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Employment Law

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Veale Wasborough Vizards , 21 AUG 2015

What happens to an employee's continuity of employment on the transfer of an undertaking?

What happens to an employee's continuity of employment on the transfer of an undertaking?
Jenny Marley
Solicitor, Veale Wasbrough Vizards

The Employment Appeal Tribunal (EAT) has held that the "time of the transfer" can include a date over a month before the date the actual transfer takes place.

In Services For Education (S4E Limited) v White and Birmingham City Council, Mr White was employed by Birmingham City Council (the Council) as a sessional music teacher under a series of contracts which ran from September to July.

Mr White's last contract with the Council came to an end on 31 July 2013.

On 1 September 2013, the Council transferred the music teaching service to a new provider, Services For Education (S4E Ltd), and Mr White worked for S4E Ltd from this date.

Mr White subsequently brought claims against the Council and S4E Ltd for unfair dismissal on the basis that he had been dismissed by S4E Ltd and re-engaged on different terms.

The Employment Tribunal (ET) held that Mr White's employment with the Council was preserved over the summer and therefore he was still employed by the Council at the time of the transfer. This meant that Mr White had sufficient continuous service to bring an unfair dismissal claim against S4E Ltd. S4E Ltd appealed.

On appeal, the EAT disagreed with the ET that Mr White's employment with the Council was preserved over the summer and instead looked at the question of when the transfer took place and whether Mr White was still employed by the Council at that date.

The EAT found in Mr White's favour and held that, as the 31 July 2013 was a date during the "time of the transfer" and Mr White was still employed by the Council at that date, Mr White therefore had sufficient continuous service to bring an unfair dismissal claim against S4E Ltd.



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The transfer agreement itself was critical in reaching this decision. After reviewing the provisions in the transfer agreement, the EAT found that the transfer was a process with a number of associated transactions as opposed to one singular event. The EAT accepted that some of the arrangements could be seen as preparation for a future transfer rather than part of the transfer itself, but concluded that the ET was entitled to find that some at least of the matters it referred to (i.e. a prior agreement in relation to the pension provisions in the transfer agreement) were part of a transfer process.

The EAT therefore dismissed the appeal.

Best practice

This decision is not likely to be good news for employers who employ staff on a series of fixed term contracts as it means employees who may not have been considered as part of a transfer may now be included, if it is possible that the transfer in fact took place over a period of time.

It is important to recognise however that there were specific facts in this case which allowed the transfer to be seen as a process. It is important to consider the incidents and the nature of the actual transfer in each particular case.
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