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Recent TUPE cases illustrate the need for expert legal advice

The Employment Appeal Tribunal has recently given judgment regarding 2 interesting TUPE cases. Both cases illustrate the complexities of TUPE and the need for employers to take expert legal advice on it’s application . The Employment tribunals were held to have erred in both cases.

In Hyde Housing Association Ltd and others and Layton the claimant was employed by Martlet Homes Ltd as a decorator.  He continued to be employed by Martlet although it joined Hyde Group and became a subsidiary of Hyde Housing Association Ltd from 1 January 2008. Hyde Group become responsible for providing centralised HR and payroll services to Martlet.

On 1 August 2013 there was a restructure.  The claimant was offered a contract of employment as a Repairs Specialist. He would be jointly and severally employed by all members of the Group at any one time which, of course, included Martlet.  The claimant refused to sign a contract and he was given notice of termination of his employment with effect from 16 October 2013.  He was offered re-engagement on the terms and conditions set out in the new contract of employment.  He signed a new contract which formally started on 17 October 2013 but alleged that the termination of his former contract was unfair and brought a claim for unfair dismissal.  The first question was whether there had been a relevant transfer for TUPE purposes and, at first instance, the Employment Tribunal found that there was a transfer from Martlet to Martlet and the other members of the Hyde Group.  The Employment Appeal Tribunal disagreed.  This was principally because Martlet continued to be liable to its employees as a consequence of its several liability and the TUPE regulations require the transferor and the transferee to be different.  The Employment Appeal Tribunal found that the identity of the employer had not changed in a way that was legally relevant for TUPE purposes.

In another case of Inex Home Improvements Ltd and Hodgkins and others the claimants were all employed by Inex Home Improvements Ltd to perform various building works on a contract with Sandwell Homes.  These works had been sub-contracted to Inex by Thomas Vale and Thomas Vale released the work in tranches each with its dedicated work number.  The claimant and his colleagues were laid off when works order number 8 came to an end and Thomas Vale had not released a further tranche of work.  In January 2013 following what appears to have been a falling out between Inex and Thomas Vale, Thomas Vale issued works order number 9 to another contractor called Localrun .  The work was essentially the same in that the work had been been placed with Inex in works order number 8.  At first instance the Employment Tribunal concluded that this amounted to a service provision change under TUPE, however, the Employment judge found that because the claimant had been temporarily laid off he could not have formed part of an organised grouping of employees which had as its principal purpose the carrying out of the activates concerned on behalf of the client.

The Employment Appeal Tribunal disagreed and concluded that a temporary absence from work did not bar the employees who had been involved in the relevant activities from their status as an organised grouping of employees. An organised grouping may well continue in being despite a temporary cessation of the activity.

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