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that the reason, or principal reason, for Mears’ decision to end the ETTA was its belief that the entitlement was outdated.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/xerox-employees-job-did-not-transfer-to-the-philippines/ http://lawandlabour.com/xerox-employees-job-did-not-transfer-to-the-philippines/#comments Sun, 01 Oct 2017 08:59:09 +0000 http://lawandlabour.com/?p=2520 Generally, the fact that one’s work is being transferred overseas is enough to make an employee object to the transfer. But in the case of Xerox v Zeb, the employee decided that he was willing to relocate from Wakefield in the UK to Manila in the Philippines. The question was whether he was entitled to transfer with his UK terms and conditions of employment preserved.

Mr Zeb worked in the Finance Accounting team at Xerox in Wakefield. In 2014, Xerox decided to move the services carried out by his team offshore to Manila. The transfer of services was covered by the transfer of undertakings legislation (TUPE). The affected staff were given a choice of either objecting to the transfer, in which case they would receive an enhanced redundancy package, or not objecting, in which case they would receive statutory redundancy pay only.

Mr Zeb chose not to object to the transfer. He argued that under TUPE he was entitled to transfer to Manila on his UK terms and conditions of employment. These were much more favourable than the local terms and conditions on offer for the job, therefore Xerox (who was hoping to make cost savings by moving the jobs offshore) disagreed. Xerox dismissed Mr Zeb in October 2014 and paid him statutory redundancy.

Mr Zeb complained that he had been unfairly dismissed. He argued that redundancy was not the real reason for his dismissal, but, if it was, Xerox had failed to follow the correct procedure before making him redundant. The Employment Tribunal agreed with Mr Zeb that redundancy had not been the real reason for his dismissal. It further found that his contract had been varied under TUPE and he was entitled to work in the Philippines under his UK terms and conditions. Xerox appealed the Tribunal’s decision.

The Employment Appeal Tribunal (EAT) disagreed with the Tribunal’s judgment. It found that Mr Zeb’s employment contract had not been varied because the parties had not agreed as to the proposed change to his terms. Mr Zeb wanted to changed his place of work to Manila, but retain his remaining UK terms, while Xerox would only accept his relocation to Manila if he was employed under the same terms as local staff. No agreement had been reached and the contract could not be varied unilaterally, therefore Mr Zeb’s contract had not been varied.

The EAT also found that the Tribunal had erred when considering the reason for dismissal as the judge had failed to apply the requisite test for redundancy dismissals correctly. The EAT found that the Tribunal should have focused on the reason for Mr Zeb’s job being terminated, and not why Xerox had refused to employ him offshore. A further error was the Tribunal’s failure to consider Regulation 7 of TUPE which covered transfer-related dismissals.

In conclusion, the EAT allowed Xerox’s appeal and remitted the case to a new Tribunal for reconsideration.

CASE Xerox Business Services Philippines Inc Ltd v Mr J Zeb, Employment Appeal Tribunal, 24 July 2017

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 http://lawandlabour.com/how-might-brexit-affect-employment-law/ http://lawandlabour.com/how-might-brexit-affect-employment-law/#comments Sun, 15 May 2016 10:26:02 +0000 http://lawandlabour.com/?p=2321 On 23 June 2016, a referendum will be held in the United Kingdom to decide whether this territory should leave the European Union (‘Brexit’). If Brexit were to take place, this development could have a significant impact on employment law.

Much of the legislation relating to employment rights has its foundation in European law. In addition, UK courts have to abide by the decisions of the European Court of Justice when interpreting any employment law that has its basis in EU law.

In the table below, we summarise which areas of law are likely to change.

Despite the concerns noted above, any changes are unlikely to take place immediately following Brexit. The rules governing EU membership mean it will take two years for the UK to leave the EU. The Government would therefore be more likely to retain current legislation for a period of time before making changes to individual legislation on a piecemeal basis as and when necessary.

“European Union flag” by Flikr user Yanni Koutsomitis used under Creative Commons Attribution 2.0 license

The London Borough of Havering owned a site which consisted of an ice rink and a car park. Havering contracted out the management of the site to Saturn Leisure who in turn sub-contracted responsibility for the car park to Regal Car Parks. In April 2013, Saturn ended its involvement with the site, with responsibility for the car park returning to Havering.

Mr Jinks was an employee of Saturn. He argued that his employment had transferred to Regal when they were sub-contracted to look after the car park and had then transferred to Havering when they took back control of the car park from Saturn. Havering disputed that Mr Jinks had become their employee. He subsequently brought a claim for unfair dismissal in the Employment Tribunal.

The claim failed to progress beyond the preliminary stage. The Employment Tribunal noted that when a service provision change under TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) occurs, the client of the sub-contractor must be the same both before and after the transfer. The Tribunal found that in this case Saturn had been the client of Regal. Saturn had given up its interest in the car park without transferring the benefit of its contract with Havering to another sub-contractor. The Tribunal struck out the claim because it found that the requirements for a TUPE transfer had not been met.

The EAT disagreed with the approach taken by the Employment Tribunal and decided that the employment judge had misdirected himself in law as to the correct approach to TUPE.

The EAT focussed on Regulation 3(1)(b)(iii) of TUPE which applies to an outsourced contract that is taken back in house. The EAT noted that Regulation 2(1) of TUPE widens the meaning of “contractor” so it can be treated as including the word “sub-contractor”. This meant Regulation 3(1)(b)(iii) could extend to activities that cease to be carried out by a sub-contractor on a client’s behalf which are then carried out instead by the client on its own behalf.

The case turned on who was the correct client for TUPE purposes and whether it could be said that Havering was the ultimate client of Regal. This question needed to be determined on the facts of the case and was not merely an issue of law. The Tribunal had not considered this issue and had taken too narrow an approach by determining that only Saturn could be Regal’s client and not considering whether Havering could also be Regal’s client.

“The Employment Judge took an impermissible short cut by treating the client of a sub-contractor as necessarily being, and only being, the contractor to which it was contractually bound to provide a service…the person on whose behalf services are provided by a sub-contractor may not necessarily be the contractor from whom the sub-contract is held. ” Employment [...]]]> http://lawandlabour.com/client-under-tupe/feed/ 0