Todd v Care Concern
EAT holds 13 weeks' pay should not be starting point in an award for failure to inform and consult under TUPE.
Mr Justice Underhill (President of the Employment Appeal Tribunal (“EAT”)) stated that the maximum 13 week award should only be the starting point if there has been a complete failure to engage in the information/consultation process. The EAT therefore reduced the level of award made by the Tribunal to seven weeks’ pay. The EAT also held that the Tribunal had been wrong not to find the transferor and transferee jointly and severally liable for the award.
Liability for failure to inform and consult under TUPE is one of the most potentially costly tribunal awards. Employers have potential liability for an award of 13 weeks’ gross (uncapped) pay for every employee affected by the transfer, even if only one employee (or their representative) brings a claim.
This decision is good news for employers as Tribunals will now take into account the steps carried out by the employer and the circumstances to assess the award rather than start at a premise of the maximum of 13 weeks.
Regulation 15(1) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) provides that, where a Tribunal finds a complaint of failure to inform and consult to be well founded, it may order the employer to pay appropriate compensation, which is defined as “such sum not exceeding thirteen weeks pay for the employee in question as the tribunal considers just and equitable having regard to the seriousness of the failure of the employer…”
This case involved the purchase of a care home by Care Concern. The purchase constituted a “relevant transfer” so that TUPE applied. 32 employees brought proceedings in an Employment Tribunal against both the seller (Ms Todd) and Care Concern , complaining amongst other things of breaches by Ms Todd of the obligations to inform and consult.