Transfer of undertakings 3: who and what is transferred

Who is an employee ?

The Regulations as a whole protect "employees". Regulation 5 accordingly applies to a "person employed" by the transferor in that capacity. An "employee" for these purposes is defined in broader than usual terms as "any individual who works for another person whether under a contract of service or apprenticeship or otherwise, but does not include anyone who provides services under a contract for services" (reg. 2(1)). The contract of employment referred to in the Regulations is "any agreement between an employee and his [or her] employer determining the terms and conditions of his [or her] employment".

According to the ECJ, the domestic definition of who is an employee is exhaustive for the purposes of the Directive, and it is for domestic courts and tribunals to determine the breadth of its application in any given case (Mikkelsen v Danmols Inventar A/S). The extended definition in reg. 2(1) may therefore cover workers supplied to an employer through an employment agency under a "contract sui generis" (ie a contract which is neither a contract of employment nor a contract for services - see Construction Industry Training Board v Labour Force Ltd). It might also apply to trainees under a government training programme. In the former case, however, it now appears that agency-supplied workers will in some circumstances be employed under an employment contract by the agency (see McMeechan v Secretary of State for Employment). If so, they will not be persons employed by the transferor for the purposes of the Regulations. And, in Cowell v Quilter Goodison Co Ltd and QG Management Services Ltd, the Court of Appeal held that the reg. 2(1) definition of "employee" did not apply to an equity partner in an unincorporated firm of stockbrokers, even if he provided services as a managing partner. It was quite impossible to say that the partner in question was anybody's "servant" or "employee", or that he had an "employment relationship" with any of the other partners in the firm.

More generally, the automatic transfer principle in reg. 5 applies to employment where under his or her contract the employee "ordinarily works outside the UK", and irrespective of the law governing that contract (see Transfer of undertakings 2: relevant transfers).

Employment by transferor

An employee must be employed by the transferor in order for reg. 5 to bite. This seemingly obvious requirement will often be crucial in cases involving complex company group structures. There has been some conflict in the authorities about the extent to which courts and tribunals may be willing to "pierce the veil" of corporate legal personality, and consider the practical realities of power and control within groups of company's in order to determine the question of employment status.

The more traditional approach, which emphasises the sanctity of employment contracts with a particular legal entity, is illustrated in Michael Peters Ltd v (1) Farnfield (2) Michael Peters Group plc. Mr Farnfield was chief executive of the Michael Peters Group plc ("the Group"), a holding company for 25 subsidiary design consultancy companies. Four of those subsidiaries ("the four companies") were located at the same premises as the Group, but Mr Farnfield was responsible for overseeing the financial management and running of all the subsidiaries. Both the Group and the subsidiaries ran into financial trouble, and receivers were appointed. Mr Farnfield was subsequently dismissed as redundant by the Group's receivers. Shortly afterwards the four subsidiaries were sold to the transferee (CLK). According to the sale agreement, the vendors were the four companies and the Group was not a party to the agreement. An industrial tribunal nevertheless found assets owned by the Group, in the shape of goodwill, book debts, office equipment and premises were in reality transferred to CLK, and that part of the group had therefore been transferred along with the four companies. Applying principles derived from an ECJ decision on EC competition law, the tribunal held that the four companies and the part of the Group's assets and functions which were transferred were all part of one "economic unit". Mr Farnfield was consequently employed by the transferor, and was assigned to the part of the undertaking transferred.

Allowing an appeal against that decision, the EAT said that it is not appropriate to apply a competition law approach to an employment situation: "we do not consider it right to have regard to the concept of a single economic unit for the purposes of deciding the present case ..." It would be wrong to pierce the corporate veil, and to say that the business of the four companies was the business of the Group, notwithstanding the fact that the Group owned the goodwill of the business transferred, only the Group could recover debts, the group transferred the premises, and Mr Farnfield's functions went across to the transferee. The EAT asserted that the Group "were not and could not" properly be found to be the transferors of the undertaking transferred. Mr Farnfield was not therefore employed by the transferor.

But the EAT in Michael Peters was not entirely unresponsive to the possibility of applying a less technical approach in appropriate circumstances: "we recognise that there may be business and trading conditions under which subsidiary companies do not have discretion to determine their continued membership of the parent group. Whilst subsidiary companies have a legal entity, and clearly defined legal accountabilities, their ownership and ultimate accountability for performance and financial standards may well be vested in their parent company or group of companies."

A significantly more expansive approach was evident in the Scottish EAT's decision in Sunley Turriff Holdings Ltd v Thomson. Mr Thomson was company secretary and chief accountant of Lilley Construction Ltd (LC) and three of its subsidiaries, including Lilley Construction (Scotland) Ltd (LC(S)), although his contract of employment was at all times with LC. Receivers were appointed for all the companies in the group on 8 January 1993, and LC(S) was sold to Sunley Turriff (STH) on the 18th of the same month. Mr Thomson continued to work ostensibly for LC and assisting the receivers until he was dismissed on 12 March. On the question of whether Mr Thomson was nevertheless employed in the part of the undertaking sold by the receivers, an industrial tribunal said that it was necessary to take the "exceptional step of lifting the veil of incorporation. It was clear that LC(S) was nothing more than a shell company with £100 capital". Irrespective of what on paper the receivers purported to sell, the reality of the situation was that STH was purchasing "all Scottish contracts in the name of LC and LC(S), together with employees engaged in that part of the business transferred."

Upholding that decision, the EAT said that reg. 5 is imperative in its terms and "if the conditions for its application are satisfied, the regulation must be applied, and the consequences worked out after taking account of its application". In the EAT's opinion, the correct approach is to consider, first, whether there was a transfer of an undertaking or part thereof, and whether the individual complainant was an employee of that undertaking or part. It was clear that in the present case, there was a transfer of an undertaking which comprised not merely LC(S), but a "very substantial" part of what had previously been LC (consisting, to all intents and purposes, of LC's work in Scotland).

The purposive approach adopted in Sunley Turriff received implicit support from the EAT in Duncan Web Offset (Maidstone) Ltd v Cooper and others. There Mr Justice Morison first considered a situation in which a person is employed by X to work exclusively on Y's business and Y transfers that business to Z. On the face of it, the Regulations would not apply to transfer the employee in this case. But, he said, tribunals "will be astute to ensure that the provisions of the Regulations are not evaded by devices such as service companies, or by complicated group structures which conceal the true position". Thus, it may well be possible to say, in any given case, that if the person always and only worked on Y's business, "then X was employing him on behalf of and as agent for Y" (our emphasis). Alternatively, there may be circumstances in which X might be regarded as a party to the transfer, even if not expressly named in the contract of sale (this is analogous to the Sunley Turriff situation). Or, on the other hand, it may be that the employee remained employed by X, who had other work for him or her to do.

Morison J then considered a situation in which some of X's employees worked partly for X and partly for other parts of the group. Here, it seemed to the EAT almost certain that X's employees would be transferred with X itself. It nevertheless recognised that there may be cases where one could say that despite being employed by X they were in reality assigned to the business of another part of the group: "This simply recognises that the contract of employment test is not the only matter for consideration. In other words, an employee might be employed by one company but be assigned to the business of another". Again, tribunals will, he said, keep in mind the purpose of the Regulations and the Directive "and the need to avoid complicated corporate structures from getting in the way of a result which gives effect to that purpose".

"... the only decisive criterion regarding the transfer of employees' rights and obligations is whether or not a transfer takes place of the department to which they were assigned and which formed the organisational framework within which their employment relationship took effect."

(from the ECJ's ruling in Botzen and others v Rotterdamsche Droogdok Maatshappij BV)

"Assignment" to the part transferred

As the above cases indicate, in order to be protected under reg. 5 employees must not only be employed by the transferor, but must be so employed in the undertaking or part which is transferred.

According to the ECJ's ruling in Botzen and others v Rotterdamsche Droogdok Maatshappij BV, this is to be determined by asking whether there is a transfer of the part of the undertaking to which employees "were assigned and which formed the organisational framework within which their employment relationship took effect". An employment relationship is, said the Court, "essentially characterised by the link existing between the employee and the part of the undertaking or business to which he or she is assigned to carry out his or her duties." Thus in deciding whether the Directive, and therefore reg. 5, applies to a particular employee "it is sufficient to establish to which part of the undertaking or business the employee was assigned". In Botzen, the Court was concerned with the fate of employees employed in certain general departments of an undertaking - including personnel, portering services, general maintenance and administration - which were not themselves transferred. It concluded that such employees would not be transferred even if they performed duties involving the use of assets assigned to the part transferred, or carried out duties for the benefit of that part.

The meaning of "assignment" was further considered by Advocate-General Slynn in his advisory opinion in the same case. He suggested that it would cover those employees who during their working hours are in fact "wholly engaged" in the part transferred, subject to the performance of other duties "to an extent which could fairly be described as de minimis". This, however, is probably too rigorous a standard, and does not reflect the flexibility inherent in the ECJ's own formulation. Indeed, in an early domestic decision which predated Botzen, an industrial tribunal held that reg. 5(1) applied to transfer the employment contract of an employee who spent some 80% of his time working in the part transferred (Anderson v Kluwer Publishing Ltd and another). More recently, in Governors of Higham Park School v Odger and others, the EAT adopted the ECJ's "organisational framework" test, and upheld a tribunal's conclusion that the employment of a council-employed school cleaner - who spent only 60% of her time on cleaning duties at a particular school, and the remainder on supervisory duties, some of which were performed away from the school in question - was transferred by virtue of the Directive when the school left local authority control and acquired grant-maintained status. The school was part of the undertaking of the council, and the cleaner was primarily employed by the council to clean the school buildings transferred.

Part of the "human stock"?

In Gale v Northern General Hospital NHS Trust, the Court of Appeal addressed the question of assignment by asking whether a student nurse employed under a contract of employment with Sheffield health authority was part of the "human stock" or resources of the Northern General Hospital ("the hospital") at the time it transferred to NHS trust status. Giving the judgment of the Court, Sir Thomas Bingham concluded that the answer was "no". The employee in question was undergoing "a course of training, part of it academic, and part based on experience. At the time of the transfer he was stationed at the hospital for the purposes of continued experience ... but he still had various weeks of experience to complete and those were weeks that he could be required to complete anywhere." It was quite clear from his contract that he was subject to the direction and control of the Sheffield school of nursing, which was part of the authority. It remained a matter for that authority how and where the employee should work for the remainder of the contract: "he was not ... part of the human stock belonging to the [hospital], but was somebody who was at the behest of the authority completing his training there." He was not a member in any real sense of what could be regarded as the "permanent staff" of the hospital.

Contract terms not decisive

The reformulation of the Botzen test proposed in Gale has been referred to with apparent approval in subsequent cases, including Duncan Web (see above). One issue which arises, however, is the importance to be attached to the terms of the employment contract in determining an employee's assignment and, in particular, the impact of broad job descriptions and express or implied mobility clauses. Gale itself might seem to indicate that the mere existence of such clauses will militate against a finding of assignment to a particular part of an undertaking. But it now seems clear that this will not generally be the case.

In Securicor Guarding Ltd v Fraser Security Services Ltd and others, for example, the EAT held that two security guards employed by Securicor were "assigned" to a geographical site covered by a contract for the provision of security services with a particular client ("Datamatic"). It was true that had Securicor exercised its right (contained in an express mobility clause in the employees' contracts of employment) to relocate them on or before the date on which a new contractor took over responsibility for the provision of the relevant guarding services, they would not of been so assigned. That right was not, however, exercised. Distinguishing Gale on its facts, the EAT said that the guards were the "human stock" at the Datamatic site when Securicor held the guarding contract. This might not have been the case had they been "casuals" filling in from time to time at the site. But they were "static guards, assigned solely to that site unless and until transferred to another site or sites." The fact that one of them performed additional overtime duties elsewhere was immaterial. Furthermore, the EAT observed that the "kernel" of the decision in Botzen is that an employment relationship is essentially characterised by the link between the employee and the part of the undertaking or business to which he is assigned to carry out his or her duties. And in Securicor Guarding, the employees had carried out their duties at the Datamatic site, and not more broadly at one or more of Securicor's branch offices.

The weight to be attributed to the terms of the contract will consequently vary from case to case, depending on the facts and circumstances. Thus in Michael Peters , the industrial tribunal had not considered Botzen, and the EAT held that it had therefore been mistaken in concluding that not only was Mr Farnfield employed by the transferor, but that he was assigned to the part of the undertaking transferred. He was employed under his contract as chief executive for the whole of the Group, and not just the four companies transferred. By contrast, in Sunley Turriff, the EAT said that the tribunal was entitled to find that Mr Thomson was employed in the part transferred. Even on a "narrow" view of the Botzen test, the evidence indicated that he was in fact employed "exclusively or almost exclusively" in connection with the part transferred, notwithstanding his contractual employment by the parent company (LC) to work for the group as a whole.

Indeed, it seems that in certain cases the existence of an express or implied flexibility clause may support a finding that an employee has been assigned to a part of the undertaking other than that indicated by his or her job description. For example, in Moran and another v Kloezeman, the EAT held that an employee who was employed under his employment contract as the company secretary of a company which carried on the business of managing pubs was also employed as the manager of a particular pub, and was assigned to that part of the undertaking. It was clear from the employee's contract that he could be required by the company to discharge other duties from time to time, and he had in fact discharged (and was paid for performing) the duties of pub manager in the six months preceding its sale. According to Mr Justice Mummery, "there is nothing in law to prevent an employee from having a written agreement for employment, which may govern some of his duties, and having an oral agreement, or an agreement implied from conduct, relating to the enlargement of his duties, so that he is employed in another additional capacity."

Other relevant factors

Recognising that the question of assignment is essentially one of fact for tribunals, the EAT in Duncan Web declined to give appellate "guidance" on this issue, but accepted that in applying the Botzen test a number of factors may need to be considered, including:

In Duncan Web, the EAT considered these and other factors and held that three employees who had some responsibilities for other companies in a corporate group were nevertheless assigned to the company which employed them under their contracts of employment at the time of its transfer. The employees were primarily located at the transferor's premises, and predominantly on its business, immediately before the transfer (for example, two of the applicants had always spent at least 80% of their time on the transferor's business, and all of them worked solely for the transferor after the receivers were appointed). By reason of the transfer their contracts of employment would, but for the Regulations, have come to an end "because [the transferor] would have ceased to carry on the business in which they were employed and they would have neither a job to do nor an employer to employ them". If, on the other hand, despite being employed by transferor they had been employed solely or predominantly to do the business of other companies in the group, the situation might have been different. But it would take some "persuasive evidence" to suggest that an employee was not assigned to the business of his or her employer, where the whole of that business was transferred. Such evidence would have to show, at the very least, "that the bulk of the employee's time and responsibilities were devoted to other entities within the group".

And in Buchanan-Smith v Schleicher & Co International Ltd, the EAT held that a sales executive with a company which had both a sales and a service and maintenance side was employed in the latter part of the business when it alone was transferred. The employee did some work in the sales side of the business, but organised and ran the service side. The EAT said that whether the organisation and running of the service side meant that she was assigned or allocated to that part of the business depended on all the facts of the case, including the factors identified in Duncan Web.

As that case illustrated, an employee may in fact be regarded as assigned to an employer's business, even though that employee spends time looking after another business, even the business of someone other than the employer. In the case of one employer carrying on two businesses, an employee may be assigned only to one of them, even though she is engaged in the activities of the other. There was nothing in the earlier decisions of the EAT or in Botzen to the effect that a person can only be regarded as employed in an undertaking, or part thereof, if she works exclusively therein.

Employment immediately before transfer

Regulation 5(3) provides that the automatic transfer principle applies only to those persons employed immediately before the transfer, or immediately before any one of a series of transactions by which a transfer is effected. The interpretation of this requirement has been the subject of much judicial debate. Early cases on the Regulations indicated that there was some leeway, and that reg. 5(3) would be satisfied if an employee was employed at a point which was "sufficiently proximate" to the transfer. In this way, it appeared that gaps of a few days between an employee's dismissal and the transfer could be overlooked (especially where dismissals took place on a Friday, and the transfer on the following Monday - see, for example, the EAT decisions in Apex Leisure Hire v Barratt and Bullard and another v Marchant and another).

This approach was forcefully rejected by the Court of Appeal in Secretary of State for Employment v Spence and others. Lord Justice Balcombe noted that reg. 5(1) presupposes a contract of employment which is subsisting at the moment of transfer, and that even if article 3(1) of the EC Directive - which refers to the transfer of contracts of employment or employment relationships existing "on the date" of the transfer - "allows an element of more than a moment of time before the transfer, it is only to the extent of the date of the transfer ...". The Court consequently applied a strict literal construction to reg. 5(3), and concluded that employees who were dismissed at 11 am on the day of a transfer (the completion of which took place only three hours later) were not employed in the moment immediately before the transfer.

European requirements

The interpretation of reg. 5(3) laid down in Spence is now accepted as established law where an employee's employment is terminated before the moment of transfer, and for a reason which is unconnected with the transfer (see the House of Lords' decision in Litster and others v Forth Dry Dock & Engineering Co Ltd). This broadly reflects the terms of the ECJ's ruling in P Bork International A/S Foreningen af Arbejdsledere i Danmark, which accepts that the only employees who may invoke the Directive "are those who have current employment relations or a contract of employment with the transferor at the date of the transfer". (There remains room for debate about whether the domestic emphasis on the "moment" rather than the "date" of the transfer conflicts with the requirements of the Directive.)

But the court in Bork confirmed that this principle is subject to "the mandatory rules of the Directive concerning the protection of workers against dismissal by reason of the transfer". Briefly, article 4(1) of the Directive provides that the transfer shall not in itself constitute grounds for the dismissal of employees by either the transferor or transferee. But this provision does not stand in the way of "dismissals that may take place for economic, technical or organisational reasons entailing changes in the workforce" (article 4(2)). It follows, said the Court, that employees whose employment has been terminated with effect on a date before that of the transfer, in breach of article 4(1), "must be considered as still employed by the undertaking on the date of the transfer with the consequence, in particular, that the obligations of an employer towards them are fully transferred from the transferor to the transferee, in accordance with article 3(1) of the Directive."

The Litster principle

The House of Lords grappled with the problem of how to interpret the Regulations in order to give best effect to Bork in its seminal decision in Litster. The case itself involved a situation in which employees had been dismissed one hour before the transfer of the undertaking in which they worked, in what their Lordships clearly believed was a "collusive" attempt to avoid the application of the Regulations.

Regulation 8(1), which purports to implement article 4(1) of the Directive, provides that, for unfair dismissal purposes, the dismissal of an employee is deemed to be automatically unfair if the transfer, or a reason connected with the transfer, is the reason or principal reason for dismissal. This principle does not, however, apply where the dismissal is for an "economic, technical or organisational reason entailing changes in the workforce of either the transferor or transferee" (reg. 8(2) - "ETO reasons").

According to Lord Oliver, reg. 8(1) is merely a different way of saying that the transfer is not "to constitute a ground" for dismissal as contemplated by article 4(1) of the Directive, "and there is no good reason for denying to it the same effect as that attributed to that article". And, in the opinion of Lord Keith, this involves implying into reg. 5(3) words indicating that where a person has been unfairly dismissed in the circumstances described in reg. 8(1) he or she is "to be deemed to have been employed in the undertaking immediately before the transfer or any of a series of transactions whereby it was effected". Regulation 5(3) must therefore be construed on the footing that it applies to a person employed immediately before the transfer "or who would have been so employed if he [or she] had not been unfairly dismissed before the transfer for a reason connected with the transfer." (our emphasis).

In these circumstances, "the employment is statutorily continued with the transferee by virtue of the Regulations" (per Lord Oliver). It follows that, whether or not the dismissals are the result of a collusive bargain, unfair dismissal liability and other accrued and outstanding rights, obligations and liabilities of the transferor will pass automatically to the transferee. But if it is shown that a pre-transfer dismissal was for an ETO reason within the meaning of reg. 8(2), the prevailing view is that the dismissal is removed from the ambit of reg. 8(1) and liability remains with the transferor. For this reason, their Lordships in Litster said that Spence was decided correctly on its own facts. It was either a case in which the dismissals were not connected with the transfer, or there was an ETO reason for redundancies based on the problems experienced by the receivers in renegotiating contracts with the transferor's principal customer. (The issues of which employees qualify to claim unfair dismissal under reg. 8(1), when dismissals are connected with a transfer, and the nature of ETO reasons are fully considered in the final part of this series.)

The net result of the authorities on reg. 5(3) means that the following reasoning must be applied to determine whether an employee was employed in the undertaking (or part thereof) transferred immediately before the transfer:

Moment of transfer

In cases to which Spence applies it remains crucial to determine the exact moment of transfer, or the moment before any one of a series of transactions effecting a transfer (reg. 3(4) - see of part two ).

Where there is a simple sale of an undertaking, the moment of transfer will in most cases occur on completion and not at the point at which a contract for sale is agreed (Wheeler v Patel and J Golding Group of Companies).

On the other hand, it is now clear that a transfer takes place where there is a change in the natural or legal person responsible for running or "actually doing the work" of carrying on the business. It follows that there may be a de facto transfer of an undertaking without legal formalities (see, for example, Dabell v Vale Industrial Services (Nottingham) Ltd and others - considered in Transfer of undertakings 2: relevant transfers). In Mohammed v Delaney, the contract for the sale of a shop provided for completion some two months hence. The EAT held, however, that there had been a de facto transfer by mutual agreement on the day before the contract for sale was agreed, whereby the transferee took over the day-to-day running of the business pending the outcome of final negotiations. Similarly, in Moran v Kloezeman, the EAT said that the transferee had taken over de facto responsibility for running a pub on the same date as the contract for sale was agreed, some six months before the formal completion of the deal.

And where a single transfer is effected in discrete stages or phases, for example, by the termination of a transferor's lease, or licence, or a contract to provide services, and the grant of a further lease, or licence, or contract to provide the same or similar services, to the transferee, it will be pertinent to ask whether an employee was employed immediately before the first of those transactions. Thus, in Gaines v Picturedrome Theatres Ltd and another, the EAT remitted to the tribunal the question of whether an employee had been employed immediately before the termination by the landlord of the alleged transferor's lease on cinema premises (see also Transfer of undertakings 2: relevant transfers).

Note: Regulation 4 of the Regulations makes special provision in relation to the insolvency practice of "hiving down" undertakings to facilitate sales. This involves the transfer of the business of an insolvent company to a wholly owned subsidiary, whilst the employees are retained in the employment of the insolvent parent. In theory, reg. 4 provides that employees are not transferred to the subsidiary unless they are employed by the parent immediately before the ultimate transfer or disposition (including, in this exceptional case, a disposition by way of share transfer) of the subsidiary. This allows the business to be sold on free of the employees if they are dismissed at any time prior to that point. It is at least arguable that this conflicts directly with the principle laid down in Litster, and is no longer a practical option.

"It can hardly have been contemplated that, where the only reason for determination of the employment is the transfer of the undertaking or the relevant part of it, the parties to the transfer would be at liberty to avoid the manifest purpose of the Directive by the simple expedient of wrongfully dismissing the workforce a few minutes before the completion of the transfer."

(per Lord Oliver in Litster and others v Forth Dry Dock & Engineering Co Ltd)

Contracts otherwise terminated by transfer

Regulation 5(1) applies to contracts which would "otherwise have been terminated by the transfer". Technically, any attempt to transfer an employee without his or her consent amounts to a repudiatory breach of the contract of employment, which must be accepted by the employee in order to bring the contract to an end. In this sense, it may be argued that the transfer itself does not terminate the contract. This would obviously severely restrict the operation of the Regulations, and courts and tribunals have accordingly taken a pragmatic approach to the meaning of those particular words.

In Litster, Lord Oliver observed that because the relationship between employer and employee is of an "essentially personal nature", the employer's repudiation "severs the factual relationship resulting from the contract, since the primary obligations on both sides are no longer capable of being performed". The necessary presumption in reg. 5(1) is that the contract of employment which is referred to is one which, "apart from the transfer, would have continued in force and that what 'terminates' it, or would, apart from the regulation, have terminated it, is the repudiatory breach constituted by the transfer. That paragraph can, therefore, operate only on a subsisting contract".

The crucial question is, Lord Oliver continued, what is meant by the reference to a contract being terminated "by" a transfer. "This could embrace a number of different possibilities. If nothing at all occurs to disturb the relationship of master and servant apart from the simple and unannounced fact of the transfer of business by the employer, it is the transfer itself which constitutes the repudiatory breach which, apart from reg. 5(1), 'terminates' the contract. If, however, the employer contemporaneously with the transfer, announces to his workforce that he is transferring the business and that they are therefore dismissed without notice, it is, strictly, the oral notification which terminates the contract; yet it could not, as a matter of common sense, be denied that the contract has been 'terminated by the transfer' ... Similarly, if the employer, a week, or it may be a day, before the actual transfer, hands to each employee a letter announcing that he is proposing to transfer his undertaking at the close of business on the transfer date, at which time the employees are to consider themselves as forthwith dismissed, it could hardly be contended under the Regulations that their employment had not been terminated by the transfer, even though, at the date of the notice, the dismissal might be capable of taking effect independently, in the event, for instance, of the actual transfer of the business being postponed to a date or time later than the expiry of the notice. In each hypothetical case the employer's repudiation of the contract of service is differently communicated but its essential quality of a repudiation by the transfer of the undertaking remains the same and the contract can quite properly be described as having been terminated by the transfer."

Thus a contract of employment which subsists at the point of transfer will invariably pass to the transferee, even if it is technically terminated by the transferor. Indeed, in Spence, the Court of Appeal specifically approved the view of the industrial tribunal in Batchelor v Premier Motors that "so long as the employee is in the employment of the transferor at the time of completion there is an automatic transfer of his [or her] contract of employment." If this were not so, the Regulations would be evaded every time a transferor gives its employees notice of dismissal which expires at the time of the transfer (even where, for example, notice of redundancy is given on the mistaken assumption that the Regulations do not apply to the case), and could exclude employees working under fixed-term contracts which expire at the same moment as the transfer.

Employees retained by transferor

There nevertheless remain a number of circumstances in which a transfer may not bring about the termination of an employment contract. For example, if an employer exercises a contractual power (express or implied) to direct an employee to work elsewhere in the retained part of its undertaking, or the employee agrees to a variation of contract providing for such relocation, in advance of the transfer there may well be no repudiation of the contract. More difficult is the situation in which an employee is apparently retained by the transferor to help with the running down of the business transferred and/or the administration and mechanics of the transfer transaction.

For example, in Direct Radiators Ltd v Howse and Shepherd, Mrs Howse was retained by the transferor (Mr Shepherd) for some five weeks after the transfer to help him with clerical and book-keeping work in relation to the collection of his outstanding debts. When she was dismissed at the end of this period, she sought a redundancy payment from the transferee (Direct Radiators). An industrial tribunal upheld her claim, and concluded that liability had passed to the transferee under reg. 5(1). Allowing the company's appeal, however, the EAT said that the crucial question was whether Mrs Howse had agreed to work for Mr Shepherd under the same, or a consensually varied, contract of employment in the period following the transfer. If she was working on this basis, the redundancy liability would remain with Mr Shepherd because her contract was not one which would otherwise have been terminated by the transfer. The EAT remitted the case to the tribunal for it to determine whether Mrs Howse had in fact worked during the relevant period under an employment contract, or whether there had been merely an "ad hoc engagement under a contract for services".

Similarly, in A & G Tuck Ltd v Bartlett and another, Mr Bartlett was employed as production manager by A & G Tuck (Slough) Ltd ("Slough"). He also acted as production manager of an associated company while remaining employed by Slough. On 10 August 1992, Mr Bartlett returned from holiday to discover that Slough had been sold to A & G Tuck Ltd ("Tuck"). He was instructed by the proprietor of Slough to give the owner of Tuck "every assistance" in the running of the new business over the next two weeks. Mr Bartlett's name did not appear on a schedule of transferred employees. On 12 August he was invited to become the production manager at Tuck and on 24 August - with the encouragement of Slough's former proprietor - he took up employment with Tuck. In the course of his subsequent unfair dismissal complaint against Tuck, the EAT observed that Mr Bartlett was not in a position where his contract of employment "would otherwise have been terminated by the transfer", and consequently he could not gain the benefit of a statutory novation of his contract of employment under reg. 5(1) of the Regulations.

The A & G Tuck decision is problematic, not least because it assumes that Mr Bartlett remained employed by Slough during the relevant period, notwithstanding the mandatory effect of the automatic transfer principle in reg. 5. Other cases have recognised this problem, and indicate that the mere fact that an employee continues to work for the transferor will in itself be insufficient to preclude the application of the Regulations.

In Visionhire Consumer Electronics Ltd t/a Visionhire v Easton, Mr Easton was given notice of dismissal by the transferor which expired one week after the transfer of the television and video rental and repair business in which he worked. Just before the expiry of his notice period, he was offered employment by the transferee, and began work with that company at the beginning of the following week. The EAT rejected the transferee's argument that because Mr Easton had been retained by the transferor after the transfer his contract was not one which was otherwise terminated by the transfer. This view would, it said, "cause immense difficulty as a matter of practice in industry and lead to grave disadvantages for the workforce". In the EAT's opinion, reg. 5 says that a relevant transfer does not bring the contract to an end, but simply acts as a statutory novation: "It does that automatically. If it is intended to retain part of the staff after a transfer then that would have to be done by a novation [or consensual variation] of contract between the transferor and the employee before the transfer." (Our emphasis.)

This approach is reflected in the EAT's decision in Sunley Turriff Holdings . When the Lilley Construction Group of companies went into receivership, Mr Thomson, continued to work for the parent company (primarily assisting the receivers) for almost two months after the relevant transfer of the part of the undertaking to which he was assigned. In the EAT's view, if a transfer takes place but an employee continues to work for the transferor thereafter, "in principle, that must have come about through a new agreement, or at least a variation of the previous agreement, between the transferor and the employee". Such an agreement might take several forms. It might be agreed that the employee should not be treated as a employee of the undertaking or part transferred; or it might be agreed that the employee's employment with the undertaking transferred should be treated as having come to an end and a new employment, with the transferor, should be taken to have commenced. The end of the employment with the transferred undertaking might have come about by dismissal, resignation or consensual termination, but the effect would, for present purposes, be the same.

What is not acceptable under reg. 5, said the EAT, "is that the employment of the employee with the transferor should simply have continued, unaffected by the transfer, without some new agreement." In the present case, there had been no actual resignation by Mr Thomson and no actual dismissal by the transferee. There was no express agreement to continue to work for the transferor, and none could be inferred or implied from the surrounding circumstances. Mr Thomson was uncertain about his employment situation, and the receiver's view that his contract with the transferor (parent) company continued was mistaken because it did not take account of the application of the Regulations: "The Regulations are imperative in their terms and must apply whatever understandings or misunderstandings there may be."

Employee's right to object

In Katsikas v Konstantinidis, the ECJ confirmed that article 3(1) of the Directive allows an employee to remain in employment with a new employer on the same conditions as those agreed with the transferor. But, the Court said, it does not oblige employees to continue their employment relationship with the transferee. Such an obligation would "undermine the fundamental rights of the employee who must be free to choose his [or her] employer and cannot be obliged to work for an employer that he [or she] has not freely chosen." It follows that the Directive does not prevent an employee from objecting to the transfer of his or her contract of employment or employment relationship and, thus, from not benefiting from the protection provided by the Directive. At the same time, the Court held that where an employee exercises the right to object the Directive "does not oblige member states to provide that the contract of employment or employment relationship be continued with the transferor". In such circumstances, "it is for the member state to determine the fate of the contract of employment or of the employment relationship."

As a consequence, the Regulations were amended by the Trade Union Reform and Employment Rights Act 1993 to provide that reg. 5(1) and (2) will not operate to transfer an employee's contract of employment, and the rights, powers, duties and liabilities under or in connection with it, if the employee informs the transferor or the transferee that he or she objects to becoming employed by the transferee (reg. 5(4A)); and where an employee so objects, the transfer of the undertaking or part in which he or she is employed shall operate so as to terminate his or her contract of employment with the transferor, but he shall not be treated, for any purpose, as having been dismissed by the transferor (reg. 5(4B)).

The proper interpretation of these provisions was considered by the Scottish EAT in Hay v George Hanson (Building Contractors) Ltd. Lord Johnston admitted that their drafting "leaves much to be desired". Taken in a general context, the word "object" could, he said, reflect a state of mind short of refusal, and it goes without saying that there are all manner of means whereby information may be conveyed to the intended recipient. Furthermore, the provisions are silent as to the timing of the objection; nor is there any requirement, which seems singularly unfortunate, that the employee intending to object should be informed of the consequences by the transferor, "given the draconian nature of the result that reg. 5(4B) achieves."

Having said that, the EAT felt that scheme of the legislation is clear: "What is intended is to protect the right of an employee not to be transferred to another employer against his will, and it is 'against his will' that is the executive part of the process. We, therefore, construe the word 'object' as effectively meaning a refusal to accept the transfer, and ... that state of mind must be conveyed to either the transferor or transferee. But we do not consider it necessary to lay down any particular method whereby such a conveyance could be effected ... . it could be either by word or deed, or both, and each case must be looked at on its own facts to determine whether there was sufficient state of mind to amount to a refusal on the part of the employee to consent to the transfer, and that that state of mind was in fact brought to the attention of either the transferor or the transferee. Furthermore, it must be brought to their attention before the date of the transfer because, under reg. 5(4B), the transfer itself automatically terminates the contract. Accordingly, if the terms of reg. 5(4A) are not satisfied in fact, there is an automatic transfer on the appropriate date."

In Lord Johnston's view, it should not be difficult in most cases to distinguish between the withholding of consent and mere expressions of concern or unwillingness, which may still be consistent with accepting the inevitability of a transfer. Thus, to protest in advance of a transfer, which could be construed to be objecting, will not amount to an objection unless it is translated into an actual refusal to consent to the transfer which, in turn, is communicated to the relevant person or persons, before the transfer takes place. And evidence of matters which occurred after the transfer may cast light upon the employee's state of mind and, indeed, the knowledge of the employer as to his state of mind, prior to the relevant date.

On the facts of Hay, however, the EAT upheld a tribunal's conclusion that taken as a whole the employee's "expressed views and actions" were an effective objection to the transfer. He had taken all possible steps within his capacity to resist the transfer, including applying for alternative employment with the transferor. He had failed to rebut the transferee's repeated assertion that he objected to the transfer, and had later sought to negotiate special terms and conditions for his "transfer" to the transferee.

Note: There is an important distinction between objecting to the mere fact of the transfer for the purposes of reg. 5(4A), and objecting to a transfer because the transferee is offering different or less favourable terms and conditions of employment. Thus, reg. 5(5) expressly preserves the employee's right to terminate his or her contract of employment without notice if a substantial change is made to his or her working conditions to his or her detriment, or if the change in the identity of the employer "is a significant change and is to [the employee's] detriment". In these circumstances the employee will be treated as constructively dismissed by the transferee. (This provision is discussed in detail the final part of this series.)

Knowledge of transfer

It is established law that the automatic transfer principle, in the absence of effective objection by the employee, operates irrespective of whether the parties consent to the transfer (see the ECJ's ruling in Berg and Busschers v Besselsen).

The ruling in Katsikas and the consequent enactment of reg. 5(4A) have, however, supported the development of a further judicial gloss on the application of reg. 5(1). In Photostatic Copiers (Southern) Ltd v Okuda and Japan Office Equipment Ltd, the EAT held that reg. 5(1) does not operate to transfer an employee's contract of employment "unless and until the employee is given notice of (i) the fact of the transfer and (ii) the identity of the transferee". His Honour Judge Peppitt said that this requirement applied both before and after the 1993 amendments, but was now crucial "for without such knowledge the employee would be unable to exercise his [or her] right to object to becoming employed by the transferee".

A number of problems arise from this decision. Most disturbing is the possibility that employers may be able to evade the application of the Regulations by the simple expedient of ensuring that their employees are not given the requisite information. This would clearly run counter to the mandatory nature of the protection provided by the Regulations and the Directive, and we would submit that it cannot have been the ECJ's intention in Katsikas to create conditions which potentially undermine employees' rights in such a fundamental manner.

Rights and duties transferred

We now turn to consider what is transferred under the automatic transfer principle contained in reg. 5. Regulation 5(2) provides that on the completion of a relevant transfer -

The Regulations also contain special provisions providing for the transfer of collective agreements made between a transferor and a recognised trade union (reg. 6) and of union recognition itself (reg. 9). These are discussed in part four of this series.

There are two types of obligation or liability which are expressly excluded from transfer under reg. 5(2):

It is clear that reg. 5(2)(a) operates to transfer all of an employee's existing contractual terms and conditions of employment (whether express or implied) to the transferee, including pay, status, holidays and sickness entitlements, together with any accrued liabilities under or connected with that contract (for example, liability for breach of contract occurring prior to the transfer). The provision also operates to transfer statutory employment protection rights connected with the contract or dependent on the individual's status as an "employee" (including liabilities in respect of unfair dismissal, redundancy payments, sex and race discrimination, equal pay and maternity rights, protection against unlawful deductions from wages, and, arguably, statutory continuity of employment for any of these purposes - on this latter point see below).

Regulation 5(2)(b) reinforces the breadth of the provision by providing for the transfer of responsibility for anything done by the transferor in advance of the transfer, whether or not it is done in relation to the employee's contract of employment. The words "or a person employed in that undertaking or part" can clearly "have the effect of transferring obligations other than contractual obligations; for example ... they may well embrace obligations arising in tort" (per Lord Justice Balcombe in Spence - and see p.12). Moreover, they reflect the reference in article 3 of the Directive to "an employment relationship existing on the date of the transfer", which has a more extended meaning than obligations arising from "a contract of employment" (DJM International Ltd v Nicholas).

In DJM v Nicholas, the EAT held that the transferee of an undertaking was responsible for an act of sex discrimination by the transferor against the applicant employee - namely, requiring her to retire at age 60 - notwithstanding that this occurred under an earlier contract of employment between the transferor and the employee, and not the contract in existence at the time of the transfer. The crucial question under reg. 5(2)(b) is, said the EAT, not whether the act was done in respect of a particular contract, "but whether it was in respect of a particular person employed in the undertaking transferred".

Restrictive covenants

The Regulations mean that following a relevant transfer a contract of employment should take effect as if it had been made between the new proprietor of the undertaking and the employee, including any restrictive covenants contained therein (see McCall v Initial Supplies Ltd). The problem, however, is to determine the breadth of the restraint so transferred, and therefore its enforceability.

In McCall, for example, the Court of Session refused to grant an interim interdict (injunction) to the transferee company in respect of a restraint in Mr McCall's contract. It was, said Lord Coulsfield, "far from obvious that it follows that the name of the new proprietor of the undertaking can be substituted for that of the former employer in every respect. It seems to me that there may be many situations in which the effect of such substitution would be to make a radical alteration in the rights and obligations of the parties." In particular, the practical scope and effect of a restrictive covenant might be altered if regard had to be had to, for example, customers of the acquirer as well as those of the undertaking acquired.

More authoritative guidance on this point was provided by the Court of Appeal in Morris Angel & Son Ltd v Hollande and another. Mr Hollande was the group managing director of a company called Altolight Ltd. His service agreement contained a clause which provided that he would not, for a period of one year after ceasing to be employed by the company, seek to procure orders or do business with any person, firm or company who had done business with the Altolight group in the year preceding the cessation of employment. Altolight was subsequently purchased by Morris Angel & Son Ltd, who immediately sought to enforce the covenant contained in Mr Hollande's service agreement.

In interlocutory proceedings, successive High Court judges adopted the view that reg. 5(1) required the service agreement to be read as if it had originally been made between Mr Hollande and Morris Angel, rather than with Altolight. The restrictive covenant had therefore to read as an agreement by Mr Hollande not to deal with those who had done business with Morris Angel, as opposed to Altolight, in the previous year. Since he was only seeking to do business with former Altolight customers, the covenant could not be enforced by way of injunction.

Allowing an appeal, the Court of Appeal observed that the High Court's approach would turn the employee's obligation under the restrictive covenant "into quite a different and possibly much wider obligation" than that which bound him before the transfer. Such an obligation was not remotely in contemplation when the service agreement was entered into, and Lord Justice Dillon could see no reason why the Regulations "should have sought to change the burden on the employee". The more reasonable construction was that the words in reg. 5(1) - that "the transfer shall have effect after the transfer as if originally made" between the employee and the transferee - were to be read "as referring to the transferee as the owner of the undertaking transferred or in respect of the undertaking transferred". Morris Angel was thus deemed, as a result of the transfer, retrospectively to have been the owner of Altolight, and could therefore enforce the covenant against Mr Hollande in respect of the former Altolight customers to which it related.

Although this conclusion suited the transferee company in the particular case, it does mean that, in general, companies acquiring undertakings will need to consider the renegotiation of restrictive covenants with transferred employees. Since the effect of Morris Angel is to freeze the scope of any prohibition at the date of the transfer, transferees will otherwise be unprotected in relation to an employee's ongoing dealings with its own [existing or new] customers.

Share options, profit shares and bonuses

Regulation 5(2) is similarly capable of transferring any share option, profit share, bonus or analogous scheme contained in, or connected with, an employee's contract of employment. This arguably covers any scheme which an individual is entitled to join by virtue of his or her status as an employee of the transferor. In Chapman and Elkin v CPS Computer Group plc, however, the Court of Appeal appeared to rely at least partly on the fact that a share option scheme was contained in a "collateral" contract separate from the employees' contracts of employment in concluding that the Regulations did not apply to transfer the scheme. To this extent, the correctness of the decision must be doubted since it was clear that participation in the scheme depended upon the individual being employed by the CPS Group or any of its subsidiaries.

On the other hand, the terms of a scheme may themselves determine whether it can survive a transfer, or be enforced thereafter. In Chapman, for example, the true rationale of the decision is that the scheme did not transfer under the Regulations because the option-holders had ceased, in accordance with the terms of the scheme, to be employees in one of the specified companies by reason of redundancy within the meaning of s.139 of the Employment Rights Act 1996 (the ERA). This was one of the circumstances in which they were entitled to exercise their share options against the CPS group. And it seems that the courts will not imply terms into the rules of such schemes to the effect that a transferor will do nothing to cause options to lapse or to cease to be exercisable under the rules (for example, by selling the business or participating subsidiaries to a new employer - see Thompson v ASDA MFI Group plc).

Where such provisions do survive transfer, however, they clearly present problems because they will have been tailored specifically to the transferor's organisation, and the transferee may have no comparable provision in place. It is at least arguable that the transferee is obliged to make some equivalent provision, or to compensate employees for the loss of the right which they previously enjoyed.

Pensions

Regulations 5 and 6 (on the transfer of collective agreements) do not apply to transfer so much of a contract of employment or collective agreement as relates to an occupational pension scheme within the meaning of the Social Security Pensions Act 1975 or the Social Security Pensions (Northern Ireland) Order 1975 (reg. 7(1)(a)); or to any rights, powers, duties or liabilities under or in connection with any such contract or subsisting by virtue of any such agreement and relating to such a scheme or otherwise arising in connection with that person's employment and relating to such a scheme (reg. 7(1)(b)).

Note: For the purposes of paragraph (1) any provisions of an occupational pension scheme which do not relate to benefits for old age, invalidity or survivors shall be treated as not being part of the scheme (reg. 7(2)). This means, for example, that redundancy provisions contained in a pension scheme may transfer under reg. 5.

It now seems to be well established that these provisions largely conform to the requirements of the Directive (Adams and others v Lancashire County Council and another). The first part ("limb A") of article 3(3) of the Directive excludes employees' rights to old-age, invalidity or survivors' benefits under supplementary company or inter-company pension schemes outside the statutory social security schemes in member states from the automatic transfer principle contained in article 3(1). By virtue of the second "limb" ("limb B") of article 3(3), however, member states must adopt the measures necessary to protect the interests of employees, and of persons no longer employed in the transferor's business at the time of the transfer, in respect of rights conferring on them "immediate or prospective entitlement to old-age benefits", including survivors' benefits, under supplementary schemes such as those referred to in limb A.

In Adams, the High Court held that limb A of article 3(3) excludes all pension rights (past, present and future - that is, whether accrued at the time of transfer or related to periods of post-transfer employment) from the terms and conditions transferred to the transferee under article 3(1). Limb B of article 3(3), on the other hand, is a different type of provision. It is not concerned with the transfer of the transferor's rights and obligations, but is addressed directly to member states and imposes a duty on them to protect "accrued rights, and nothing else". Mr Justice Walker accepted that this interpretation of the Directive leaves a "serious gap" in the protection afforded to workers. But the language of the Directive compelled him to conclude that the Council of Ministers "must, for sufficient reasons, have recognised and accepted that gap". Taking that view, Walker J could see no inconsistency between the Directive and the exclusion of pension rights contained in reg. 7 of the Regulations.

This decision, which confirms the similar reasoning adopted previously by the EAT in Walden Engineering Co Ltd v Warrener, appears to lay to rest any doubt about the complete exclusion of pension rights from the ambit of the Regulations. There is therefore no room for the argument that the Regulations can in some way be read to require the transferee to make equivalent pension provision. Logically, it would also seem to preclude a finding that there is any express or implied obligation on the transferor to ensure that such provision is made. Nevertheless, the current guidance issued by the Department of Environment on the handling of pensions in relation to compulsory competitive tendering in local governments² states that "there is a risk that a failure on the part of the transferor to require a successful contractor to provide pensions after transfer which are broadly comparable before transfer, or otherwise compensate transferred employees, could give rise to successful claims of constructive dismissal against the transferor." As a result of this analysis, requirements in tender documents that contractors should provide comparable pension entitlements or other compensation will not in themselves be regarded as anti-competitive under the Local Government Act 1988. We understand that the DoE has decided not to revise this guidance in the light of Adams.

Continuity of employment

There is some dispute as to whether an employee's continuity of employment for the purpose of qualifying for statutory employment protection rights is itself transferred and preserved under the Regulations. In Green-Wheeler v Onyx (UK) Ltd, the EAT concluded that an employee's accrued continuity of employment with the transferor was transferred to the transferee under Litster principles (the employee having been dismissed prior to the transfer for a non-ETO reason connected with the transfer and re-employed by the transferee at the beginning of the following week), and enabled him to establish the necessary two years' service for the purposes of his unfair dismissal complaint against the transferee.

It therefore seems that continuity on the transfer of an undertaking may be transferred under the Regulations or under the specific continuity provisions contained in s.218(2) of the ERA (see part one of this series). But even where tribunals take the view that s.218(2) alone governs continuity for the purposes of claims under the ERA, they are taking an increasingly robust approach to its interpretation. In Macer v Abafast Ltd, for example, the EAT adopted a purposive approach to the meaning of the words employed "at the time of transfer" in s.218(2), in order to ensure that the intention of the legislation and the Regulations should not be defeated. It consequently held that continuity can be preserved under s.218(2) across a gap between an employee's dismissal and the completion of a transfer, provided that the gap relates "to the machinery of transfer".

And, in A & G Tuck v Bartlett, the EAT upheld the industrial tribunal's conclusion that Mr Bartlett's continuity of employment was nevertheless preserved under s.218(2). It made no difference that the gap had occurred after the transfer, and while Mr Bartlett was still apparently employed by the transferor.

Tortious liability

The suggestion in Spence that reg. 5(2(b) may operate to transfer civil liability in tort (see p.10), including liability in negligence or for breach of statutory duty in respect of injuries sustained by employees whilst working for the transferor, is confirmed by the decision in Wilson and others v West Cumbria Health Care NHS Trust (where a county court was interpreting similarly worded provisions in the National Health Service and Community Care Act 1990). It does not, however, cover a transferor's vicarious liability to third parties (for example, to customers, clients or other members of the public) for injuries which they have suffered as a result of the negligence (or other torts) of its employees. And any criminal liability for breaches of health and safety legislation will not transfer (reg. 5(4)).

Protective awards

Prior to the recent revision of the redundancy consultation arrangements, it had been held that potential liability for a protective award under s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 was not automatically transferred to the transferee under reg. 5 of the Transfer Regulations (Angus Jowett & Co (in liquidation) v NUTGW). The position is arguably different now that s.188 has been extended to require consultation with appropriate representatives of all employees (see Consultation on redundancies and business transfers for discussion of this issue).

No continuing liability

Where reg. 5 applies, all of the transferor's rights, duties, obligations, and liabilities transfer to the transferee. No residual obligation or liability remains with the transferor (Stirling District Council v Allan and others). Any apportionment of the costs incurred in relation to employment-related legal liabilities resulting from a relevant transfer will therefore be governed solely by any agreements or indemnities which may be negotiated between the parties to the transfer transaction (see Premier Motors v Total Oil). These cannot affect the rights of employees.

In the final part of this series, however, we move on to consider what latitude, if any, transferees have to seek to vary the terms and conditions of employment of employees transferred under reg. 5.

The automatic transfer principle - main points to note

IRLB guide to the transfer of undertakings

Part 1 : Scope and fundamental purposes of the Business Transfers Directive and the Transfer Regulations, covering: the common law position in the UK and the pre-eminence of EC law as an aid to the interpretation of the Regulations; and tracing the development of the ECJ's thinking on the question of what constitutes a transfer of an undertaking or business.

Part 2 : Transfers under the Regulations, including: the application of EC law; the modern "employment"-orientated approach based on whether an undertaking "retains its identity"; and examples of the types of undertakings and transfer transactions consequently covered by the Regulations.

Part 3 : The automatic transfer principle, comprising: the employees covered by the Regulations; the rights, obligations, duties and liabilities transferred; and the employee's right to object to transfer.

Part 4 : Unfair dismissal protection in the context of transfers, information and consultation provisions; and the possible revision of the Directive.

¹SI 1981/1794.

²Department of Environment guidance issued 15.3.95.

CASE LIST

A & G Tuck Ltd v Bartlett and another [1994] IRLR 162

Adams and others v Lancashire County Council and another [1996] IRLR 145

Anderson v Kluwer Publishing Ltd and another COIT 15068/85

Angus Jowett & Co (in liquidation) v NUTGW [1986] IRLR 326

Apex Leisure Hire v Barratt [1984] IRLR 224

Batchelor v Premier Motors (Romford) Ltd and another 19.11.82 COIT 1359/181

Berg and Busschers v Besselsen [1989] IRLR 447

Botzen and others v Rotterdamsche Droogdok Maatshappij BV [1986] 2 CMLR 50

Buchanan-Smith v Schleicher & Co International Ltd 17.1.96 EAT 1105/94

Bullard and another v Marchant and another [1986] ICR 389

Chapman and Elkin v CPS Computer Group plc [1987] IRLR 462

Construction Industry Training Board v Labour Force Ltd [1970] 3 All ER 220

Cowell v Quilter Goodison Co Ltd and QG Management Services Ltd [1989] IRLR 392

Dabell v Vale Industrial Services (Nottingham) Ltd and others [1988] IRLR 439

Direct Radiators Ltd v Howse and Shepherd 4.7.86 EAT 130/86

DJM International Ltd v Nicholas [1996] IRLR 76

Duncan Web Offset (Maidstone) Ltd v Cooper and others [1995] IRLR 633

Gaines v Picturedrome Theatres Ltd and another 4.12.95 EAT 661/95

Gale v Northern General Hospital NHS Trust [1994] IRLR 292

Governors of Higham Park School v Odger and others 1.3.94 EAT 519/93

Green-Wheeler v Onyx (UK) Ltd 30.7.92 EAT 925/92

Hay v George Hanson (Building Contractors) Ltd 28.2.96 EAT 821/95

Katsikas v Konstantinidis [1993] IRLR 179

Litster and others v Forth Dry Dock & Engineering Co Ltd [1989] IRLR 161

Macer v Abafast Ltd [1989] IRLR 137

McCall v Initial Supplies Ltd 2.5.90 Court of Session (Outer House)

McMeechan v Secretary of State for Employment [1995] IRLR 461

Michael Peters Ltd v (1) Farnfield (2) Michael Peters Group plc [1995] IRLR 190

Mikkelsen v Danmols Inventar A/S [1986] 1 CMLR 316

Mohammed v Delaney 17.12.86 EAT 606/86

Moran and another v Kloezeman 2.3.95 EAT 38/94 & 969/93

Morris Angel & Son Ltd v Hollande and another [1993] IRLR 169

P Bork International A/S Foreningen af Arbejdsledere i Danmark [1989] IRLR 41

Photostatic Copiers (Southern) Ltd v Okuda and Japan Office Equipment Ltd [1995] IRLR 11

Premier Motors (Medway) Ltd v Total Oil Great Britain Ltd [1983] IRLR 471

Secretary of State for Employment v Spence and others [1986] IRLR 248

Securicor Guarding Ltd v Fraser Security Services Ltd and others 11.3.96 EAT 350/95

Stirling District Council v Allan and others [1995] IRLR 301

Sunley Turriff Holdings Ltd v Thomson [1995] IRLR 184

Thompson v ASDA MFI Group plc [1988] IRLR 340

Visionhire Consumer Electronics Ltd t/a Visionhire v Easton 27.7.87 EAT 20/87

Walden Engineering Co Ltd v Warrener [1993] IRLR 420

Wheeler v Patel and J Golding Group of Companies [1987] IRLR 211

Wilson and others v West Cumbria Health Care NHS Trust 3.8.94 County Court