TUPE

To satisfy the ‘organised grouping’ test when dealing with service provision changes under TUPE, it is necessary to show that the employees were organised in some sense by reference to the requirements of the client. The fact that a group of employees spent most of their time working for a particular client is not be sufficient, in itself, to demonstrate an ‘organised grouping’.

Where, after a TUPE transfer, the transferee dismissed transferring employees and offered them work as franchisees, it could argue (provided that the use of corporate franchisees was not a sham) that it had an economic, technical or organisational reason for the dismissals, making the dismissals potentially fair despite their connection to the transfer.

When a business is sold, it's not uncommon for the new owners to change the contractors who supply that business. The EAT has held that if the change in contractor occurs at the same time as the sale of the business, the TUPE 'service provision change' rules will not transfer the employees of the old contractor to the new contractor because the client before and after the transfer must be the same for those rules to apply.

Companies in administration are not exempt from TUPE. This Court of Appeal decision ends two years of legal uncertainty following conflicting EAT decisions. Where the sale of an undertaking by an administrator amounts to a transfer for the purposes of TUPE, the staff will automatically transfer to the buyer and be protected against transfer-related dismissal.  

While a TUPE transfer may form the background to variations in contractual terms, that doesn’t necessarily make it the reason for them. Whether a post-TUPE variation in terms and conditions is unlawful depends on the reason for the variation – and that’s a question of fact for a tribunal. The EAT has considered this often problematic issue in the context of an agreed change to pay rates two years after a TUPE transfer.

Although a failure to consult under TUPE gives rise to a claim for compensation, it cannot make the entire transfer ineffective. And a person who gave his notice shortly before the transfer continued to be ‘assigned’ to the undertaking transferred despite not attending his office and only doing a small amount of work from home.