The Employment Appeal Tribunal (EAT) has held that no TUPE transfer occurred when an employee’s employment was transferred from a sole employer to a group of companies which included the original employer.
Mr Layton was employed by Martlet Homes Ltd. This company then joined a group of companies called the Hyde Group and became a subsidiary of Hyde Housing Association Ltd.
During a subsequent restructure, Mr Layton was of- fered a position where he would be employed by the Hyde Group (i.e. he would be jointly and severally em- ployed by all members of the group). Mr Layton object- ed to changes to his terms and conditions, particularly the loss of a bonus. The Hyde Group terminated Mr Layton’s contract and offered him re-engagement on the new terms. Mr Layton accepted the new contract but claimed that he had been unfairly dismissed.
The Tribunal had to consider if there had been a rele- vant transfer of Mr Layton’s employment under TUPE. It held that there had been a relevant transfer from Martlet Ltd to Martlet Ltd and other members of the Hyde Group. The company appealed to the EAT.
What does this mean?
The EAT held that TUPE does not preclude the transfer of employment to multiple transferees, as long as the economic unit retains its identity. However, it held that there is no transfer under TUPE where the transferor
In this case, control of the business remained with Martlet Ltd which retained liability for Mr Layton’s employment (even though as a result of the restructuring, he was jointly and severally employed by all members of the group). This meant that the legal position be- tween employer and employee remained unchanged and there had been no relevant transfer under TUPE.
What should employers do?
Although it is not common to have employees who are employed by several companies, employers who are considering this set up can be reassured that TUPE will not apply to their employees as long as the company remains one of the employers on a joint and several basis.
Case reference: Hyde Housing Association Limited and others v Layton