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Todd v Strain and others EATS/0057/10
TUPE transfers | informing and consulting | measures in
relation to transfer
The Employment Appeal Tribunal (EAT) has held that a transferor
should have consulted staff on administrative changes to pay arrangements on a
TUPE transfer.
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Implications for employers
- It is important to tell the entire workforce in writing that a
transfer is to take place and invite them to a meeting to discuss the
proposals. Individuals unable to attend should have the opportunity
to raise concerns individually with line managers or the HR
department.
- This case appears to blur the line between administrative changes
that are an inevitable consequence of a transfer (no consultation
required) and administrative changes that are a departure from normal
practice (consultation required). If in doubt, it is always better
to consult, especially if the issue concerns an important area such as
pay.
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Ms Todd owned a care home that was sold to Care Concern (GB) Ltd
on 4 January 2008, resulting in a TUPE transfer. The workforce found out
about the transfer to a new employer at a hastily arranged meeting on 20
November 2007 that was attended by under one-third of the total
workforce. At the meeting, they were told that their jobs were safe, but
were not given any other information. The news quickly spread among the
other employees. There was no other consultation with staff prior to the
transfer. One of the consequences of the transfer was a change to some of
the arrangements by which staff were paid, including a change to the date on
which they were paid their wages.
Thirty-two employees brought an employment tribunal claim for a
failure to inform and consult appropriate employee representatives about
measures that were envisaged being taking in connection with the transfer,
contrary to reg.13(2) and (6) of the Transfer of Undertakings (Protection of
Employment) Regulations 2006 (SI 2006/246). The tribunal identified some
administrative changes to pay arrangements, including the change to employees'
normal payment date, as measures about which that the transferor should have
consulted the workforce. The tribunal ordered the transferor to pay each
claimant the maximum permitted protective award of 13 maximum weeks’ pay under
reg.15(8) of the Regulations, finding that the failure to inform and consult on
changes to pay arrangements had caused "needless worry" to employees. It
was decided that the transferee was not at fault.
The EAT agreed that the transferor had failed to consult on
relevant measures, namely the changes to pay arrangements. It said that,
although administrative arrangements of this kind are usually necessary in the
context of a transfer and it was not at all clear that there was any
disadvantage to employees, the measures were not an inevitable consequence of
the transfer. The legislation does not prescribe that the effect of a
measure must be disadvantageous to trigger the requirement to consult. In
addition, it could not be said that the changes were so trivial as to make
consultation unnecessary. It is not difficult to imagine how any change to
pay arrangements with which employees are familiar could be unsettling. The
sums involved were no doubt small, but it had to be borne in mind that many of
the employees in question were low paid.
However, the EAT disagreed with the amount of the protective award
that the tribunal had given to the claimants. The EAT acknowledged that it
was not good enough for the transferor to make an announcement about the
transfer at a meeting that was attended by less than one-third of the workforce,
leaving the rest to learn the information at second hand. It went on to say
that the failure was not at the most serious end of the scale: it was not the
case that no information had been given to the workforce at all. There had
been a staff meeting and employees had been given at least some basic
information and, importantly, a reassurance that their new employer would be
making no changes in staffing or terms and conditions following the
transfer. It was realistically understood and intended that that
information would come to the attention of those not attending the
meeting. For these reasons, the amount of the protective award for each
claimant was reduced to seven weeks' pay.
Additional resources
TUPE transfers:
frequently asked questions Get more answers to related questions in the
XpertHR FAQs section:
Case
transcript of Todd v Strain and others (Microsoft Word format, 115K) (on the
EAT website)
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