TUPE: Can transferring employees bring consultation claims against the transferee?


In DLA Piper’s latest case report, the Employment Appeal Tribunal (EAT) held that employment tribunals have no jurisdiction to entertain freestanding claims by transferred employees against the transferee for its failure to provide the transferor with information about the measures that it envisages it will take in relation to the transferring employees.

Allen and others v Morrison Facilities Services Ltd EAT/0298/13


The claimants were employed by a facilities management company performing a housing maintenance contract for Leeds City Council. Following a retendering exercise, new contracts were awarded to a number of new providers, including the respondent, Morrison Facilities Services (MFS). The claimants were employed in the part of the services that were taken on by MFS. This resulted in a TUPE transfer to MFS under the “service provision change” provisions of TUPE.

Employment tribunal claims

The employees who had transferred brought a number of claims against both their old employer and MFS alleging various failures in the consultation process in the run-up to the transfer. Under TUPE, the transferring employer is required to inform and, if appropriate, consult with either elected employee representatives or representatives of a recognised trade union. Regulation 13(2)(d) of TUPE obliges an employer to inform representatives of the measures in connection with the transfer that it envisages the transferee will take. Regulation 13(4) of TUPE obliges the prospective new employer to provide the old employer with relevant information in advance of the transfer to enable the transferring employer to perform the duty imposed by reg.13(2).

In addition to the various claims brought against their original employer, the claimants also brought a claim against MFS that it had failed to comply with its duty under reg.13(4) of TUPE. However, the claims against the claimants’ original employer were subsequently withdrawn or settled, leaving only the claims against MFS under reg.13(4).

At first instance, the employment tribunal rejected the claims and the employees appealed to the EAT.

EAT decision

The question arising was whether or not a claim can be brought against a transferee by transferred employees for the transferee’s failure to comply with its obligation under reg.13(4) to provide information to the transferor to enable it to comply with its obligations under reg.13(2)(d).

The EAT considered that reg.13(4) does not impose an obligation on employers to provide information to employees. The entitlement to be provided with the information belongs to the transferor, not the transferring employees. The EAT also considered the purpose of the Acquired Rights Directive (which TUPE implements) and noted that the Directive does not require the introduction of the right of redress for the benefit of transferred employees against a transferee. The EAT therefore concluded that to hold that an employee can pursue a claim against a transferee for breach of its obligations under reg.13(4) would not achieve the Directive’s purpose.

The EAT also considered that it is the employee’s status at the date of the non-compliance that dictates the entitlement to bring a claim. At the time of the alleged non-compliance with reg.13(4), MFS was not the employer. The mechanism in reg.15(1)(d) does not permit transferred employees to bring a claim directly against the transferee, MFS. In addition, transferred employees do not obtain standing to claim against a transferee on the ground that they later become employees of the transferee, pursuant to the transfer.

Regulation 15(5) provides that the only route for transferred employees to obtain compensation from a transferee is to bring a claim against the transferor and for the transferee to subsequently be made party to the proceedings on the basis that it failed to provide the transferor with the requisite information under reg.13(4). The EAT noted that this was not available to the transferred employees in the circumstances, given that the claims against the transferor had already been settled or withdrawn.

The EAT dismissed the employees’ appeal, holding that it had no jurisdiction to entertain a freestanding claim by transferred employees against the transferee for its failure to comply with its obligations under reg.13(4).

Guy Lamb

About Guy Lamb

Guy Lamb is a partner at DLA Piper.
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