Legal-ease: TUPE's application to workers

According to a recent employment tribunal case the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE’) do apply to workers

The employment tribunal previously considered the question of whether TUPE applies to workers in 2013 in the case of John McCririck v Channel 4 Television Corporation and IMG Media. It held that a worker could be considered an employee for the purposes of TUPE because of the language in regulation 2(1). In particular, it stated that this was the very purpose of the phrase ‘under a contract of services …or otherwise’.

This view was supported by the Court of Appeal case Governing body of Clifton Middle School and others v Askew, which considered that all that was necessary for TUPE to apply was some form of contractual relationship between the worker and the employer.

The employment tribunal in Dewhurst v Revisecatch & City Sprint considered this point in more detail. The tribunal looked at other employment legislation and noted that the Equality Act and the Working Time Regulations both provide protection for workers under the definition of ‘employee’. The employment tribunal went on to consider that the only parties excluded from the TUPE definition of employees are independent contractors without any employment rights.

It is highly likely that the decision in Dewhurst will be appealed, and if the judgment is upheld this will have considerable implications for employers going through a TUPE process.

If the decision is upheld on appeal workers will automatically transfer to the new employer under TUPE. This means the transferor and the transferee will need to inform and consult with the representatives of both employees and workers.

This is perhaps more complicated than it first appears – workers will need to be considered when making decisions in relation to trade union recognition, the structure of and election of employee/worker representation, and the implications of any changes expected to occur after the transfer is complete. Due diligence exercises will need to be robust to capture any ‘woodwork’ workers and transferees will rely on more comprehensive warranties.

Although the decision is yet to be confirmed on appeal employers should consider workers when making TUPE arrangements.

Transferees should undertake increased due diligence on the business’ entire workforce. This will include considering the relationship between the transferor and its contractors who may actually be classed as workers.

Tread carefully, as treating an individual as though they are covered by TUPE may give weight to an individual’s argument on worker status, but failure to include a contractor who is in fact a worker in the process means that they may be exposed to claims.

Even though workers may be protected by TUPE they will not enjoy protection from unfair dismissal under the Employment Rights Act.

Nickie Pickernell is a member of the employment law team in the London office of McGuireWoods