So what, exactly, does transfer over on a TUPE transfer? This is not always a straight forward matter and the recent case of Bangura v Southern Cross Healthcare addresses one particular issue, namely whether a former employee transfers if, at the time of transfer, an appeal against her prior dismissal is pending?
TUPE notes that all of the transferor’s “rights, powers, duties and liabilities under or in connection with” the transferring employees’ contracts pass to the transferee.
The issue in this case was whether the former employee should have transferred because there was an appeal pending in relation to her gross misconduct dismissal (6 weeks earlier). The EAT, however, suggested ‘no’ because the employee was not employed immediately before the transfer as is required for TUPE to apply.
The reason for the employee appealing the tribunal’s original decision (which the EAT agreed with), was because it appeared to be inconsistent with an earlier decision of the EAT (G4S Justice Services (UK) Limited v Anstey ). In that case an employee in a similar situation, whose appeal against dismissal was successful, transferred to the transferee under TUPE on the basis that the original dismissal, by virtue of the successful appeal, had been overturned.
This case highlights the need for transferees in TUPE transfers to carry out careful due diligence. This should include exploring the reasons for why employees have left shortly before a transfer. It may be that the transferee should also seek appropriate indemnities from the transferor regarding any liabilities associated with dismissals.
At the time of writing we still await the response to the consultation on changes to TUPE and the draft Regulations. This was expected in early July, but the Government has announced it will now take place in September. This is pretty tight given the Government’s original plan to implement changes to TUPE in October! As soon as we hear further we will let you know.
For more information, help or advice please contact Tim Davies on 0191 211 7927.