Unison v Somerset County Council and others EAT/0043/09

transfer of undertakings | informing and consulting | affected employees

The Employment Appeal Tribunal (EAT) has considered who qualifies as “affected employees” who must be informed and consulted on a TUPE transfer through their employee representatives.

Somerset County Council and Taunton Deane Borough Council established a joint venture company South West One Ltd with IBM to which their resources directorates work would be transferred. The agreement between the councils and IBM that gave rise to the transfer, including a staffing agreement, was signed late in the day on Friday 28 September 2007, which was the last working day before the deadline of the end of September 2007 that had been set for the transfer to go ahead. Consultation had already taken place during the previous two years, with staff doing resources directorates work being given the choice to transfer to South West One Ltd or remain employed by the councils but be seconded. All but one of the 846 relevant employees decided to be seconded rather than transfer.

Certain aspects of the staffing agreement were contentious up until the last moment, particularly in relation to how future recruitment would be organised. The agreement provided that any vacancies would initially be advertised internally to all 846 employees. If a suitable recruit was not found, a second stage would take place where the vacancy would be advertised to other employees of the councils, before finally being advertised externally. There was a dispute over how this process would work and the final arrangements were agreed in a hurry.

The union Unison argued that proper consultation had not taken place because the employer had not consulted with the appropriate representatives of “affected employees” under reg.13(6) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE). The employment tribunal dismissed the union’s claim, accepting that the employers had a defence under reg.13(9), where there can be special circumstances in which it is not reasonably practicable to comply with the duty under reg.13(6).

While the EAT refused to interfere with the employment tribunal decision that the special circumstances defence had been established, it also looked more generally at who is an “affected employee” under TUPE. In particular, the EAT asked whether or not council employees outside the resources directorates who might apply for positions in the future under the second stage of the new recruitment process could be “affected employees”.

The EAT concluded that “affected employees” are those who will be or may be transferred or whose jobs are in jeopardy by reason of the proposed transfer, or who have job applications within the organisation pending at the time of transfer. The EAT did not think that the definition of “affected employees” extends to the whole of the workforce, nor to everyone in the workforce who might apply for a vacancy in the part transferred at some point in the future. If the wider definition was accepted, it would lead to the conclusion in many, if not most, cases that every employee of the organisation in question is potentially an “affected employee”. This would be a surprising conclusion.

Case transcript of Unison v Somerset County Council and others (Microsoft Word format, 91K) (on the EAT website)

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