Test
cases can be used as a benchmark for employers to navigate their way through
confusing TUPE legislation and workers’ rights during business transfers
The
rights of employees during business transfers can be confusing. Equally
confusing, is the TUPE law surrounding whether they can be rightfully
transferred as part of the business. There are many cases resulting from TUPE,
but these few may help to provide some guidance.
In
a case put before the European Court in 1986 involving a transfer of
undertakings, the European Court concluded that "an employment
relationship is essentially characterised by the link between the employee and
the part of the undertaking or business to which [they are] assigned to carry
out [their] duties" (Botzen v Rotterdamsche Droogdok Maatschappij BV
[1986] 2 CMLR 50). Therefore, in any case involving a transfer of undertakings,
it is necessary to look at the employment arrangements as a whole and not just
at a snapshot of activity immediately prior to the transfer.
Two
recent TUPE cases illustrate this well. In Securiplan v Bademosi (EAT/1128/02),
the Employment Appeals Tribunal (EAT) dealt with whether an employee was
assigned to part of the undertaking which transferred.
Bademosi
had worked on another site for many years, but had been transferred temporarily
to the Magistrates’ Court for a period of one year. The TUPE transfer took
place a few weeks before he was due to return to the other site. The EAT upheld
the tribunal’s decision that Bademosi was not assigned to the Magistrates’
Court – and therefore did not transfer under TUPE – because his assignment to
the Magistrates’ Court was a temporary placing. It was not appropriate to look
at the place where he worked immediately before the transfer (the Magistrates’
Court). Rather, the wider circumstances should be examined to decide whether he
was truly assigned to the Magistrates’ Court contract, which he was not.
It
neatly illustrates the correct test for assignment as laid down by the European
Court in Botzen. It is often misleading to take a snapshot of the amount of
work an employee does for a particular part of a business immediately before a
transfer of undertakings. This may not be correct, viewed in the light of the
employment arrangements as a whole.
Finally,
in Skillbase Services Ltd v (1)King (2) Falkirk Council (EATS/0058/03), Falkirk
Council had put its local repair requirements under contract to Skillbase.
General maintenance housing contracts were administered from a depot at
Grangemouth. King was a branch manager at Grangemouth, and managed all the
contracts supervised out of that branch. About 80 per cent of the branch’s
turnover came from the Falkirk Council contract. Despite this volume of
business, King remained responsible for all other contracts managed out of the
branch, but was not responsible for the day-to-day supervision of the Falkirk
contract.
In
2001, the council carried out a best value review of the function and decided
to bring it back in-house. A dispute arose about who within the Skillbase team
was on the ‘transfer list’ to go back to the council.
The
employment tribunal held that King was not directly assigned to the contract.
The EAT declined to interfere with the decision of the employment tribunal,
recognising the distinction between someone working exclusively on a particular
contract, and a person employed in an executive capacity and managing a branch,
as King was.
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I
believe this was the right outcome. A percentage test doesn’t always give a
true indication of whether an employee is assigned to an undertaking. Although
80 per cent of the business passing through related to Falkirk, King wasn’t
employed solely to look after the Falkirk contract, and he was responsible for
other business passing through the depot.
By
John McMullen, Head of international employment law, Pinsents
