(i) No liability for mistaken but genuine view of implications of transfer
A transferor will not be liable for giving incorrect information to employee representatives about the legal implications of the transfer, where its view is genuinely held.
In contrast, the EAT thought that an employer would be liable for breaching the duties to inform and consult where it genuinely failed to realise that TUPE applied or genuinely thought certain employees were not affected by the transfer.
The existence of mobility clauses enabling an employer to reassign employees out of the transferring business will not prevent them actually transferring under TUPE, if they remain assigned to the transferring business immediately before the transfer. This is so even if in practice employees have continued to work for the transferor post-transfer. Transferors need to ensure they reassign employees they wish to keep well before the transfer (and note that the EAT did raise the possibility that this may not be effective if done to avoid TUPE). (Royal Mail v Communications Workers Union, EAT)
ii) No obligation on transferee to consult post-transfer
A transferee is not required by TUPE to consult the workforce it has acquired post-transfer about any measures affecting them.
The transferee has to provide information about such measures pre-transfer (which the transferor must pass onto to the transferring workforce), but there is no obligation under TUPE on either party to consult about these either pre- or post-transfer. Both transferor and transferee only have to consult pre-transfer about their own measures affecting their own workforces. (UCATT v Amicus, EAT)
(iii) TUPE may not apply to transfer employees on a pre-pack administration
Employees may not transfer under TUPE where an administrator believes that it is not possible to rescue the company as a going concern and takes immediate steps to sell company assets with a view to eventual liquidation of the company.
Where insolvency proceedings are begun with a view to compulsorily liquidating the company, employees do not automatically transfer under TUPE to the buyer of any assets. The buyer can choose who to hire and on what terms (although employees taken on may still have continuity of service under other legislation).
Where the business is sold following certain other types of insolvency proceedings, employees are transferred under TUPE although there may be more scope for agreeing changes to terms than in a non-insolvency transfer.
BERR guidance (available here) suggests that all administrations fall into the second category as their primary purpose is to rescue the business, even if in practice this is not possible. The EAT has disagreed, ruling that it is the actual intention of the administrators in the particular case that matters. Here, the administrators' preliminary report set out their belief that a rescue was impossible. On appointment they took immediate steps to sell assets with a view to liquidation and did not trade as a going concern.
The decision is potentially good news for buyers of pre-packs, although it could well be appealed, particularly given the conflict with BERR guidance and the adverse impact for employees. Even if correct, the analysis in any other case will very much depend on the facts and in particular the administrators' intentions. Buyers should seek to reflect the risks of a different analysis in the terms of sale. (Oakland v Wellswood, EAT)
(iv) Tier 2 sponsorship licences
The UK Border Agency has published updated guidance (available here paragraphs 89 to 94) on steps employers must take following a business acquisition involving the transfer of skilled migrant workers sponsored under Tier 2 of the new points-based immigration system. In essence, any party which is a licensed sponsor must inform the UKBA of the transfer and an unlicensed transferee must apply for a sponsor licence, all within 28 days of the transfer.