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TUPE: Guidance given on the time frame for informing and consulting

22 December 2009

The Employment Appeal Tribunal has clarified the timing for giving information to employee representatives where a TUPE transfer is proposed.

Regulation 13 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) imposes two distinct duties on employers:

TUPE does not specify a clear timetable for employers to comply with these duties it simply states that information under the Information Duty must be given,

 “long enough before a relevant transfer to enable the employer of any affected employees to consult the appropriate representatives of any affected employees,…”     

Employers may be surprised to know that in IPCS v Secretary of State for Defence [1987] IRLR 373 the High Court held that the reference to “consult” was to voluntary consultation started by employee representatives once they had the requisite information but which a seller did not legally have to participate in.

Where an employer or transferee breaches its obligations to inform and/or consult, a tribunal may award up to 13 weeks' pay for each affected employee.  In GMB v Susie Radin Ltd [2004] IRLR 400 the Court of Appeal stated that when assessing such an award a tribunal should start with the maximum and only reduce this where there are mitigating factors.

The facts
In Cable Realisations Ltd v GMB Northern, the seller’s board agreed to sell its cable business on 28 June and notices informing the workforce of this decision were posted the next day. Meetings took place with the union on 3 and 25 July.

On 15 August the seller received the purchaser’s “measures letter” which confirmed it envisaged taking no measures in relation to transferring employees. On the same day the seller provided the union with the information required to comply with the Information Duty. At a further meeting on 17 August it answered the union's questions arising from that information.

The seller’s annual two-week shutdown took place between 20 and 31 August 2007. About 99% of the union's employees were on holiday and about 85% were away from home during that time. The transfer completed on 3 September.

The union brought tribunal claims on behalf of its members that the seller had failed to inform and consult. The tribunal decided that the seller had breached the Information Duty by failing to inform the union long enough before the transfer on 3 September. Due to the annual shutdown, there was not enough time between 15 August and 3 September to adequately discharge its duty.

Notwithstanding that the Consultation Duty did not arise (as there were no measures), the tribunal considered that the transfer date could reasonably have been deferred until soon after the workforce returned on 3 September to allow for a short period of voluntary consultation. The employer appealed this aspect of the decision.

However, it awarded just three weeks' wages in respect of each of the union's affected members. The union appealed this aspect of the decision.

The EAT decision
The EAT upheld the tribunal’s decision on the award of three week’s pay. This was not a case where the information had not been provided at all and there had been no breach of the Consultation Duty, such an award therefore reflected the justice of the case.  

The EAT refused to uphold the employer’s appeal and rejected its argument that the IPCS case had been wrongly decided. The EAT’s view was that the Information Duty was not restricted to facilitating the Consultation Duty, the purpose of giving information  was to assist any voluntary consultation prior to the transfer.

The EAT also held that, to fully engage in meaningful consultation, the union needed to be available to speak with management and their members. This was not practicable during the summer shutdown and the tribunal had been entitled to take this into account when deciding the whether the employer had provided the information "long enough" before the transfer took effect.

Conclusion
This is a salutary lesson for companies involved in TUPE transfers. Given the facts of this case the outcome may be considered surprising – after all the employer was talking to the union from 3 July until the annual shut down on 20 August. 

When no measures are envisaged on a TUPE transfer the tendency is to assume that time for informing and consulting can be cut down to the very minimum. However, this case demonstrates clearly that failure to build in time for adequate discussion and genuine dialogue with employee representatives (even where the legal Consultation Duty does not apply) is likely to be a breach of regulation 13 of TUPE.   

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Helen Burgess

Associate
T: 03700 86 5028
I: +44 (0)115 906 5028
E: helen.burgess@shoosmiths.co.uk