LRD guides and handbook May 2015

Law at Work 2015

Chapter 12

Who transfers?

[ch 12: pages 382-384]

Another difficult question for those caught up in any transfer is working out exactly who transfers and who does not, and what choices, if any, employees and employers have in deciding who goes and who stays.

Regulation 4 of TUPE (as amended, 2014) says that the only employees who transfer on the transfer date are those who are:

• employed immediately before the transfer (or who were dismissed unlawfully immediately before the transfer because of TUPE); and

• who are assigned to the organised grouping of employees or resources.

If there is a dispute, the onus is on the employee to prove that they are assigned to the organised group.

Employees who work temporarily for the transferring part of the business will not transfer (regulation 2, TUPE).

Just because someone is doing a lot of work on a particular contract in the run up to a transfer, this does not mean their employment necessarily transfers. Equally, someone’s employment could transfer even though they are not actually working on the transferring part of the business at the transfer date. For example:

Mr Armitage worked as a project manager for his employer, ERH Communications Limited. ERH held a network maintenance contract with the Welsh Assembly. When the contract was put out to retender, ERH lost out to the preferred bidder, Costain. Costain accepted that an organised grouping of employees were assigned to the contract and transferred to Costain when it won the bid. However, it disputed that Armitage was assigned to the grouping, even though in the three months leading up to the loss of the contract, his time sheets showed that he spent 67% of his time on it.

The tribunal agreed with Costain. Armitage worked as a “troubleshooter”. His job was to respond to different projects across the business as the need arose rather than being assigned to any one particular contract. It just so happened that he was working a lot on the Welsh Assembly contract in the months running up to the re-tender. His employment did not transfer.

Costain v (1) Armitage and (2) ERH Communications Limited [2014] UKEAT 0048/14/0207

www.bailii.org/uk/cases/UKEAT/2014/0048_14_0207.html

When working out whether an employee transfers to the new business, the focus must be on the link between that employee and the transferring activities. Hard questions are likely where someone’s time is normally divided between two or more different parts of the business and only one part transfers. The EAT has said that tribunals should look at where the employee is assigned to work in reality.

Relevant factors include:

• how much time is spent on the transferring part of a business;

• the employee’s tasks under the employment contract;

• how the employer allocates costs associated with their employment across different parts of the business; and

• where the employee sits in the organisational framework (London Borough of Hillingdon v Gormanley [2014] UKEAT 0169/14/1912).

There is no “percentage” test (Costain Limited v (1) Armitage and (2) ERH Communications Limited [2014] UKEAT 0048/14/0207). However, the percentage of time someone spends assigned to the transferring tasks can be useful as one factor. Whether someone is assigned to the transferring group is always a question of fact for the tribunal. For example:

In Skillbase Services Limited v King [2004] UKEAT0058/03/1201, a manager did not transfer when a local authority maintenance contract on which he spent 80% of his time was awarded to a new provider. Only one branch of Skillbase was responsible for servicing the council contract, whereas King had general managerial responsibilities across all the branches of Skillbase.

Skillbase Services Limited v King [2004] UKEAT0058/03/1201

www.bailii.org/uk/cases/UKEAT/2004/0058_03_1201.html

In Birmingham City Council v Gaston EAT/0508/03, a full-time shop steward did not transfer when the maintenance division he was originally contracted to work for transferred. Although he was paid as a plumber, the only plumbing work he had done since becoming a full-time rep was on an out-of-hours rota. Instead, he worked full-time on trade union duties across several council departments. The EAT found that he did not transfer with the rest of the division because he was no longer assigned to work there.

Birmingham City Council v Gaston EAT/0508/03

www.bailii.org/ew/cases/EWCA/Civ/2004/693.html

The fact that someone is off sick or on maternity leave at the transfer date does not stop them being part of the organised grouping. Their employment contract transfers automatically on the transfer date.