Thu 19 Dec 2019

Do workers transfer under TUPE?

Is an Employment Tribunal judgement that TUPE covers workers as well as employees correct?

We don't usually report on employment tribunal judgements as they don't set a precedent for any other future claims. However, an appeal to the EAT in this case seems likely so we may well hear more on this issue in 2020. 

The Transfer of Undertakings (Protection of Employment) Regulations ("TUPE") implements the EU Acquired Rights Directive ("ARD").  TUPE defines an employee as being any individual working under a contract of service or apprenticeship "or otherwise" but not someone who is genuinely self-employed.  The ARD defines employee as any person who is protected as an employee under national law, and provides protection for those in an "employment relationship".

In Dewhurst & Others v Revisecatch Ltd t/a Ecourier and City Sprint (UK) Ltd three cycle couriers made claims including a failure to inform and consult under TUPE and for holiday pay under the Working Time Regulations 1998 ("WTR").  They had worked for City Sprint until the company lost a contract to provide courier services to Revisecatch.  The couriers immediately started working for Revisecatch.  For there to be jurisdiction to hear the failure to inform and consult claim the couriers would have to be "employees" under TUPE. 

In reaching her conclusion the employment judge identified that domestic law uses "employee" in at least two different ways.  First of all, the term encompasses those who are employees in the traditional sense of having a contract of service.  However, the law has also long recognised "employees" of a different sort, although those individuals are sometimes identified as workers - for example under the WTR - and sometimes as employees (being "in employment") under the Equality Act 2010. 

The employment judge found that the "employment relationship" in the ARD embraced this second class of working person.  An example was given that if the employment relationship was to be so narrowly defined that a Member State could exclude these workers then the ARD would not operate to transfer liability against an insolvent transferor for a pre-transfer act of discrimination to a solvent transferee.  It was difficult to see how it can be in accordance with the ARD for a whole group of workers who are entitled to protection from discrimination to not also be entitled to have liabilities for infringement of their EU derived employment rights transferred. 

In order to properly give effect to the ARD the employment judge concluded that the words "or otherwise" in TUPE must be construed to include workers within the meaning of section 230(3)(b) of the Employment Rights Act 1996 and Regulation 2(1) of the Working Time Regulations 1998. 

The consequences of this case are potentially far reaching.  If correct, not only will workers transfer along with liabilities arising from their contracts but protective awards for failing to inform and consult would apply to them (as is being claimed here). The judgement also raises the question of whether TUPE has adequately implemented the ARD in terms of the protection from dismissal which does not apply to workers.  

Perhaps surprisingly this judgement was not appealed.  As a first instance decision it is not a binding authority.  However it seems likely a similar argument will be run again in future and may progress higher through the court and tribunal system.  Potentially big changes are on the horizon.  

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