Public sector employers that moved staff to private companies in the 1990s will be retrospectively covered by Transfer of Undertakings (Protection of Employment) Regulations (TUPE), following a landmark ruling in the House of Lords.
The ruling, in the case of Astley, Hawkes and Owens v Celtec, determined that the TUPE regulations and its parent legislation, the Acquired Rights Directive, did apply to all aspects in establishing the Training and Enterprise Councils (TECs) in the early 1990s.
As a result, it will affect thousands of civil servants whose rights may have been adversely affected by the TUPE transfers.
In the early 1990s, the Department for Education and Skills (DfES) created TECs to take over the responsibility for training young people. A large number of civil servants, including the three claimants, were seconded from the department to the TECs with continuity of their civil service employment preserved.
Three years later, the civil servants were offered the opportunity to return to the DfES, or transfer to the employment of the TECs.
In 1993, the claimants resigned from the DfES and signed new contracts with Celtec, the North Wales TEC. The issue that originally gave rise to the claim was the redundancy dismissal of Hawkes in 1998 by Celtec. The DfES considered that there was no continuity of employment dating back to her time in the Civil Service.
But, following an eight-year legal battle, the House of Lords has now ruled that the claimants had all TUPE-transferred to Celtec in September 1990 and were entitled to rely on their continuity of employment.
Edward Cooper, head of employment at law firm Russell Jones & Walker, said: "The decision could have major implications for all public sector employers that privatised services with movement of staff.
"It will not be limited to redundancy or termination payments and will affect all contractual entitlements and benefits related to length of service as well as employment protection."