The case

In this case the EAT considered whether TUPE could apply where a business was transferred from one company to several group companies, one of whom was the original employer.

Facts

Mr Layton was employed by Martlet Homes Limited (Martlet). As part of a restructure, the business in which he was employed transferred to all companies in the group, including Martlet. Mr Layton was offered a new contract which stated that he would be jointly and severally employed by all companies in the group. Mr Layton objected to the new terms and conditions which he had been offered, in particular the loss of a bonus, and he was given notice, and an offer of re-engagement on the terms in the joint contract of employment. He claimed that this dismissal was automatically unfair under TUPE.

The EAT decided that it was technically possible for TUPE to apply where a business transfers to several companies. However, in this case, because it was jointly and severally liable, Martlet remained his employer (albeit one of several employers), retaining liability for his employment. For TUPE to apply, there has to be a change in employer, and TUPE did not therefore apply to this situation.

What this means for employers

It's not surprising that there has to be a change of employer for TUPE to apply. It's interesting that there can, technically, be a transfer of a contract of employment to more than one employer. However, it is very unusual for a group of companies to take joint and several liability for contracts of employment. This is not therefore likely to come up very often. Without the joint and several liability it is unlikely that employees would transfer to more than one employer. Where there are potential transfers to multiple employers, it is common for arguments to be raised that the business/service has been fragmented, so TUPE does not apply: this case does not alter these arguments.

Hyde Housing Association Ltd and other v Layton UKEAT/0124/15, 11 September 2015