Jackson Lloyd (JL) employed over 400 people working at various sites on social housing maintenance.  When JL got into financial difficulties, its shares were bought by a subsidiary of Mears Group (MG).  From the date of the share purchase, MG took over the running of JL, imposing major changes through its integration teams and telling the employees they would be moving to MG.  For commercial reasons, to avoid triggering a re-tendering process for JL's contracts, the outward appearance given was that JL was an autonomous competitor of MG.  However, the Tribunal found that in reality, from the date of the share purchase, JL was merely a trading name and day to day control of its business activities had passed to MG.  Apparently the employees knew nothing of the existence of the subsidiary at the time.

The issue in Jackson Lloyds Ltd and Mears Group PLC v Smith was whether the claimants had transferred to MG and whether they could bring a claim for a protective award for failure to inform and consult.  The Tribunal ruled that the share purchase by the subsidiary provided the context within which MG began to operate JL's business, so there was a TUPE transfer.

The EAT agreed.  Although TUPE typically does not apply to share purchases, because there is no transfer of an economic entity, the Court of Appeal decided in Millam v The Print Factory (London) 1991 Ltdin 2007 that there could be a TUPE transfer of employees to a holding company following a share sale in circumstances where the activities were in fact being carried out after the purchase by the holding company.  Even though the share sale in the Jackson Lloyds case was to a subsidiary, the same principle applied – the share sale was the trigger for the transfer to MG.

An additional issue was whether the claimants were entitled to present their claims to the Tribunal in their own names.  While there had been an employee representative committee, the Tribunal had found that, on the facts, the mandate of the representatives who had served on the committee had expired some time before the share sale.  The ad hoc committees that had continued to operate after this had not been mandated by the affected employees.  The Tribunal decided that the claimants could therefore bring protective award claims in their own names and the EAT upheld this as well.