Transfers of Undertakings (TUPE)

Traditionally, UK employment tribunals have taken a fairly harsh approach to any breaches of collective consultation obligations relating to collective redundancies or business transfers (TUPE). The applicable damages are intended to be punitive rather than compensatory, and so for a number of years, the approach has been to start at the maximum capacity of 13 weeks/90 days and only reduce that if the circumstances suggest it is appropriate.

The recent case of Shields Automotive Ltd v. Langdon and another UKEATS/0059/12 has highlighted a shift in position slightly more towards business practicalities. This case concerned a minor technical breach of the consultation provisions in the TUPE Regulations, specifically relating to the appointment of an elected employee representative. The quality and content of the consultation itself was not faulted. The original tribunal made an award of seven weeks’ pay per affected employee, but on appeal, this was reduced to three weeks.

Of key importance to the appeal was the fact that this was a minor technical breach, and the message was that whilst the award should be punitive, account should be taken of the seriousness of the breach in that respect. Since the actual consultation here was appropriate and the spirit was compliant, the award should have been low.

Another encouraging point was that consultation need not be over lengthy to be reasonable. TUPE consultation (unlike collective redundancies) has no set timing guidance, merely considerations of reasonableness. In this case, consultation started only around one week before transfer, and this was reasonable under the circumstances.

As a final note of caution, these cases are always decided on a case-by-case basis and in accordance with all their applicable circumstances—where one week might be an appropriate period in one case, it may be too short in another. Specific advice should, therefore, always be taken in good time in advance on the appropriate process and timing in each case.

Collective Redundancies

In yet more new legislative changes, the collective redundancy consultation rules were changed on April 6, 2013, again in an employer-friendly fashion. In particular, the following changes were introduced.

  • Fixed term contract employees whose contracts expire without renewal (generally classed as a redundancy) are now excluded from the collective redundancy consultation obligations (applicable where 20 or more redundancy dismissals are proposed within one establishment in a 90 day period). 
  • The minimum consultation period and notification period to the Secretary of State, in the case of 100 or more proposed redundancy dismissals within 90 days, has been reduced from 90 to 45 days in each case (although the maximum “protective award” for breach remains at 90 days).