In Dewhurst v Revisecatch Ltd the Employment Tribunal has decided that workers, as well as employees, transfer under TUPE.
The case involved cycle couriers who were claiming holiday pay and compensation for failure to inform and consult.
A preliminary hearing was held to decide whether “workers” fall within the definition of “employee” in TUPE. The employment judge considered the European Acquired Rights Directive, which TUPE implements. The Directive defines an employee as anyone who is “protected as an employee under national law”, and operates to transfer rights and obligations arising under an employment contract or an “employment relationship”. The UK’s national law includes various definitions of “employee”, encompassing both traditional employees and individuals in an intermediate class (not employees, but also not independent contractors) ie “workers”. Workers benefit from a limited range of employment rights such as the right to holiday and national minimum wage.
TUPE itself defines an “employee” as “any individual working under a contract of service, or apprenticeship or otherwise”. The employment judge held that this was intended to cover workers as they are individuals who are working such that the nature of that contract would fall within the words “or otherwise”. The judge considered that the reference to “or otherwise” must be intended to mean something; therefore it was more than semantics and reflected the purpose behind the Directive.
Although this is only a tribunal decision and therefore not binding on other tribunals, it is not unexpected given the broad wording in TUPE’s definition of “employee”. It cannot be long before this issue comes before the Employment Appeal Tribunal. Although it does not give workers unfair dismissal rights, it does mean that they are covered by the collective consultation provisions of TUPE and their worker rights, such as holiday pay and national minimum wage, (including any prior breach of such rights) would transfer as well as their contractual rights.
Employers should therefore consider including workers when providing employee liability information (ELI), and when looking at who is affected by any measures and in any collective consultation exercise. An award of at least £500 per worker for failure to provide ELI and a protective award of up to 13 weeks’ actual pay per worker for failure to consult is a high penalty to pay if an employer gets this wrong. Those involved in corporate transactions need to ensure that workers are included in any due diligence exercise and addressed in any warranties and indemnities.