Regulation 13(2) of the Transfer of Undertakings (Protection of
Employment) Regulations 2006 clearly provides that:
“Long enough before the relevant transfer to enable the employer
of any affected employees to consult the appropriate
representatives of any affected employees, the employer shall
inform those representatives of …”
After which follows a list of a number of transfer related
issues including when the transfer will be taking place, the legal
social and economic implications of the transfer and any measures
that it is envisaged will be taken.
The Regulation is however silent on how long before the relevant
transfer is long enough.
Given the possibility of a protective award (of up to 13 weeks
full pay per affected employee) being made if this Regulation is
breached the question of ‘how long is long enough’ is one that has
troubled both employers and their legal advisers alike. This much
vexed question has now been considered by the Employment Appeal
Tribunal recently in the case of Cable Realisations Ltd v GMB Northern and while
there was little, if any, guidance given by the EAT as to what
would be long enough we do now know that two working days is not.
Alec Bennett explains more
In this case the transferor, Cable Realisations Ltd (“Cable”)
had been making a loss since late 2006 and in May 2007 made a
decision to either close or sell off its cable business. Sales
brochures were prepared and a non binding purchase offer was
received from an Indian based company, Paramount, on 31 May 2007.
Cable’s holding company decided to pursue the sale on 28 June 2007.
The timetable for the sale then progressed as follows:-
- 3 July 2007 - Cable met representatives from GMB Northern
(“GMB”), the appropriate representatives for the affected
employees, for the first time.
- 13 July 2007 - Cable posted a notice confirming that due
diligence had started.
- 18 July 2007 – Cable posted a further notice confirming it
would comply with all its obligations if a transfer took
- 25 July – there was a meeting between Cable, Paramount and the
GMB at which the timescale for the purchase was expressed in
- 15 August 2007 – Cable received a “measures” letter from
Paramount confirming it did not envisage taking any measures (had
measures been anticipated compulsory consultation would be required
under Regulation 13 of TUPE).
- 15 August 2007 – Cable provided the GMB with the information
required by Regulation 13(2) to the GMB and held a meeting with
- 17 August 2007 – Cable held a further meeting with the GMB and
answered questions they had arising from the information they had
provided on 15 August.
- 20-31 August 2007 – Cable’s annual 2 week shut down took place.
99% of the GMB’s employee’s were on holiday and 85% were away from
- 3 September 2007 – the transfer completed
The Tribunal Claim
The GMB bought a claim alleging Cable had failed to comply with
its Regulation 13 obligations and the Tribunal agreed. In
particular the Tribunal found that:-
- Cable had breached Regulation 13 by failing to provide the
Union with the relevant information required by Regulation 13(2) -
which it had done on 15 August - long enough before the transfer
took place on 3 September. Because of the factory shut down there
had been insufficient time i.e. only 2 working days between the 2
- The Tribunal awarded 3 weeks wages as damages for each of the
GMB’s employee’s - suggesting the maximum 13 week award was for a
failure both to inform and consult (not just inform in time as in
this case) and therefore not appropriate in this case.
Cable appealed the liability finding and the GMB appealed
against the amounts awarded.
The EAT dismissed Cable’s appeal on the basis that:-
- Even though compulsory consultation was not triggered here, the
provision of information required by Regulation 13(2) was to assist
in voluntary consultation prior to the transfer. Therefore
consultation should take place while the proposals were still at a
formative stage, and allow adequate time for the representatives to
respond to the information provided and also adequate time for the
company to then consider the responses.
- In this case to fully engage in meaningful consultation, GMB
needed to be able to speak to their members and this was not
possible during the factory fortnight shutdown.
The GMB also appealed the Tribunal’s decision on the basis that
the amount awarded was too low. While the EAT agreed that the
Tribunal had misunderstood the maximum protective award of pay to
apply in cases where there had been a failure to both inform and
consult (they confirmed the maximum applies to any breach of
Regulation 13) they upheld the decision to award 3 weeks pay only.
In giving their decision on this point the EAT rejected the
arguments for a higher or lower award and concluded that “Like baby
bear’s porridge, it was just right.”
What does this mean for you?
- In the absence of any specific guidance being given by the EAT
it appears as if employers should allow sufficient time between the
provision of information pursuant to Regulation 13 and the date of
the transfer for meaningful consultation to take place, even if the
consultation is not compulsory under Regulation 13.
- Longer time should be allowed especially if, for any period
during that time, the undertaking will be closed or significant
numbers of affected employees will be absent from the
- Meaningful consultation requires sufficient time for responses
to be given and considered – only when this occurs will it be like
baby bear’s porridge - just right!