In an unusual decision, the EAT has suggested that compliance with the TUPE regulations may depend to some extent on whether the employer thinks that TUPE applies or not.

In the case of Royal Mail Group v Communication Workers Union the Royal Mail wanted to dispose of a large number of loss-making post offices as franchises to WHSmith. Post Office employees all had mobility clauses in their contracts and so were offered redeployment or voluntary redundancy. For this reason Royal Mail thought TUPE Reg 4 - automatic transfer of employment - did not apply and consulted with the union on that basis.

The employment tribunal considered that Reg 4 did apply and so Royal Mail was automatically in breach of Reg 13 for failure to consult.

The EAT has now allowed the employer's appeal in part. Reg 4 did apply but because the employer genuinely thought it did not, it should not be penalised for consulting on that basis. The case was remitted to the employment tribunal to consider whether the consultation had been adequate on the basis that the employer genuinely thought that no employees would transfer.

Points to note –

We understand that the union in this case is considering an appeal to the Court of Appeal. It certainly seems strange that the duty to consult should be limited in this way, if TUPE is meant to apply to a relevant transfer regardless of the intention of the parties involved. We shall keep you informed of developments.

One interesting issue discussed by the EAT was whether the fact that the employees had mobility clauses in their contract made any difference as to whether TUPE applied. On this issue, the EAT’s decision was less unexpected: If the employee is employed in the undertaking at the time of a TUPE transfer then his/her employment will automatically transfer to the transferee. This is so even if there is a mobility clause in his/her contract. If the employer has not actually activated the mobility clause pre-transfer (and then not with a view to avoiding TUPE) then TUPE will take effect in relation to that employee and his/her contract.