Todd v Strain and ors EAT 12 August 2009
In this case the EAT held that changes to pay arrangements following a TUPE transfer were measures in connection with the transfer and the transferee’s failure to inform and consult the workforce about them was a breach of the regulations. Although the arrangements were administrative they were not an inevitable consequence of the transfer. TUPE did not prescribe that a measures effect must be disadvantageous to employees in order to trigger the requirement to consult.
Mr Todd was the owner of a care home which was transferred to CC in January 2008. In November 2007 Mr Todd called a meeting without notice to inform staff that an offer had been made for the home that could not be refused but that everyone’s job was safe. No detailed information was given at the meeting which was only attended by about a third of the staff. There was no further consultation with staff prior to the transfer. Thirty-two care home employees subsequently complained to a tribunal that Mr Todd and CC had failed to inform and consult under TUPE.
The tribunal held that Mr Todd had failed to inform and consult about measures and had failed to arrange for the election of appropriate employee representatives. The measures they should have consulted about related to the payments to staff for work done in the days up to the date of the transfer and the change to their normal payment date. The failure was a serious one and each employee was awarded 13 weeks’ pay, the maximum compensation allowable.
The tribunal also decided that CC was not at fault and only Mr Todd was liable to pay the award. Mr Todd appealed.
Although the sums were small the EAT upheld the Tribunal’s finding that Mr Todd had failed to inform and consult. The measures were not so trivial that they would not be caught by TUPE. The employees were low paid and the changes did cause worry. TUPE does not prescribe that a measure’s effect must be disadvantageous to the affected employees to trigger the requirement to consult. However the EAT overturned the decision to award 13 weeks’ pay and substituted an order for 7 weeks’ pay. Although there was a complete failure to observe the obligations this was not a case where no information had been provided. Furthermore the measures in question were not of any great significance. The EAT also held that in accordance with Regulation 15(9) which provides for joint and several liability CC was also liable to pay the compensation awarded despite the fact that it had not been at fault.
Key point: The decision seems very unfair to CC and reveals a thin line between changes that are inevitable and which do not trigger the information and consultation obligations and those which do. If in doubt employers should err on the side of caution and consult to avoid the risk of a claim and Buyers should seek confirmation if not a warranty that this has been done and an indemnity in the event that it has not.