In Born London Limited v Spire Production Services Ltd, Spire had taken over a printing contract from Born, in circumstances that amounted to a TUPE service provision change. As required under Regulation 11 of TUPE, Born gave "employee liability information" about the 32 employees transferring to Spire. Born described a Christmas bonus as non-contractual. Spire maintained that the bonus was in fact contractual and claimed £100,000 in compensation under TUPE to cover this contractual obligation going forward, arguing that Born had provided incorrect employee liability information.
The EAT upheld the tribunal's decision that, even if the bonus was contractual (an issue that was not entirely clear), Spire's claim had no reasonable prospect of success. The obligation under Regulation 11 is to notify the transferee employer of the same details that an employer is obliged to give a new employee in a written statement under section 1 of the Employment Rights Act. A section 1 statement is not a contract of employment; some particulars will be contractual in nature, others will not. Although pay is likely to be an important part of the employment contract, there are forms of remuneration that are non-contractual and these are also meant to be included in a section 1 statement. However, whether or not a bonus is contractual is additional information and does not form part of the employee liability information.
Spire argued that because the section 1 statement has to include the scale or rate of remuneration or "the method of calculating remuneration", Born had to specify whether a payment was contractual in nature. The EAT rejected this – if this was intended, section 1 would have made that clear.
Employee liability information was designed to provide a transferee with a comprehensive list of rights and obligations, to allow it to undertake a commercial assessment of the potential liabilities it would incur after a transfer. The precise contractual nature of some of those rights and obligations is a matter for due diligence for an incoming service provider or purchaser.