Regulation 4 of TUPE transfers to a transferee all rights, powers, duties and liabilities under or in connection with a transferring employee’s contract of employment. In Bernadone v Pall Mall Services Group Limited [2001] ICR 197 the Court of Appeal confirmed that a liability in connection with the employment contract included liability for the form of negligence, that is to say for personal injury. This was illustrated in the recent High Court case of Baker v (1) British Gas Services (Commercial) Limited (2) J&L Electrics Lye Limited. Mr Baker was an electrical engineer working for British Gas. In 2012 he was sent to a client’s premises to do electrical repair work. Whilst working with a light, he was electrocuted, had a cardiac arrest and was thrown to the floor, thereby suffering serious personal injury.

Prior to October 2010 he had been employed by Connaught Compliance Electrical Services Limited (CCES). In October 2010 there was a TUPE transfer of that business to British Gas. In his claim for personal injury he sued not only British Gas, but also claimed that CCES was also responsible for personal injury because of the electrical work it had carried out on the lights concerned, and in particular, he alleged that periodic inspections undertaken by CCES before his employment with British Gas, and his accident, were a cause of the injury concerned. The case raises a fascinating issue of whether British Gas was liable for any breaches of duty by CCES occurring prior to the transfer, even though the personal injury concerned did not take place until after the transfer. The High Court held that liability for CCES’ breach of duty, occurring before the TUPE transfer, did transfer under TUPE. 

The employer argued that the transferee could not be liable for a breach of duty which occurred before the transfer when the injury was only sustained after the transfer date. This was rejected by the High Court: “the Regulations are not designed to protect the transferee from unknown liabilities”. On the contrary, said the Court, where there has been a breach of an employer’s duty before the transfer, but the injury occurs after the transfer, this squarely falls under TUPE. Regulation 4(2)(b) specifically provides that: “any act or omission before the transfer is completed, in relation to the transferor in respect of [the contract of employment] shall be deemed to be an act or omission in relation to the transferee”.

Therefore, British Gas was liable to Mr Baker for the breach of duty which occurred in the failure to detect and remedy a defect in the wiring prior to the accident, and in particular during a 2010 period inspection. Amanda Yip QC, sitting as a deputy judge of the High Court stated: “it is quite clear from this that tortious liabilities transfer, whether they are fully accrued or contingent. To hold that an employee who is injured after the transfer, but as the result of a breach of duty committed before the transfer, cannot recover against the transferee would frustrate the whole purpose of the Regulations and the underlying Directive”