Of course they do I hear you shout. In a recent case before the Liverpool Employment Tribunal a firm in Southport got themselves into a serious mess with the TUPE (Transfer of Undertaking (Protection of Employment) Regulations 2006. TUPE, for those who haven’t had the misfortune to be acquainted with it, are the Regulations that protect employees when a business (“an undertaking” in the Regs) gets transferred from one business to another. The Regs are very complicated and most employment lawyers, if being honest, would admit to loathing them. If an employee is dismissed because of a reason connected with a transfer of an undertaking, TUPE provides that the dismissal is automatically unfair.
What in fact occurred in this instance was that Barnetts won a contract to supply conveyancing services to the Britannia Building Society, in place of the firm then doing the work. When the TUPE regulations were updated in 2006 one of the alterations was to allow “service provision changes” to be covered by the Regs. This meant that if, for instance a local authority decided to outsource its school dinner function to a private company, the dinner ladies would TUPE across, thus preserving their employment rights. It also applies to solicitors and I am only surprised that more firms haven’t been caught by it before now.
In this case some of the employees who were transferring did not want to do so (because it meant moving to offices further away) and thus they claimed that the effect of the transfer was to repudiate their contracts of employment. They brought claims for unfair dismissal against Barnetts, the new company and of the six employees that brought claims, two succeeded. The two that succeeded were able to show that they were “assigned” to the Britannia work; their fellow claimants couldn’t. Both Barnetts and their predecessor firm agreed that TUPE didn’t apply; bad decision.
This must have been something of a blow for Barnetts after the inevitable pleasure that would have ensued in winning the work in the first place. The Tribunal hasn’t awarded compensation yet to the successful claimants but it will, no doubt, be fairly large and, on top of the amount of management time expended in defending the claims, will take the gloss off winning the Britannia work in the first place.
The above article will appear in the “Docklands” and “Peninsula” newspapers week commencing 30th March.