Employment Eye - Alert: Transfer of Undertakings - Employment Tribunal Decision Concludes Workers are Protected

A recent Employment Tribunal case (not binding and quite likely to be appealed) made a bold decision that the correct interpretation of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) is that both employees and workers are protected by the legislation. Until this decision it was commonly held that the legislation excluded workers from enjoying any rights under TUPE, such as the right of consultation and to be transferred to the new employer with the same or better terms and conditions of employment.

The recent Employment Tribunal case (Dewhurst & others -v- Revisecatch & City Sprint) carried out a detailed review of the relevant European Directive and case law, alongside the UK national legislation and case law on the interpretation of employees as opposed to workers.

The challenge brought by the Claimants was that reference to “or otherwise” in the TUPE definition of employee is intended to bring workers within scope of the legislation.

The Tribunal concluded that excluding workers from the protections afforded by TUPE legislation “leads to absurdity”. By doing so, workers would be prevented from the protections afforded by the relevant European Directive, whilst receiving protection under different Directives, for example in the right not to be discriminated against. This would clearly be inconsistent with the aims of the relevant Directive. The decision is bolstered by the finding that workers should be within the remit of TUPE as they enjoy some (albeit not all) employment rights that employees do.

The judgement concludes that this interpretation does not “go against the grain” of TUPE legislation, although we believe that if the decision stands in a subsequent appeal, there may be far reaching consequences for employers:

• Businesses and services structured through reliance on workers would potentially face the prospect that staff not previously envisaged as being subject to TUPE may be in scope.
• Any current or recent TUPE transfers may be challenged by workers.
• Liabilities if workers are successful in Employment Tribunal claims can be substantial; for example compensation of up to 13 weeks’ pay per worker for a failure to consult and/or liabilities arising from terminations.

Click here to view the Judgment.