Kerry Foods Ltd v Creber (Employment Appeal Tribunal) [2000] IRLR 20
Employers are under an obligation to consult on transfers of undertakings and on those redundancies where 20 or more workers are to be made redundant. What happens when there is a failure to consult and a transfer then takes place? Who is responsible for the failure - the old employer or the new one?
In 1985 the Employment Appeal Tribunal had decided, in the Angus Jowett case that liability did not transfer: it stayed with the old employer. The EAT has decided now that the position is different.
The recent EAT decision in Kerry Foods emphasises that the right to consultation is a right designed to protect the affected workers as individuals. This was a point established in the European Court case against the UK government which declared it unlawful to deprive workers of the right to consultation where the employer did not recognise a union.
On this basis, the EAT concluded that liability for a failure to consult arises in connection with an individual's contract of employment and therefore transfers under Regulation 5(2)(a) of TUPE.
The EAT also said that liability would have been transferred by the operation of Regulation 5(2)(b) which says that anything done by the old employer in relation to a contract of employment or an employee is treated after the transfer as if it had been done by the new employer.
This must be right. It would seem wrong if these rights did not transfer, especially as the consultation on a transfer related primarily to the measures proposed by the transferee: this decision gives an incentive to transferees to ensure that the transferor gets the information necessary to comply fully with the consultation obligation.
It remains to be seen whether this decision will have an impact on the debate over whether liability for personal injuries sustained before the transfer passes over to the new employer. There are conflicting High Court decisions in Martin v Lancashire County Council and Bernadone v Pall Mall. This will be considered by the Court of Appeal in March 2000. The Court will also be considering whether the rights in respect of the injury under the Employers' Liability Compulsory Insurance policy transfer into the new employment. This is also an issue being considered by the government in the proposed consultation on amendments to the TUPE Regulations. Whatever the outcome, the purpose of the Regulations is to safeguard the rights of employees and workers cannot be left in a situation where there is no insurance cover for injuries sustained at work.