The original TUPE Regulations 1981 implemented the Acquired Rights Directive 1977 and came into force over 37 years ago, providing for the automatic transfer of “employees” and many of their employment rights on the transfer of an undertaking. We then had the more recent TUPE Regulations 2006 which expanded the circumstances in which a relevant transfer would occur, together with various amendments to the legislation and much case law over the years.
However, for all this
time and quite surprisingly, we’ve never had a judgment on the scope of the
extended definition of “employee” in
TUPE which refers to any individual working under a contract of service or
apprenticeship “or otherwise”, but
excluding the genuinely self-employed.
That is until now in the case of Dewhurst
& Others v Revisecatch Ltd & City Sprint (UK) Ltd which focussed on
the words “or otherwise”.
An employment tribunal
started by referring to the most recent Acquired Rights Directive 2001 which defines
an employee as “any person who, in the
Member State concerned, is protected as an employee under national law” and
seeks to protect rights and obligations arising from an employment contract or “employment relationship”.
The tribunal then
referred to the Equality Act 2010 which includes those working under a “contract personally to do work” within its
definition of “employee”. It also referred to the extended definition of
“worker” in the Employment Rights Act
1996 (and similar definitions in legislation such as the Working Time
Regulations 1998) which includes those not working under a contract of
employment, but who are working under “any
other contract … whereby the individual undertakes to do or perform personally
any work or services for another party to the contract” other than where
genuinely self-employed. Previous case
law has held that these definitions which are slightly differently expressed actually
refer to the same type of extended employment status.
On the basis that liability
for discrimination or breaches of working time legislation should pass from a
transferor to a transferee under TUPE, the tribunal reasoned that the reference
to the extra words “or otherwise” in
the TUPE definition of “employee” had
to mean something. In its opinion, this
means that our “general employment law”
protects this extended class of workers as well as “employees” in the traditional
sense, both of whom must therefore fall within the scope of TUPE protection.
Employment lawyers have long-recognised this potential extension of the scope of TUPE. However, it is highly likely that this non-binding tribunal judgment will be appealed and so employers will probably wait for a definitive and legally binding judgment from the EAT before changing their general operational practices.
The contents of this article are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this article. © Mundays LLP.