Cable Realisations v GMB 2009 UKEAT 0538/08

This case concerns the obligation to inform and consult with affected employees in a transfer situation. Under TUPE an employer may be liable if it has failed to comply with the requirement to inform and consult the representative long enough before the relevant transfer to enable the employees to consult with their appropriate representatives. This arises even if no measures are contemplated in relation to the transfer.

In this instance, for a large period of time after the information was provided the factory was closed for the annual summer shutdown. Without that shutdown there would have been sufficient time to allow consultation to have taken place. The Tribunal awarded 3 weeks’ wages in respect of each of the union members who were affected. Cable appealed and the employees also challenged the award of 3 weeks’ pay. Although the maximum award is 13 weeks’ pay the EAT held that this was not a case in which no information had been provided. There was no failure to engage in mandatory consultation. The award reflected the justice of the case.  

Key point: Employers should heed the financial risks of failing to consult properly whether or not it is obligatory.

TUPE: employers consultation obligations

Royal Mail Group Limited v Communications Workers Unions 2009 EWCA Civ 1045

The Court of Appeal held in this case that the only obligation on transferor employers in a transfer situation to communicate matters such as the legal, social and economic implications of the transfer as it believes them to be. The employer does not warrant the truth of what it says so if it makes a mistake about the legal implication of the transfer, it will not without more be liable for a failure to inform and consent. The employer does not in effect warrant the accuracy of the law. The case concerned the transfer of certain post office businesses from Royal Mail to WH Smith. In this case TUPE did not apply.

TUPE: No service provision change

OCS Group UK Ltd v Jones and another UKEAT/0038/09

The EAT upheld a Tribunal decision that the service provision changes under TUPE did not apply to the re-tendering of a catering contract. The activities carried out by the incoming contractor were wholly different to those carried out by the outgoing contractor. In earlier cases the EAT has confirmed that the activities need not be identical and it will be sufficient if they are essentially the same as those carried out as the alleged transferor. In this case however, the catering operation had changed from the provision of a full canteen service where the OCS catering staff were chefs to staff becoming sales assistants in a kiosk. On that basis no service provision change had occurred. OCS appealed.

The EAT held that Tribunals should adopt a common sense and pragmatic approach but whether the activities were fundamentally and essentially the same was a question of fact and degree to be assessed by the Tribunal.

OCS’s argument that the contract was a sham to avoid TUPE when the cold food regime was not successful and MIS was replaced by new contractors providing hot food was not accepted by the Tribunal.

Key point: Employers should welcome the fact that Tribunals are prepared to define the contractual services narrowly when considering whether TUPE 2006 applies but it will be a rare case where there are such marked differences in the nature of the activities carried out, following a change of service provider.