The recent employment tribunal judgment that TUPE applies to ‘workers’ as well as ‘employees’ sent a shockwave through HR circles. For the time being, however, we urge caution. In this article we explain the background to the judgment and why employers should hold tight before changing their procedures in respect of TUPE.
Mr Dewhurst and two colleagues were cycle couriers. They were engaged as workers by City Sprint who subsequently lost a contract to provide courier services to a client, HCA Healthcare. Revisetech, who ultimately were successful in winning the tender, took on Mr Dewhurst and his colleagues to fulfil the requirements of the contract.
Mr Dewhurst ultimately brought a number of claims against Revisetech. However, in order to be successful, it would need to be shown that the liability passed from City Sprint to Revisetech under TUPE. As the individuals were workers, the general understanding was that TUPE did not apply to them and therefore their claims must fail. The Employment Tribunal had other ideas.
When considering the claims, the Tribunal had to consider the domestic UK legislation. Under TUPE Regulations 2006, the Tribunal noted that the definition of “employee” in the legislation is “any individual who works for another person whether under a contract of service or apprenticeship or otherwise”.
It was further noted by the Tribunal that the Equality Act 2010 uses the term “employee” to describe not only traditional employees as we know them, but also those who benefit from some employment rights such as workers.
In taking into consideration the above, the Tribunal concluded that TUPE was intended to protect a “broader class” of individuals, and as such, the phrase “or otherwise” contained in TUPE legislation could be interpreted to include workers as well as employees.
What does this mean for you or your business?
It is worth remembering at this point that judgments n the Employment Tribunal are not binding on other Tribunals. It is anticipated that this judgment will be appealed to the Employment Appeal Tribunal (EAT).
If the EAT agrees with the decision made by the ET, the implications would be significant: with more individuals affected by a transfer, failing to adhere to these obligations could result in substantial cost repercussions, given that failure to inform and consult in line with TUPE’s requirements can result in a penalty of up to 13 weeks’ gross pay per employee (and following this decision, possibly worker too).
In addition, along with an increased administrative burden, the decision poses practical problems for individuals assessing which staff are ‘workers’ and will transfer under TUPE, as ‘workers’ can often be given various labels such as ‘casual’ and ‘temporary’ staff.
What do you need to be doing now?
Considering the implications of the decision, employers should follow the developments of this case. We will continuously monitor development and they will be available on bulletins and our twitter feeds as soon as we hear of further developments.
For employers faced with a TUPE situation, it would be advisable to look at workers affected by a transfer, and consider necessary action to minimise risk, such as appropriate indemnities or including workers in the TUPE transfer until we have a defining judgment on the point.
The employment tribunal judgment is available here.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.