the regulations refer to as a “relevant transfer”. This includes a “service provision change”, when business activities are reassigned from one contractor to another. Previous case law has suggested that, for Tupe to apply, pre-transfer and post-transfer activities need not be identical, provided they are “fundamentally or…

Summary Following a restructuring, it was agreed that the claimant’s employment would transfer to another employer – but that company was subsequently put in to the hands of receivers. The claimant was dismissed and claimed unfair dismissal, arguing that under Tupe, there had been a service provision change.   The Court of Appeal (CA) has clarified, in this case, the circumstances in which the transfer regulations apply to a change of service provider.   Tupe covers transfers of…

Summary The EAT was called to rule on whether a condition in Tupe Regulation 3 was met in a case involving a change-over in contractor. To be covered by the transfer regulations, a service provision change must not be for a 'single specific' event or be short–term.   To find out if there is going to be (or has been) a service provision change (SPC) under Regulation 3 of The Transfer of Undertakings (Protection of Employment) Regulations 2006, the facts have to be subjected to a number of…

Summary A transferee contractor was unable to use Tupe information rules to claim compensation for paying transferred staff a Christmas bonus which it believed was non-contractual. This case concerned a changeover in contractor providing print finishing services to auctioneers Sotheby’s. The move was subject to the Tupe rules covering service provision changes. The outgoing contractor (Spire) had stated that staff received a non-contractual Christmas bonus of one week’s pay plus £7.50 for…

Summary The Tupe ‘service provision change’ rules can still apply in contract retendering where a commercial dispute has stopped the work, provided the employees involved were assigned to the functions in question before the transfer occurred. This case involves a complex re-tendering exercise.   For there to be a ‘service provision change’ (SPC) under the Transfer of Undertakings (Protection of Employment) Regulations 2006, the functions transferring must have been conducted by an ‘…

Summary Here the EAT decided that employees who had been laid off, and so had stopped working on a contract shortly before the potential Tupe transfer date, could transfer to the incoming contractor.   Inex was a subcontractor with a team dedicated to a contract for painting and decorating work in a particular location. When the contract was coming to an end, the client company stopped giving Inex assignments. The contractor put the group of employees assigned to the contract on temporary…

Summary The Employment Appeal Tribunal recently had to consider whether an employee absent from work on long-term sick leave, and regarded as permanently incapacitated, should transfer under Tupe with the rest of his colleagues when the service they were assigned to transferred to a new contractor.   Edwards originally worked for mobile phone provider Orange as a field operations engineer on the maintenance of its domestic network. The company outsourced the maintenance work to BT Managed…

Summary A disabled employee, who had objected to transferring to a new employer on reasonable adjustments grounds, was permitted to bring a discrimination claim against the incoming service provider, even though she had not become its employee. She was a ‘job applicant’ for Equality Act purposes, because the new employer had offered her an alternative to redundancy.   When a Tupe transfer takes place, employees assigned to the transferring business normally transfer on their existing terms…

Summary Here the EAT found that Tupe protection extends beyond contractual relationships, and that a sub-contractor’s employees carrying out activities that are transferring are protected, just as employees of the contractor would be, so it is possible for their employment to transfer to the new provider.   Transferor companies often face claims from employees of sub-contractors, who are looking to them to honour Tupe principles which the companies will not necessarily have anticipated,…

Summary When does an ETO reason apply? Facts Morison Bishop Solicitors had offices in Glasgow and Edinburgh. Mr Hynd was one of two corporate lawyers working in the Glasgow office. It was decided to dissolve the Morison Bishop partnership, with the Glasgow partners establishing a new firm, Bishops, and the Edinburgh partners establishing a new firm, Morisons.   Bishops did not intend to focus on corporate law, and hence had a reduced need for corporate lawyers. As a result, Hynd was…

Summary Here an employer's liability for sexual harassment transferred under Tupe but, because the harassment had been a continuing act, the time limit for bringing a claim did not start from the victim's transfer date to the company, but from the end of the conduct complained of. This meant the employer was liable for the acts of the harasser, even though there was no employment relationship between them. Facts Vernon was employed by Port Vale Football Club as a conference and…

Summary This decision demonstrates that a service provision change, as defined by the Transfer of Undertakings (Protection of Employment) Regulations 2006, will not take place – and employees will not transfer - if the contract is short-term or for a different organisation.   Under Tupe, a service provision change (SPC) occurs where a client outsources services to a contractor, appoints a new contractor, or takes the service back in house. Where an SPC occurs, the new provider of the…

Summary This case is a stark reminder that whether changes to working conditions in a Tupe situation are to the material detriment of the employees involved will depend on the specific facts.   Under the Tupe transfer regulations, employees that experience a ‘substantial change’ to their working conditions to their ‘material detriment’ can bring a claim for automatic unfair dismissal. This case involved four London bus drivers who were re-allocated, following a Tupe transfer, from a depot…

Summary Here the EAT had to decide whether there was a legal remedy available to the employees affected by a Tupe transfer when a transferee employer provided wrong or inadequate information to the transferor, despite reasonable efforts on the part of the transferor to acquire that information.   When the transfer of a business fits the definitions in the Transfer of Undertakings (Protection of Employment) Regulations 2006, employers are obliged to inform, and potentially consult, any…

Summary Here the EAT had to decide whether an incoming service provider could trigger Tupe where it agreed to take on ‘fundamentally or essentially the same activities’ but decided to carry out those activities in a very different way.   The Transfer of Undertakings (Protection of Employment) Regulations 2006 (Tupe) apply where there is what the regulations refer to as a “relevant transfer”. This includes a “service provision change”, when business activities are reassigned from one…

Summary Following a Tupe transfer, two employees refused to agree to a pay cut and so their employment was terminated and they were offered a new contract on reduced pay. The claimants accepted the new contracts, and returned to work but brought claims for unfair dismissal.   The Court of Appeal has confirmed in the case of Manchester College v Hazel that it is not possible to harmonise terms and conditions following a Tupe transfer if the employees concerned are not part of a…

Summary A local authority re-tendered a portfolio of services and two employees found themselves without a job because their work wasn’t contractually assured under either the new or the old arrangements. The two employees turned up to work for the new contractor on the first day after the re-tender but were sent away. Afterwards they brought claims for unfair dismissal. Facts In the case Lorne Stewart v Hyde, Carillion had been providing boiler repair and maintenance services to…

Summary The administrator of Crystal Palace Football Club decided to postpone the sale of the club and make the majority of the club's administrative staff redundant. The employees brought a claim for automatically unfair dismissal under Tupe.   A Court of Appeal decision has brought welcome news for organisations concerned that they will be acquiring liability for dismissals when taking on an insolvent business. As a result of the judgment in the case Kavanagh v Crystal Palace FC,…

Summary A dispute arose between a transferor and transferee over whether there should be a price adjustment over pensions in the sale of a business. The High Court held that discretionary early retirement benefits did transfer, but only those rights that would otherwise have been lost by the transfer – namely the enhanced rights; and that early retirement benefits could be old age benefits provided they continued to be paid after the normal retirement age from the same scheme.   This case…

Summary The employees in this case had contractual terms governed by collective agreements, negotiated at a national level. The employees transferred under the Tupe regulations to a private sector employer. A new national collective agreement increased rates of pay. The new employer refused to implement the new pay rates as it could not join in the negotiations. The employees claimed they were entitled to the pay increase.   Is a private sector employer of contracted-out public sector…

Summary Where both the transferor and transferee have failed in their duty to inform and consult under the TUPE regulations, the Tribunal can order that the liability be joint and severable.  Law The Transfer of Undertakings (Protection of Employment) 2006 (TUPE) regulations Failure to inform or consult 15.—(1) Where an employer has failed to comply with a requirement of regulation 13 or regulation 14, a complaint may be presented to an employment tribunal on that ground— (a) in the…

Summary Is an employee working 100 per cent of his time on a contract for a single client assigned to an organised grouping of employees? Facts Moffat was employed by Ceva which provided logistics and freight forwarding services for Seawell. Seawell decided to take the services back in house and terminated the agreement with Ceva.   Moffat worked 100 per cent of his time on the Seawell contract. There were other Ceva employees who also spent some of their time on the Seawell contract.…

Summary An internal appeal of an employee against dismissal for misconduct was unresolved when her employer's business was transferred to a new owner. The employee brought claims for unfair dismissal and racial discrimination and applied to have the new owner joined into that claim as a second respondent.   Where Tupe applies, the employment of the employees working for the transferor immediately before the transfer takes place, moves across automatically to the transferee employer. This…

Summary The UK, in a case concerning the correct interpretation of the Tupe regulations, asked the Court of Justice of the European Union (CJEU) whether the European acquired rights directive prevented the UK from adopting a more generous approach under its own transfer rules. The case turned on whether public sector employees, subject to sector-wide negotiated terms, remain entitled to benefit from pay increases negotiated under those terms after transferring to the private sector.…

Summary Security guards who had their employment terminated when the security contract transferred to a different service provider brought claims against their former employer and alleged transferee employer. One claim was that neither employer had informed and consulted with the employees affected.   The Transfer of Undertakings (Protection of Employment) Regulations 2006 do not apply where there is a change in contractor “in connection with a single specific event or task of short-term…