The EAT has held, in the case of Royal Mail Group Limited v Communication Workers Union, that an employer which holds a mistaken view that TUPE does not apply to a particular transaction, will not automatically be in breach of its obligations to inform and consult employees by failing to inform them of the correct legal position.

Background  

Royal Mail Group Limited (RMG) had, since 1986, transferred a number of post offices to franchisees to be run privately. RMG had a policy that employees in affected post offices could choose voluntary redundancy or be redeployed pursuant to an express mobility clause in their contracts of employment. The union historically had not objected to this approach, as it preferred to keep its members working within the public sector.

In 2006, RMG undertook a large-scale transfer of a number of post offices to WH Smith. The union raised concerns that the transfers were going ahead on the basis that TUPE did not apply. RMG appeared to take the view that TUPE did not apply. It advised employees of the transfers and the normal voluntary redundancy or redeployment arrangements but there was no direct consultation with the union. The union brought a claim for breach by RMG of its obligations to inform and consult under TUPE.

The EAT held that, based on the facts, at least some employees had transferred under TUPE and therefore RMG was mistaken in its view about the application of TUPE.

As a result of its mistaken belief, the information that RMG had given to the affected employees about the legal effect of the transfer and the measures it proposed to take was also incorrect. However, the EAT overturned the employment tribunal's finding that that RMG's belief was not genuine.

If the belief was real, RMG was not in breach of its obligations to inform and consult because it had done all it could to inform them of the consequences as it saw them.

Impact on employers

This is an unusual case and employers should be warned that they will not always succeed with a defence that they did not inform or consult because they either did not realise there was a transfer or they genuinely believed there was not. This decision will not allow employers to drive a coach and horses through TUPE by deliberately taking a stance that TUPE does not apply or avoiding the issue and remaining ignorant of the true position.

It was not suggested in this case that RMG's policy of redeploying employees immediately prior to a TUPE transfer was ineffective. However, the EAT considered that where a mobility clause was exercised with the sole purpose of avoiding TUPE, that might be incompatible with the principles underlying TUPE, as the right to transfer would be frustrated. Employers are reminded that tribunals are alive to avoidance techniques and will take the parties' motives into account in reaching their decisions.