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Workforce reorganisation in the run up to a transfer
[ch 12: pages 366-368]Employers often use the run up to a transfer to reorganise or rotate the workforce, so that only chosen groups of employees are assigned to the organised grouping of transferring employees (also referred to as being “in scope” for the transfer). Sometimes this is done to enable employees to remain with their existing employer. This is necessary because otherwise, under regulation 4 of TUPE, the employment contract of any employee who remains within the organised grouping at the transfer date will transfer automatically, whether or not the employee or the employer wants this (Royal Mail Group Limited v CWU [2009] EWCA Civ 1045). The only way of preventing this is to object before the transfer, and objecting to a transfer carries its own risks, as explained on page 368.
As the BIS TUPE guidance 2014 makes clear, TUPE “does not prevent the transferor from retaining those individuals whom they had permanently reassigned to other work outside the organised grouping in advance of a transfer”.
Employees should be informed and consulted in good time about any planned pre-transfer reorganisation. Where there is a recognised union, the consultation must be with the union. The duty to consult in relation to TUPE is explained on page 370.
Employees who are within the organised grouping on the transfer date who want to transfer cannot be forced to remain with their employer.
Simply leaving staff in place at the transfer date but assigning them to work for the transferee on a straightforward secondment model will not prevent the employment transferring to the transferee automatically on the transfer date. This is regardless of the parties’ intentions, and can even happen without their knowledge:
In 1990, three civil servants were sent to work for the Training and Enterprise Council (TEC), on what they (and their civil service employer) understood to be a straightforward “secondment” arrangement. For three years, all the parties believed that the individuals were still employed by the Civil Service and behaved accordingly.
The House of Lords (now the Supreme Court) decided, following a European Court ruling, that their employment contracts had in fact transferred automatically to the TEC in 1990, even though nobody appreciated this at the time, or for the following three years.
North Wales Training and Enterprise Council Limited t/a Celtec v Astley [2006] UKHL 29
www.publications.parliament.uk/pa/ld200506/ldjudgmt/jd060621/nwales-1.htm
A equally startling result was reached in the following case:
Ms McLean was a BBC occupational health nurse. When the BBC proposed to transfer its HR Department to Capita, she was unhappy but she, the BBC and Capita agreed that she would be “seconded” to Capita for a six week trial period during which she would be paid by the BBC. She resigned her BBC role on this basis. She then worked the six-week secondment with Capita, during which the BBC paid her salary, believing she was still their employee. At the end of the six weeks, she brought proceedings for unfair dismissal against the BBC and Capita. The tribunal dismissed the claim against the BBC, because her employment had transferred to Capita automatically on the transfer date.
The EAT agreed, confirming that McLean’s employment transferred to Capita on the transfer date. “She was, clearly, only prepared to work for them for a limited period of six weeks but that being so, she cannot, at the same time, insist that she objected. What her approach shows is that she was in fact agreeable to working for the second respondents, albeit only for a short period.” The fact that nobody realised that the employment had transferred did not stop McLean losing her right to object to the transfer (see page 368).
Capita Health Solutions v BBC [2008] UKEAT34/07
Where an employer fails to appreciate that a transfer has taken place until too late, they are likely to be liable for a significant protective award for failure to inform and/or consult properly about the transfer (see page 374).