An employee who does not know the transferee's identity until after a TUPE transfer can object post-transfer. Although the wording of TUPE suggests objections must take place pre-transfer, the EAT ruled that TUPE should be construed purposively to cover post-transfer objections. The objection will need to take place fairly quickly after the transfer to avoid argument that by conduct an employee is making it clear that there is no real objection. Employees who objected two days after the transfer and started new jobs were therefore no longer bound by restrictive covenants in their employment contracts, as these did not transfer to the transferee under TUPE. As the goodwill of the business had not been assigned, the transferee was unable to pursue the alternative argument that the benefit of the covenants had been assigned to it.
The EAT decided that the transferor's obligation to inform staff about the transfer includes telling them about the right to object, the effect of objecting and, implicitly, the transferee's identity (surprisingly, this is not an express requirement). Employees who object can still bring certain claims (eg constructive dismissal); therefore, transaction documents will need to apportion liability according to which party is responsible for any potential non-disclosure of the transferee's identity. If the transferee is keen to ensure any objections take place before the deal is completed (eg if it would no longer be interested in the deal should certain key employees not transfer), it may also require warranties that the transferor has provided the information to staff in good time. (New ISG Ltd v Vernon, EAT)