TUPE transfer ? it is all in the timing

20 August 2014

And it would appear that happens when responsibility for the management of the business or service transfers from one entity to another, held the EAT in Housing Maintenance Solutions Ltd v McAteer and others.

We thank Daniel Barnett’s employment law blog for bringing our attention to Dr John Mcmullen explanation of the case.

This case concerned a contract for the repair and maintenance of housing association properties in Liverpool. The housing association terminated its contract with Kinetic on 9 June 2011. Kinetic's staff were informed that they were redundant and that their contracts had been terminated on 9 June.

The housing association began the process of setting up a subsidiary company to provide it with repair and maintenance services (Housing Management Solutions Ltd (HMS)). HMS reassured Kinetic's employees that it would employ them but it did not begin service provision until 1 July 2011. A number of employees brought claims for unfair dismissal, unpaid wages during the interim period and failure to inform and consult under both TUPE and collective redundancy procedures.

A key issue for the employment tribunal was the identity of the employer between 9 June and 1 July.

At first instance, the employment tribunal found that there was a TUPE transfer on 9 June 2011. It found HMS to be the employer from this date as HMS had "accepted responsibility" for the employees and engaged with the employees in "consultation and reassurance".

On appeal, the EAT found that the employment tribunal had erred in its finding that the transfer had taken place at the point where responsibility was "assumed" for the employees. The EAT followed Celtec v Astley and Others [2006] UKHL 29 to the effect that the date of the transfer is the date when responsibility for the transferor's business was transferred. According to the EAT the legal assumption of responsibility for the employees occurs on the date of the transfer, and not vice versa.

The key question for the employment tribunal should be: when did responsibility for the business or service transfer from one entity to another? This is a matter that is not determined by the wishes or intentions of the parties contrary to the facts.