TUPE transfers: When an objection isn't an objection
Consultant editor Darren Newman dispels an often-held belief that the issue of which employees transfer in a TUPE situation can simply be decided by the transferor, or agreed between the parties.
Over the years, those of us closely involved with employment law have become accustomed to the sometimes exceedingly strange ways of the TUPE Regulations. In Capita Health Solutions v McLean and another [2008] IRLR 595, recently reported on XpertHR, the EAT held that an employee transferred under TUPE despite the fact that she apparently objected to being transferred. The EAT held that, because the employee had agreed to carry on after the transfer in the same role, she had not really objected at all. This was despite the fact that she had arranged with the BBC - her original employer - to remain employed by it and work with the transferee only on the basis that she was seconded to it for a limited time. The EAT held that, despite the agreement between the employee and the BBC, there was no secondment, and she was actually employed by the transferee from the date of the transfer onwards.
For me, the case illustrates a fundamental, and often misunderstood, point about the TUPE Regulations: the transfer of employment as a result of TUPE is automatic and happens by operation of law. Many employers fall into the trap of using "TUPE" as a verb, saying, for example, "we will be TUPEing across a number of employees". This implies that the transfer of employment requires some act on their part and not just the transfer of the business or activity concerned. It is often believed that the crucial document is the list of employees who are to be "TUPEd" that is given to the transferee. However, it is vital for a proper understanding of TUPE to appreciate that the question of who transfers is not something that can simply be decided by the transferor and then notified to the transferee. Neither can it be agreed on by the parties.
When there is a TUPE transfer, its effect is to transfer all those employees who are "assigned" to the group of resources (in the case of a standard transfer) or group of employees (in the case of a service provision change) immediately before the transfer. If someone falls into that group, when the transfer happens he or she becomes employed by the transferee - even if neither employer is aware of this. The only exception is where the employee makes a valid objection to becoming employed by the transferee. However, in those circumstances, the transfer simply terminates the employee's contract without any dismissal, so the right to object tends to be used sparingly.
But what happens if the employee remains with the transferor and continues to work and be paid? It is not unusual for an employee to be offered alternative work with the transferor rather than be transferred to the new employer. When that happens and everything works out, the correct legal analysis scarcely matters. The problem arises if it doesn't. Suppose the employee dislikes the new job, or circumstances change and the employer cannot carry on offering the alternative work. The situation could get very messy as, technically, the employee will have become employed by the transferee at the time of transfer - although this might come as a surprise to the parties concerned. The EAT in Capita clearly held that, even though the BBC continued to pay the employee in question, this did not alter the fact that she was no longer employed by it.
How a tribunal would deal with a situation where, for example, an employee turned up for work with the transferee some weeks after the transfer claiming to be employed by it remains to be seen. However, wise employers will be wary of making ad hoc arrangements to accommodate employees who do not want to be transferred. Where such an arrangement is made, the parties can best avoid TUPE by arranging an internal transfer of the employee some time before the transfer. That way, the employee will not be "assigned" to the undertaking or activity at the time of the transfer and will avoid being "TUPEd" across.
