Employment Tribunal rules that ‘workers’ are covered by TUPE

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What happened?

Max Dewhurst and two colleagues, all from the Independent Workers Union of Great Britain, claimed that their previous employer, CitySprint, owned them over £35,000. They asked that the sum should now be paid by their current employer, eCourier, a subsidiary of Royal Mail.

Royal Mail said that the 2006 regulations did not protect “workers” in the transfer of undertaking from CitySprint to eCourier. Therefore, they did not consider to be in breach of their informing and consulting obligations, by failing to consult in respect of the affected workers.

The claimants argued that Royal Mail was wrong to think TUPE did not apply, and the Employment Tribunal agreed. However, the Employment Appeal Tribunal (EAT) considered the Royal Mail’s belief to be genuine and gave them 42 days to appeal the decision.

What does it mean?

If the EAT agrees with the decision handed down by the Employment Tribunal, then TUPE transfers will encompass a much wider range of individuals, including zero-hours workers, causal employees and other persons who provide personal services under a contract, who all whom fall under the definition of ‘worker’.

However, under the Employment Rights Act 1996, a worker is not entitled to bring an unfair dismissal claim, nor do they have the right to redundancy, because even if they have genuine worker status, they are not regarded as “employees”. This leaves workers who are dismissed as a result of the transfer without an adequate remedy.

The wider impact on the sector depends on the EAT’s ruling. To ensure compliance with the EU Acquired Rights Directive, the definition of an employee for the purposes of the Employment Rights Act 1996 may have to be broadened to include workers to enable them to bring a TUPE-based unfair dismissal claim.

Whether it’ll matter if/once we leave the EU, and whether TUPE will be deregulated post-Brexit under a possible Conservative government, is also yet to be confirmed.

Conclusion

This case blows open a possible unforeseen expansion in protection to those with “worker” status, but who fall short of the definition of an employee. If you’re purchasing a business, or looking to take over new outsourced services, you should carefully follow this case as it develops. You may be inheriting a much wider workforce than you first thought, and you should ensure robust due diligence beforehand.