A recent European Court of Justice ruling adds to the confusion reigning over the application of Tupe to competitive tendering
The Department of Trade and Industry's long-awaited consultation document on proposals to change the Transfer of Undertakings (Protection of Employment) Regulations 1981 has still yet to be published. One of the DTI's main aims will be to achieve greater clarity and certainty over when Tupe applies to the contracting-out of services and subsequent changes of contractor.
In the meantime, the law is in a complete mess. This is largely on account of the European Court of Justice's ruling in Süzen v Zehnacker Gebaudereinigung GmbH, 1997, IRLR 255. In that case, the ECJ essentially held that the EC Business Transfers Directive ñ on which Tupe is based ñ applies only where a change in contractor involves the transfer of significant assets or "a major part of the workforce, in terms of their numbers and skills".
This seemed to suggest that in the case of a labour-intensive activity such as cleaning, an incoming contractor could avoid the operation of Tupe simply by refusing to take on any of the outgoing contractor's workforce.
There have been conflicting approaches to Süzen by the UK courts. Some cases have strictly applied the ECJ's judgment, with the result that the absence of a transfer of assets or staff ruled out a Tupe transfer In other cases, the courts have shied away from a rigid application of Süzen.
For example, in Cheeseman and others v R Brewer Contracts, IDS Brief 678 last November, the EAT overturned an employment tribunal's decision that there was no Tupe transfer where a maintenance contract passed from one contractor to another. According to the EAT, the tribunal relied too heavily on Süzen and should not have treated the lack of transfer of any assets or employees as conclusive. It should have considered the issue "in the round".
The latest ECJ transfers ruling, Oy Liikenne Ab v Liskojarvi and another (25 January 2001, Case C-172/99, unreported) complicates the picture still further. Following competitive tendering, Oy Liikenne won the contract to run seven bus routes for Helsinki Council. It re-engaged most of the outgoing contractor's staff, but there was no signi