TUPE

TUPE

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The worker status debate leached into the TUPE sphere towards the end of 2019. A ‘worker’ is defined by section 230(3) of the Employment Rights Act 1996 (ERA) as:

An individual who…works under:

  1. A contract of employment, or
  2. Any other contract…where the individual undertakes to do or perform personally any work…for another party who…is not…a client or customer of…the individual.

TUPE is a legal mechanism which protects employees when the business they work for transfers to a new owner. TUPE defines ’employee’ as ‘any individual who works for another person whether under a contract of service or apprenticeship or otherwise‘ but does not include the genuinely self-employed. Previously there has been no case law on whether workers are covered by TUPE. Employers have considered it unlikely and usually limited TUPE obligations to employees.

Dewhurst v Revisecatch & City Sprint may have put a cat among the pigeons then. In this case, three workers said that they fell into the definition of ’employee’ under TUPE. They brought claims for holiday pay and failure to inform and consult. At a preliminary hearing to decide whether TUPE applied to them, the employment tribunal decided that workers were ’employees’ under TUPE. They were covered by the ‘or otherwise’ part of the definition. Only the genuinely self-employed were not included. The judge said that this interpretation was necessary to preserve the employment rights of those who work within businesses when they change hands.

This is an employment tribunal decision which means that other tribunals or courts don’t have to follow it. The employers are likely to appeal though, and the appeal decision will create binding law. Most employers treat workers differently to employees in a TUPE situation. If this decision is upheld on appeal, employers will need to revisit their approach to workers when considering their obligations under TUPE. With 13 weeks’ pay at stake per ’employee’ for a failure to inform and consult, any failure could be costly. Watch out for an appeal decision towards the end of the year.

Astons Solicitors
January 14th 2020

TUPE transfer: new security contractor takes over equipment but not staff

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In Securitas v ICTS Portugal the CJEU held that there can be a transfer of an undertaking when a new contractor takes over security services from a previous contractor without accepting the employees assigned to that work, if the new contractor takes over the equipment which is essential in order to deliver those services.

Securitas took over the contract for security services at a port in Azores but refused to transfer the 17 staff, employed by the previous contractor ICTS, to its employment. The Portuguese Supreme Court referred questions to the CJEU with regards to the application of the Acquired Rights Directive to the Portuguese Labour Code on transfers.

The CJEU stated that when there is a service that is solely based on manpower, there would be no transfer of employees to a new provider as an economic entity will not retain its identity. However, if an economic entity is based mainly on equipment then not taking on employees won’t stop a transfer occurring. In this case, the court would need to decide whether ICTS had transferred to Securitas any equipment or assets purely for the purpose of security activities. If this was the case then there would have been a transfer.

Written by

Rachael Jessop
21st November 2017

Employment law reform announced by Government

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The government has recently outlined plans for employment law reform, including financial penalties to be introduced on employers who breach employment rights.

The main proposals of notable interest are:-

  • To increase the qualifying period for unfair dismissal to 2 years.
  • For all claims to be submitted to ACAS for pre-conciliation before a claim can be issued in an Employment Tribunal.
  • Introducing the concept of “Protected Conversations”, which would allow employers to raise workplace issues with employees “in an open way, free from the worry it will be used in evidence in… tribunal”.
  • Financial penalties to be introduced on employers who breach employees’ employment rights. The money would be payable to the Exchequer.
  • Employment Judges are to sit alone in unfair dismissal cases.
  • Closing the loophole in whistle blowing legislation whereby a complaint about a breach of contract can count as a qualifying disclosure.
  • A review of the Tribunal rules to be conducted by Mr Justice Underhill.
  • Reviewing the Agency Workers Regulations 2010 in 18 months time.
  • Simplifying the 17 separate pieces of National Minimum Wage legislation into one set of regulations.

Below are the key links detailing all the reform proposals:-

Vince Cables Speech

BIS Press Release

Government Response to the Consultation on Resolving Working Disputes

BIS ‘call for evidence’ on effectiveness on TUPE Regs

BIS consultation on redundancy collective consulation rules