The Court of Appeal has now confirmed the controversial EAT decision in the case of Royal Mail Group Ltd v CWU.

The EAT considered that the obligation to inform and consult under TUPE Regulation 13 was fulfilled if the employer informed the employee representatives of its genuine belief as to the legal implications of a transaction. In this case, Royal Mail believed that the disposal of a large number of loss-making post offices as franchises to WH Smith would not amount to a TUPE transfer.

Post Office employees all had mobility clauses in their contracts and so were offered either redeployment or voluntary redundancy. For this reason, Royal Mail believed that TUPE Regulation 4 (automatic transfer of employment) did not apply because no contracts were 'terminated' by the transfer.

Royal Mail was in fact mistaken in its belief that TUPE did not apply but the EAT considered that TUPE Regulation 13 put no statutory obligation on the employer to warrant the legal accuracy of the information it was providing. The Court of Appeal agreed.

Points to note –

  • The Court of Appeal based its decision on the wording of Regulation 13. It stressed, however, that employers will not be able to abdicate responsibility by 'shutting their eyes to problems'. There is an obligation on employers to consider the legal implications of their actions. What representatives should be informed of is the employer's considered view of the legal implications. A total failure to inform and consult will still be penalised.
  • This decision may allow some employers to escape liability for failure to inform and consult, on a transfer of an undertaking or service provision change, where TUPE applies. However, there will still be an automatic transfer of the employees' contracts to the transferee (regardless of whether the transferor and/or transferee believes that TUPE applies or not) and any employees dismissed for a transfer-related reason will have been unfairly dismissed.