Amicus and ors v Glasgow City Council and ors
The 2006 Transfer of Undertakings (Protection of Employment) Regulations (TUPE) require employers to inform and consult with employee representatives before a transfer takes effect. In Amicus and ors v Glasgow City Council and ors (IDS 874; 2009 IRLR 253), the Employment Appeal Tribunal (EAT) said that this obligation does not apply post-transfer.
Basic facts
The City of Glasgow Council decided in 2006 to transfer its building services division to LLP, which it had set up in July the same year. On 6 October the Council transferred two thousand workers to LLP under the TUPE regulations.
The relevant unions claimed that both the Council and LLP had breached the requirement to inform and consult with them under regulation 13 of TUPE. They also argued that Article 7 of the 2001 EC Acquired Rights Directive required the transferee (LLP) to consult with them after the transfer.
Relevant law
The third paragraph of article 7(1) of the directive states that “the transferee must give such information to the representatives of his employees in good time, and in any event before his employees are directly affected by the transfer as regards their conditions of work and employment”.
Article 7(3) of the directive states that “the information must be provided and consultations take place in good time before the change in the business … is effected”.
Regulation 13(6) of the TUPE regulations requires employers to “consult the appropriate representatives of [affected employees] with a view to seeking their agreement to the intended measures”.
Tribunal decision
The tribunal decided that the obligation to consult only applied “on a pre transfer timetable”. This was because the information and consultation requirements on the transferee under article 7(3) only applied before the “change in the business". As the tribunal decided that this was the same as the date of transfer of the business, there was no post transfer obligation on LLP to consult with the unions.
EAT decision
And the EAT agreed with the tribunal. It said that it would not make any sense for transferees to be required to provide the information specified in the directive to employees after the transfer had taken place. Employees needed to have it in advance “to have a chance of persuading the transferee employer to seek to restructure the transaction so as to take account of their interests”.
It pointed out that if the third paragraph of article 7(1) “only obliged the transferee to provide the information by the date of the transfer, it could be advice to the employees of a fait accompli, not of a matter about which they could then meaningfully consult”.
And the same reason applied to the transmission of information required under article 7(3). It did not agree with the tribunal that the words “change of business” in article 7(3) were synonymous with “date of transfer” but could still not see that they could refer to a date later than the transfer date.
As for regulation 13(6), the EAT said that although the regulations could be read as putting a post-transfer obligation on the transferee, it did not think that made sense either. In any event, such as interpretation would be “unduly burdensome” to transferee employers and potentially unworkable as they would never be free of the obligation to consult. This would apply to any relevant measure, however trivial, which would be quite unreasonable and the EAT did not think that anyone could have intended a European directive to impose such an “unreasonable burden”.
It concluded, therefore, that there was no obligation under the directive for transferees to consult post transfer and as the TUPE regulations fulfilled what the directive intended, the appeals could not succeed.