Employment transfers without TUPE

17 April 2012

In an unusual case, Gabriel v Peninsula Business Services, the Employment Appeal Tribunal (EAT) has held that, in the absence of TUPE, the employment of an employee cannot be transferred from one employer to another without the employee’s consent.

Gabriel was employed by Peninsula as a Marketing Consultant. Peninsula then purchased, via a share acquisition, a company which became known as “Taxwise Services Limited”.

Sometime after this, Peninsula sent an email stating that the trade and assets of Peninsula’s “Taxwise” business were transferring to the new acquisition. Ms Gabriel did not get the email and was not aware that her employer had, allegedly, changed.

Before the Employment Tribunal an issue arose as to the identity of Ms Gabriel’s employer. Importantly, Peninsula did not claim the Transfer of Undertakings (Protection of Employment) Regulations 2006 applied, which would, if applicable, have automatically transferred Gabriel’s employment to Taxwise Services Limited. As Peninsula did not argue that TUPE applied, the Tribunal had to decide whether or not a unilateral transfer by the Employer could take place without the help of the regulations.

The EAT, who disagreed with the Employment Tribunal on this issue, looked back to a 72 year old case called Nokes v Doncaster Amalgamated Collieries (1940), which said that (and remember this was well before TUPE or the European Union Law from where it comes was a glint in anyone’s eye) the employment of an employee cannot be transferred from one employer to another without his or her consent. On that basis, Peninsula remained the employer throughout.

The important point to take from this case is that an employer, where TUPE does not apply, cannot simply tell an employee that he or she is transferred and employed by someone else. This will be important particularly in intra-group transfers, where it may be beneficial for an employer to transfer the employment of one of its employees unilaterally. In the absence of the employee’s explicit consent (which may in some circumstances be contained in the employee’s employment contract) this cannot be done.

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