The EAT has recently delivered its judgment in the case of Allen and others v Morrisons Facilities Services Ltd UKEAT/0298/13, where it clarified the position regarding information and consultation in TUPE transfers. It confirmed that the transferee is obliged to give information about any measures it intends to take to the transferor but there is no obligation on the transferee to give that information to the employees' representatives. This means that employees can only bring a claim against the transferor – and not the transferee - if they do not receive sufficient information.
Leeds City Council had a large stock of housing and used various private contractors to provide maintenance services. Three contracts were due to end in spring 2011 and new contracts were awarded to two providers, Morrisons Facilities Services (Morrisons) and Mears Group plc (Mears). Hundreds of employees transferred from the outgoing contractors to Morrisons and Mears. These were relevant transfers within the meaning of TUPE.
A claim was brought against Morrisons for breach of its obligations to inform and consult under TUPE by failing to provide information while the employees were still employed by the transferors.
Employment tribunal decision
The employment tribunal dismissed the claim. It held that the transferring employees could not bring a complaint against a transferee for failure to provide information to the transferor, nor did they have any redress against a transferee for wrong or inadequate information provided to the transferor. The transferor complies with its obligations if it gives the employees' representatives all the information it has, including the assessment it has made about measures which it envisages the transferee will take, and if the transferor has taken all the steps it can to obtain the information about measures.
The claimants appealed to the EAT and the appeal was dismissed. The EAT held that the transferee is required to give the transferor certain information so that the transferor can perform its duties. Morrisons was required to give the outgoing contractor the information but there was no obligation on Morrisons to give information to the employees because there is no obligation on a transferee in this respect.
An employee can bring a claim against the transferor even if he is no longer employed by it because he was employed by the transferor at the time of the transferor's failure to provide the information.
Employees can only obtain compensation from the transferee if a claim is pursued against the transferor and the transferor joins the transferee as a party to the proceedings, where the transferee has failed to supply the transferor with details of any proposed measures. That had not happened in this case because the claimants had already withdrawn or settled their claims against the transferors.
It is clear that transferred employees cannot bring a claim against the transferee if information is not correct or is not provided. However, transferors and employees are unlikely to know whether the information provided by the transferee about its proposed measures is accurate and complete until after the transfer. A transferor is not obliged to join the transferee to any proceedings, which can leave employees without any means of redress. Whilst it may be possible to agree that a transferee will be joined into any proceedings if a claim is brought, this is unlikely to be practical where a transfer takes place between group companies.