The risk for any employer who dares to change terms and conditions following a TUPE transfer is that the change will be considered to be connected to the transfer, and therefore void. There is an exception if the employer can show that the contractual change was for a reason totally unconnected to the transfer. This what the employer in Tabberer v Mears Ltd sought to do.

The claimants in the case were electricians originally employed by Birmingham City Council, but whose employment had transferred under TUPE from one employer to another a number of times. Their employment transferred to Mears on 1 April 2008.

The electricians’ employment contract provided for the payment of an electricians travel time allowance (ETTA). The ETTA had been introduced in 1958 at a time when electricians employed by the Council travelled between several depots when performing their duties. However, by the time relevant to the claim, only one depot remained.

Mears viewed the ETTA as outmoded and unjustified, and decided not to pay it any longer. The affected electricians disputed this. Litigation then ensued under the title of Salt and others v Mears Ltd. The outcome of that litigation was to find that the claimants in Salt had a contractual entitlement to ETTA despite the courts finding the allowance was “outmoded” and “prehistoric with no resemblance to modern times”. Following the conclusion of the Salt litigation, Mears decided to remove the entitlement to the ETTA with effect from 1 September 2012.

The electricians responded by bringing claims for unauthorised deductions of wages arguing that the contractual variation made in 2012 was void because it was connected with a TUPE transfer. The Employment Tribunal disagreed with the electricians and dismissed their claims. The electricians appealed and the matter proceeded to the Employment Appeal Tribunal (EAT).

The key question for the EAT was, what was the reason for Mears’ decision to end the ETTA? What caused Mears to do what it did?

The EAT concluded that the reason, or principal reason, for Mears’ decision to end the ETTA was its belief that the entitlement was outdated. Crucial to this decision was the EAT’s finding that the Salt litigation was merely the backdrop to Mears’ decision to end the ETTA, not the reason for the decision. The EAT found that the Salt litigation merely confirmed that the ETTA was outmoded, but it did not create a connection between the decision to end the ETTA and the TUPE transfer.

“The operative reasoning – the belief that the payment was outdated and unjustified – did not arise purely on the occasion [...]]]> http://lawandlabour.com/tupe-did-not-bar-employer-from-removing-outdated-travel-allowance/feed/ 0 http://lawandlabour.com/transferor-in-tupe-transfer-need-not-say-which-terms-contractual/ http://lawandlabour.com/transferor-in-tupe-transfer-need-not-say-which-terms-contractual/#comments Fri, 31 Mar 2017 19:37:32 +0000 http://lawandlabour.com/?p=2438 One of the key obligations for an outgoing service provider in a transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) is the provision of information concerning its liabilities towards those employees who are affected by an impending transfer. The outgoing service provider, or transferor, is required to provide specific employment liability information (ELI) to the incoming service provider, or transferee. If the outgoing service provider fails to comply with this statutory obligation, the incoming service provider can seek compensation for any loss suffered as a result.

The Employment Appeal Tribunal (EAT) was recently called upon to consider an appeal concerning ELI relating to a Christmas bonus payment. In 2006, the auctioneers Sotheby’s outsourced the printing of their catalogues to a print finishing firm called Spire Production Services. The printing contract subsequently passed to Born London Limited with the effect that 32 staff transferred from Spire to Born on 1 January 2015.

Prior to the transfer date, Spire provided Born with ELI as required by TUPE. This information included details of a Christmas bonus that was payable every November. Spire described the bonus as being non-contractual as it had been so described when Spire inherited it from Sotheby’s. However, it transpired that all 32 employees had been paid the bonus every year in which they had been employed by Spire. Born realised that the bonus appeared to have become a contractual term through custom and practice. Their suspicions were well founded as the bonus was found to be a contractual term in a separate Employment Tribunal claim brought against Spire by some of the transferring staff.

In Born’s Employment Tribunal claim, it argued that Spire had failed to provide accurate ELI as required by TUPE regarding the contractual status of the bonus. Born sought compensation of £100,000 from Spire. The claim did not succeed at the Employment Tribunal and Born appealed to the EAT.

The EAT noted that Spire was obliged to provide Born with the particulars of employment that an employer is obliged to give an employee under section 1 of the Employment Rights Act 1996. The EAT decided that this obligation did not require that Spire should inform Born of contractual terms only.

I do not read the requirement imposed upon a transferor – to notify the transferee of ‘all the rights and obligations that will be transferred’ – to be limited to simply the contractual rights. Employment Appeal Tribunal

Spire therefore did not have any duty to state whether or not a particular aspect of an employee’s remuneration was contractual or not. In any event, the EAT found that although Spire had mistakenly labelled the Christmas bonus payment as non-contractual, this information did not fall within the section 1 particulars and it was therefore not part of the ELI.

The EAT’s decision will be a relief for the outgoing service provider in a service provision change as it confirms that the incoming service provider must bear the responsibility for carrying out sufficient due diligence to ascertain the extent of its contractual obligations to the employees who [...]]]> http://lawandlabour.com/transferor-in-tupe-transfer-need-not-say-which-terms-contractual/feed/ 0