In the case of Todd v Care Concern the EAT has given guidance to the parties to any TUPE transfer as to the extent of their statutory duty to inform and consult with affected employees.
The case concerned the transfer of ownership of a care home. Six weeks before the transfer took place, there was a short meeting with the employees (but only those who were on the day shift at the time) at which they were simply told of the change of ownership and assured that their jobs were safe.
The employees as a whole, including those on the night shift, claimed that this was not sufficient. The employment tribunal agreed and awarded them maximum compensation of 13 weeks' actual wages for each employee to be paid by the transferor. The transferor appealed to the EAT.
The EAT confirmed that the duty to inform applies even where no 'measures' are envisaged about which the employees should be consulted. The steps taken to inform staff were inadequate because no attempt had been made to communicate orally with all staff, nothing had been put in writing and the transferor had failed to give full and prompt answers to questions raised.
In any event, in this case, the EAT said that there were to be changes in pay arrangements that were 'measures' and so there should also have been full consultation about that issue.
However, the EAT did agree with the employer that the compensation figure was too high. It decided that the maximum award of 13 weeks pay should only apply where the employer has done nothing at all and reduced the award to seven weeks' pay per employee.
Points to note:
- The penalty for failure to inform and consult is harsh. It is intended to punish the employer, not compensate the employees for any actual loss and is calculated per employee.
- The default position under the TUPE Regulations is that liability for failure to inform and consult rests jointly with transferor and transferee so both parties have an interest in making sure that the duty is carried out to the standard indicated by the EAT in their judgment in this case.