TUPE and compromise agreements have never sat well together and this case highlights the importance of ensuring the agreement is properly drafted.

The key details are as follows:

  • Two claimants settled their claims with the help of Acas via a compromise agreement with the transferor.
  • Two other respondents were not referred to in the agreement.
  • Liability to inform and consult was joint and several.

The tribunal held the claimants could not sue the other two respondents, relying on the renowned legal publication ‘Chitty on Contracts’ that a release by one debtor releases the others.

The EAT held that this was wrong and not the intention of the claimant in this case. The compromise agreement in this case was found to be a covenant not to sue the transferor and did not release the other two respondents.

Key point: this case demonstrates the importance of ensuring all potential respondents are signed up to a compromise agreement or COT3. This principle applies not only to TUPE situations but also to discrimination claims where there is often more than one respondent.

Tamang v Act Security Limited (2012)