Does an employer have to consult with the entire workforce when undertaking a TUPE transfer?

8 January 2010

Affected employees
The Employment Appeal Tribunal (“EAT”) in Unison v Somerset County Court, Taunton Dean B.C., & South West One Ltd (2009) has clarified the categories of employee an employer must inform and consult in relation to a “relevant transfer” under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”). UNISON complained that the employers in this case had failed to inform and consult affected employees and their representatives in accordance with Regulation 13 of TUPE prior to transferring staff to another organisation.

Regulation 13(1) defines "affected employees" as:

"… any employees of the transferor or the transferee … who may be affected by the transfer or may be affected by measures taken in connection with it; and references to the employer shall be construed accordingly."

The Department for Business, Innovation and Skills’ (“BIS”) guidance on TUPE transfers states that:

"The Regulations place a duty on both the transferor employer and new employer to inform and consult representatives of their employees who may be affected by the transfer or measures taken in connection with the transfer. Those affected employees might include ... (those) whose jobs might be affected by the transfer; or see their new colleagues in employment with the new employer whose jobs might be affected by the transfer."

UNISON argued that the BIS guidance and Regulation 13(1) meant that “affected employees” extended to the whole of the workforce or to everyone in the workforce who might apply for a vacancy in the part transferred at some point in the future but who had not applied already. The EAT rejected this argument because it would widen the duty to inform and consult under TUPE beyond the terms envisaged by the Regulations.

Special circumstances
The employers (actually the County Council rather than the County Court of the official title) had consulted UNISON in relation to the majority of the transfer details. However, fast moving events and an approaching deadline meant, the employers claimed, that it was not reasonably practicable for them to consult the affected employees and their representatives about a staffing agreement that had been concluded at a late stage in the transfer.

The EAT upheld UNISON’s complaint that the union had had no real opportunity of considering the terms of the staffing agreement in its final form or raising any concerns that it might have had relating to it and the TUPE transfer. However, the EAT decided that a “special circumstances” defence could be raised to protect the employers in this case because the circumstances relating to the staffing agreement were unforeseen, unexpected and something out of the ordinary run of commercial or financial events. They were special to the facts of this particular case and the special circumstances rendered it not reasonably practicable for the employer to inform and consult despite having taken all steps towards its performance as were reasonably practicable in the circumstances.

Comment
If UNISON’s definition of “affected employees” had been accepted by the EAT, in many, if not most, TUPE cases every employee of the organisation concerned is potentially would be an "affected employee" and would have to be consulted over the transfer. The categories of employee to be consulted in a TUPE transfer have been reconfirmed in this case as being those:

• who will be or may be transferred;
• whose jobs are in jeopardy by reason of the proposed transfer; and
• who have internal job applications pending at the time of transfer.

The definition does not extend to everyone in the workforce who might, in the future, apply for a vacancy in the part transferred.