Reality transfer

Cable Realisations Ltd v GMB

Under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) employers have to consult with representatives of employees. In Cable Realisations Ltd v GMB, the Employment Appeal Tribunal (EAT) said that even if the transferee did not envisage taking any “measures” in relation to the transfer, the duty to inform and consult still applied.

The claimants union, the GMB, instructed Thompsons to act on its behalf.

Basic facts

Cable decided in May 2007 to either sell or close its business at the Birtley site and informed the workforce on 29 June that negotiations to sell were underway.

The union first met with the company on 3 July and received the information required under regulation 13(2) on 15 August. This stated that the new owner did not envisage taking any measures “in relation to the transferring of employees in connection with the transfer”.

The factory closed on 17 August for its annual shutdown between 20 and 31 August when nearly all the GMB members were on holiday. The transfer completed on 3 September.

The GMB complained that the company was in breach of regulation 13(2) in that it did not provide the necessary information long enough before the proposed transfer to allow them to enter into consultation with the company. The company argued that as it was not obliged to consult under regulation 13(6) because it did not intend to take any measures in relation to the transfer, it could not be in breach of regulation 13(2).

Relevant law

Regulation 13(2) states that “long enough before a relevant transfer”, the representatives of any affected employees must be given certain information about the transfer (including when it is to take place etc).

The employer must also inform the representative of any measures which the transferee might take in relation to any affected employees who will transfer over “or, if he envisages that no measures will be so taken, that fact”.

Regulation 13(6) then states that if “measures” are to be taken, the employer must consult the representatives of the affected employees to get their agreement to them.

Tribunal decision

The tribunal agreed with the union saying that Cable had failed to inform the union long enough before the transfer on 3 September to allow consultation with the appropriate representatives under regulation 13(2). It was under an obligation to send the information long enough before the transfer for the union to seek voluntary consultation on any issues arising out of the information provided.

Although the necessary information was given on 15 August, this was only two days before the factory shutdown for two weeks when 99 per cent of the union members were on holiday. There was, therefore, very little time for meaningful consultation.

The tribunal awarded three weeks wages in respect of each of the union members who were affected employees, in line with the guidance in Susie Radin v GMB and ors.

EAT decision

The EAT upheld the tribunal’s decision on both counts, saying that as the whole point of the legislation was to help unions engage in voluntary consultation prior to the transfer, the obligation to provide employees with certain information always applied. That was the case even if there were no proposed “measures” being contemplated by the transferee in relation to the transfer.

In this case, the obligation to provide information arose on 13 August. As the union representatives could not contact their members during the shutdown, the tribunal was entitled to take that into account when answering the “long enough” question posed by regulation 13(2).

It also upheld the tribunal’s award of three weeks wages to each affected worker. Although the maximum award is 13 weeks, the EAT said this was “far from being a case in which no information was provided”. It concluded that the award was neither too high (as argued by the company), nor too low (as argued by the union). Instead, “like baby bear's porridge, it was just right”.