A recent case has put the focus on TUPE and Employee Liability Information.
The Transfer of Undertakings (Protection of Employment) Regulations (2006) as amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (amendment) Regulations 2014 are commonly known as “TUPE.”
The Employment Appeals Tribunal (EAT) has made a decision on the following:
When giving Employee Liability Information to a transferee pursuant to regulation 11 of TUPE, a transferor incorrectly stated that a Christmas bonus was non-contractual, when it turned out it was contractual. Was this a breach of regulation 11, giving rise to a compensation claim?
The EAT has decided this was not!
The case that decided this was Born London Limited v Spire Production Services Limited.
The facts of this case were that Born took over a contract from Spire to print Sotheby’s catalogues.
Prior to the transfer, Spire provided Born with Employee Liability Information. Spire provided details of the employees’ Christmas bonus, and stated that it was ‘non-contractual’.
In this case Born contended that, because the bonus was contractual in nature, Spire had given false Employee Liability Information and Born should be compensated for this misstatement under regulation 12 of TUPE.
The original decision in the Employment Tribunal concluded that Born’s claim had no reasonable prospect of success. All regulation 11 had required Spire to do was to provide particulars of employment as defined by section 1 of the Employment Rights Act 1996. This did not require Spire to state whether or not remuneration was contractual. The EAT has now agreed.
The position is that section 1 of the ERA 1996 sets out the requirements on employers in respect of a statement of employment particulars. Those particulars were not to be read as limited to contractual terms and conditions. But there was no obligation to state whether the particulars were contractual or not. Saying that the bonus was non-contractual went further than the particulars required to be provided for regulation 11 purposes. There was therefore no breach of regulation 11 of TUPE.
This case is a reminder that it is up to the transferee to undertake more due diligence on whether employee remuneration is contractual or not. Further, had this been a case where the transferee enjoyed well drafted warranties and indemnities from the transferor, a claim against the transferor might have arisen.
Farleys Solicitors LLP specialise in commercial employment law & HR for businesses. Advice and support includes TUPE; Employee Liability Information; contracts of employment, staff handbooks, directors service agreements, apprentices, equal pay, recruitment, restructures, disciplinaries, grievances, employee exits, settlement agreements; and Employment Tribunal defence and representation.
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