Tag Archives: employment appeal tribunal

TUPE or not TUPE

. . . or The slings and arrows of outrageous fortune

In Eddie Stobart v Moreman the Employment Appeal Tribunal (EAT) decided that, for there to be a TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) “service provision change” the group of employees had to be deliberately organised to service the particular  client. The EAT decided that, in the Stobart case, the fact all the employees happened to work on a shift that provided services to that client was not enough. The TUPE regulations define a service provision change transfer as applying when there is an:

“organised grouping of employees”, which has
“as its principal purpose the carrying out of the activities … on behalf of the client.”

The EAT decided where a combination of circumstances (largely shift patterns and working practices) meant that a group of employees were as a matter of simple fact working mostly on tasks which benefitted a particular client did not meet this test.

The EAT pointed out that TUPE does not say merely that employees should in their day-to-day work in fact principally carry out activities for the client in question – TUPE requires that the activities are the principal purpose of the organised grouping of employees to which the individual belongs.

Whether an individual employee works 50% or more for a particular client is not any part of the test under TUPE 2006. It was part of the test under the 1981 version of TUPE, but that wording did not continue into the current 2006 version of the Regulations.

There are still a number of grey areas left in TUPE – as it seems there have always been. For example – could an “organised grouping” have more than one “principal purpose”? It might be that the “time proportion” test is relevant here – applying to the whole grouping. Or perhaps “principal purpose” is to be judged by the priority of the work?

The world of work streams and dotted line reports has yet to be fully explored in the context of TUPE. Does work streaming mean no group has a principal purpose? Or should we be tempted to say that work streaming means no-one is part of an organised grouping of employees?

What difference does it make in real terms if a transfer is, or is not, covered by TUPE?

A)     If there is no TUPE transfer, then any workers who were working on the project/task/service will not go through to the new contractor as the new contractor’s employees.

  • It is the current employer’s job to find them alternative work, reassign them, or if necessary make them redundant.
  • Any liability for back pay or benefits remains with the current employer.
  • All unfair dismissal, discrimination, equal pay risks remain with current employer.
  • All contractual liabilities remain with current employer.

B)     If there is a TUPE transfer, then the same workers will (as a matter of law) become the new contractor’s employees (with their full service and contractual entitlements – save for pensions – intact).

  • It is the new employer’s job to find alternative work, reassign or if necessary make them redundant.
  • All the other liabilities under A) transfer to the new employer

Where an argument breaks out between the employers about whether TUPE applies, individual employees may feel lost in the no-man’s land of litigation between two employers who are having some kind of custody battle where no-one wants the kids.
HR on both sides can do a lot to make sure that the original tender documents (where they exist), pitches for business,  take on board the statutory TUPE obligations. HR can go beyond that, if allowed into the negotiating process early enough, and can help shape a contract for services that incorporates thinking about employees and service levels from the start.

Don’t forget the TUPE regulations are a set of minimums not a set of maximums.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.
Tel: 08452 303050 Fax: 08452 303060
You can follow Annabel on Twitter

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Philosophical beliefs

Beliefs protected by the Employment Equality (Religion Or Belief) Regulations 2003 are “any religious or philosophical belief”.  Recent litigation on the meaning of a “philosophical belief” (Grainger plc v Nicholson EAT 2009) confirmed that a passionate belief in ‘man-made global warming’ could be a “philosophical belief” within the Regulations.  The Employment Appeal Tribunal (EAT) decided that the case law on the European Convention on Human Rights was relevant in this context, and that to qualify for protection as a “philosophical belief”, the belief must attain a certain level of cogency, seriousness, cohesion and importance, must be worthy of respect in a democratic society, and must not be incompatible with human dignity.  It is interesting to note that a religious belief does not have to pass these basic tests in order to be protected.  However the Grainger case explains that there is not requirement that a protected “belief” is one shared by others – a one-off belief is capable of being protected (although it was acknowledged that a widely shared belief is more likely to attract legal protection).  And a “philosophical belief” does not have to be a fully-fledged system of thought; but it must be genuinely held, and about a weighty and substantial aspect of human life and behaviour.

The purpose of the law could be seen as seeking to minimise the effect of philosophical or religious beliefs on the workplace – they are not to be the basis of detriments to workers, either from the employer or from co-workers.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.   Tel: 08452 303050  Fax: 08452 303060  Website : www.irenicon.co.uk.  You can follow Annabel on twitter – http://twitter.com/AnnabelKaye and check our regular articles and news throughout the autumn on our blog site – https://irenicon.wordpress.com/

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TUPE may not apply to multiple contractors

Employment Appeal Tribunal has decided that where there are multiple contractors replacing a single one, TUPE may not apply.   http://tinyurl.com/ceatln (Clearsprings Management Ltd v Anskers and Ors).

There are contractors who took on contracts on a TUPE basis accepting full liability for staff, who run the risk of being unable to pass that liability on at the end of that contract.

At the moment this seems to be a particular feature of contracting with the Government as a client! We are aware of many organisations who were required to take in staff with full service in order to get the contract in the first place, who will now retain the liability when the contract changes hands.

This will undoubtedly spread to the private sector and will cause further pressure on businesses trying to survive by contracting with the government.

We have been aware of this trend in case-law for some time and have come up with some strategies to limit the effect of this in certain circumstances.   Contact info@irenicon.co.uk, www.irenicon.co.uk tel: 08452 303050 fax: 08452 303060

If your contracts are up for review/renewal or if you are pitching for service contacts that could potentially be split among rival suppliers at another date, you should take urgent steps to make sure you have a plan to handle this.   If you want help modelling your pitch or considering the options on the staff side we can work alongside you, even at a fixed fee.

See our previous blog

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