Obligations Under TUPE

The Employment Appeal Tribunal (EAT) has reaffirmed (Todd v Strain and others) that when there is a ‘relevant transfer’ under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), the obligation under Regulation 13.2 to inform affected employees and the obligation under Regulation 13.6 to consult ‘appropriate representatives’ are separate obligations and where there are no appropriate representatives for this consultation process, the transferor is obliged to arrange for their election by employees (Regulation 14).

Ms Todd was the owner of a care home in Glasgow. The business was sold to Care Concern (GB) Ltd., which gave rise to a relevant transfer under TUPE. 32 of the employees brought proceedings in the Employment Tribunal (ET) claiming that Ms Todd had failed to inform and consult them, had not complied with the duty to organise the election of employee representatives and that Care Concern was also jointly and severally liable for this failure by way of TUPE Regulation 15(9).

Some of the care home employees had been given limited information regarding the impending transfer but Ms Todd did not arrange for the election of appropriate representatives. She did not therefore give any information to or consult with any such representatives. Her contention was that she did not envisage taking any measures in connection with the transfer that would impact on any of the employees, so was not under any obligation to consult and the obligation to inform only arose if there was an obligation to consult.

On the facts of the case, the ET found that Ms Todd must have envisaged taking some measures that would affect the employees and was in breach of her duty to inform and consult with them. It ordered Ms Todd to pay each claimant the maximum award of 13 weeks’ pay in compensation and dismissed the claim against Care Concern.

Ms Todd appealed against the ET’s decision.

The EAT held that the obligation to inform and the obligation to consult are distinct obligations and upheld the ET’s finding of liability against Ms Todd. In its view, however, the seriousness of her failure could not be said to be at the extreme end of the scale so as to justify the maximum compensation award. She had given employees some basic information and, importantly, a reassurance that Care Concern would not be making changes in staffing or terms and conditions following the transfer. The EAT therefore substituted an award of seven weeks’ pay for each employee.

As regards joint liability, the EAT found the ET’s reasoning on this point ‘difficult to follow’. The wording of TUPE Regulation 15(9) is unequivocal and the EAT therefore found Care Concern jointly and severally liable for the compensation payable.

Click here for guidance on the TUPE regulations.