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11 September 2016
Employment Appeal Tribunal (EAT)
Her Honour Judge Eady QC
There is no TUPE transfer, according to the EAT, when a business moves from a single employer to a group of employers which includes the original employer.
L was employed as a decorator by M Ltd, a provider of socialhousing. M Ltd joined the Hyde Group of companies. In a restructure, L became employed ‘jointly and severally’ by a number of companies within the Hyde Group, all of which provided social housing, so that he and other employees of M Ltd could provide decorating and other services to all companies in the group. L was given a new contract which he refused to sign because he objectedto its terms. He was dismissed but was offered new employment on new terms. He accepted but complained that his dismissal had been unfair.
He argued first that TUPE applied (so that the TUPE rules wouldapply to his unfair dismissal claim). The question, as the EAT saw it, was whether a move from a single employer to a group of employers which included that single employer could be a TUPE transfer. The EAT said a transfer to a number of people or organisations could still be a TUPE transfer - the transferee does not have to be a single entity. However, there can be no transfer if one of those organisations is the first employer. The employer remains the same both before and after the change, even though after the change there are other employers as well. The Directive which TUPE was intended to implement defines the ‘transferor’ as the person who because of the transfer, ‘ceases to be the employer’ - but here M Ltd never ‘ceased to be the employer’. In this case, therefore, TUPE did not apply, so the normal unfair dismissal rules applied.
The status of employment rights on the transfer of an undertaking is an extremely complex area of...