Workers and TUPE.

An employment tribunal has held for the first time, in the case of Dewhurst v Revisecatch Ltd, that workers who are not engaged under contracts of employment qualify for protection under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).

Such workers contract to provide their services personally but are not carrying on a business on their own account (i.e. they are not self-employed).

TUPE applies to ‘employees’ as that term is defined in those regulations, which are individuals working under ‘a contract of service or apprenticeship or otherwise’, but excluding the genuinely self-employed.

Three cycle couriers worked for CS (UK) Ltd in relation to its contract with HCA Healthcare. Revisecatch Ltd took over the contract with HCA Healthcare and also engaged the couriers to work on that contract. The couriers brought claims, including for failures to inform and consult under TUPE.

This decision is not binding on future employment tribunals, and provides only persuasive authority. Clearly, however, the risk is there that future tribunals could take the same approach to the application of TUPE to workers.

Accordingly, it would be prudent for businesses, who are involved in a TUPE situation, to include workers in information and consultation exercises and the disclosure of statutory employee liability information (“ELI”), and for prospective transferees to include workers within the scope of due diligence exercises and indemnity protections - or otherwise to be prepared for the potential consequences of not doing so.

Breaches of the requirements of TUPE in relation to information and consultation can result in awards of compensation up to the value of 13 weeks’ pay for each affected individual.

Transferees can claim compensation for losses incurred as a result of failures in relation to the provision of ELI, subject to a minimum of £500 per relevant individual.

Further, if a worker is subject to TUPE, transferees will be liable for any pre-transfer acts or omissions of the transferor, such as in relation to unpaid wages or holiday pay or unlawful discrimination. However, as workers do not have unfair dismissal protection, it will be possible for transferees to terminate their contracts, subject to any notice obligations.

Whilst it will be possible for transferees to effectively vary the contractual terms of workers who they retain only in limited circumstances, the absence of unfair dismissal protection means that it will be open to them to terminate workers’ contracts and to offer re-engagement on different terms.

If you have any queries about TUPE, please contact our employment law specialists here.

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