Under the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE), employers are required to consult with employee representatives before the transfer about how it might affect them.
In Howard v Millrise Ltd t/a Colourflow (in liquidation) and anor (2005, IRLR 84), the employment appeal tribunal (EAT) has said that even if there are no elected employee representatives, the employer still has to consult with any individuals affected by the transfer.
What were the facts?
After working as a printer for Millrise Ltd for just over a year, Mr Howard was given one month's notice of redundancy on 15 April 2003. On 30 April, the company went into liquidation and its undertaking was transferred as a going concern to SG Printers, trading as Colourflow.
Mr Howard subsequently made a number of tribunal claims against both companies, neither of which turned up for the hearing. The employment tribunal upheld his claims of unfair dismissal and unauthorised deductions from wages, but rejected his argument that he had a right to compensation because he had not been consulted about the transfer.
The tribunal said that the provisions under regulation 10(2A) of TUPE (see Box 1, below) "appeared to apply only to appropriate representatives", and therefore Mr Howard was not entitled to be compensated for not having been consulted.
Box 1
Regulation 10(8) TUPE
Where:
(a) the employer has invited any of the affected employees to elect employee representatives, and
(b) the invitation was issued long enough before the time when the employer is required to give information under para. (2) above to allow them to elect representatives by that time, the employer shall be treated as complying with the requirements of this regulation in relation to those employees if he complies with those requirements as soon as is reasonably practicable after the election of the representatives.
(8A) If, after the employer has invited affected employees to elect representatives, they fail to do so within a reasonable time, he shall give to each affected employee the information set out in paragraph (2).
What did the EAT Decide?
The EAT, however, disagreed. It said that although regulation 10(2A) refers only to appropriate representatives, regulation 10 (8A) says that "if, after the employer has invited affected employees to elect representatives, they fail to do so within a reasonable time, he shall give to each affected employee the information" that is required under the regulations (see Box 2, below).
It said that this provision required the employer to set the ball rolling by inviting affected employees (assuming there were no recognised trade union representatives or other elected or appointed representatives already in place) to elect representatives for the purposes of TUPE.
The employers in this case failed to do so, and because they did not appear before either the tribunal or the EAT, they were unable to put forward a defence of "reasonable practicability". Mr Howard therefore had the right under regulation 11(1) to make a complaint to a tribunal.
The EAT remitted the matter back to the employment tribunal to decide on a suitable award, which may be deemed to be anything up to 13 weeks' pay.
Box 2
Regulation 10(2A) TUPE
For the purposes of this regulation the appropriate representatives of any employees are:
(a) if the employees are of a description in respect of which an independent trade union is recognised by their employer, representatives of the trade union, or
(b) in any other case, whichever of the following employee representatives the employer chooses:
(i) employee representatives appointed or elected by the affected employees otherwise than for the purposes of this regulation, who (having regard to the purposes for and the method by which they were appointed or elected) have authority from those employees to receive information and to be consulted about [the transfer] on their behalf
(ii) employee representatives elected by them, for the purposes of this regulation, in an election satisfying the requirements: of reg. 10A(1).
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