The issue

TUPE applies when there is a business transfer but not normally when a company is acquired by a share purchase. Here, after a share purchase by a subsidiary, a parent company effectively took control of the business carried on by the company that had been bought, JL. Had there been a TUPE transfer? Who was the employer?

The ruling

The parent company had started a programme of integration and had taken over the day-to-day control of JL's business. This meant there had been a TUPE transfer to the parent company, which was now the employer of JL's employees. The transferring employees were entitled to claim compensation for the failure to inform and consult as required under TUPE.

Comment

In most cases there will not be a TUPE transfer on a share sale. However, employers should remember to consider how and by whom the business of a target company will be managed and controlled. In cases where there is some uncertainty, or where another group company will take control, consider following an information and consultation process with appropriate representatives of affected employees to reduce any risk.

Jackson Lloyd Limited and Mears Group Plc v. Smith UKEAT/0127/13. A link to the case is here.