Who transfers?

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

Only employees transfer, not the self-employed, and not agency workers, unless they are direct employees of an employment agency business that itself transfers.

Regulation 4 of TUPE says that the only employees who transfer to the new employer on the transfer date are those who are:

• employed immediately before the transfer (but see below if you are dismissed immediately before the transfer because of the transfer); and

• assigned to the organised grouping of employees or resources.

You are still protected by TUPE if you are dismissed immediately before the transfer, as long as the reason for your dismissal is the transfer (or for dismissals that predated the 2014 Regulations, a reason connected to the transfer) and there is no valid economic, technical or organisational reason for your dismissal. See page 383 to find out what this means.

To stop employers getting around TUPE by deliberately dismissing employees in advance of the transfer date, regulation 4(3) of TUPE says that the phrase “immediately before the transfer” includes all those employees who would have been employed immediately before the transfer if they had not been unlawfully dismissed because of the transfer.

An employee working temporarily for the transferring part of the business will not transfer. “Assigned” means “assigned other than on a temporary basis” (regulation 2, TUPE).

Identifying who is assigned to the transferring business is not always straightforward. The case law says the focus should be on the link between the employee and the transferring activities. An employee may have more than one role, or the section that transfers may be part of a larger department. Hard questions are likely where time is divided between two or more different parts of the business and only one part transfers. The EAT has said that what is important is to look at where the employee is assigned to work in reality.

Where the issue is in dispute, the employee has to prove that they were assigned to the organised grouping, although the tribunal must remember that the purpose of the Directive is to protect employees (Duncan Web Offset (Maidstone) Ltd v Cooper [1995] IRLR 633). In the case of service provision change, there is obviously a significant overlap between the question whether or not there is an “organised grouping” at all (see page 360) and if yes, who is assigned to the group.

Just “being involved” in the carrying out of the relevant activities immediately prior to the transfer is not enough to make you necessarily assigned to the transferring group. Relevant factors include:

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

• your tasks under the employment contract;

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

• the organisational framework.

There is no “percentage” test. Although the percentage of time someone spends assigned to the transferring tasks is useful as one factor in deciding whether someone is assigned to the transferring group, it is not decisive. It is a question of fact for the tribunal, looking at all the surrounding factors. 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. The tribunal decided that his employment did not transfer because only one branch of Skillbase was responsible for servicing the council contract, whereas he had lots of other managerial responsibilities across all the branches of Skillbase.

Similarly, in Birmingham City Council v Gaston EAT/0508/03, a full-time shop steward did not transfer when the maintenance division he was paid to work in transferred. Although he continued to be 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 department because he was no longer assigned to that department.

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