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Can transferring employees sue their new employer for a pre-transfer failure to inform and consultTUPE UPDATE: Can transferring employees sue their new
employer for a pre-transfer failure to inform and consult?

» Posted on: 24 April 2014

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The answer is No, as held in the EAT in Allen v Morrisons Facilities Services Limited.

Leeds City Council has a large stock of housing requiring maintenance; this function is carried out by various private contractors. In the Spring of 2011, three of the service contracts were due to expire and new contracts were awarded to two different providers. One of those was the Respondent, Morrisons Facilities Services. Between 400 and 500 employees transferred from the outgoing contractors to Mears Group (formerly also a Respondent) and Morrisons Facilities. It was agreed that there was a service provision change on a change of provider, a relevant transfer within the meaning of TUPE.

In June 2011, four ET1s were lodged against seven Respondents - the three transferor companies, the two transferee companies, Leeds City Council and another company. The claims against the Council and the original fifth Respondent were withdrawn and dismissed. Over one hundred employees brought various claims which were also brought by Unite, the Union and the GMB for breach of duty to inform and consult over proposed redundancies and in the alternative, a breach of the Respondent's obligations to comply with their information and consultation duties under TUPE Reg 13. Claims were settled or withdrawn leaving some claims by individuals against the Respondent and claims for a failure to inform and consult under Reg 13.

The EAT held that employees can bring an action for failure to provide information under Reg 13 TUPE against their employer. The only method that they can seek compensation from the transferee is to bring a claim against the transferor for breaching Reg 13(2), who then gives notice to the transferee under Reg 15 and makes them a party to the proceedings.

An order for compensation against the transferee will only be awarded if the employees can establish that the transferor is in breach of their Reg 13(2) obligations, and the transferor shows that it was not reasonably practicable for them to perform their duty because the transferee had failed to provide information to the transferor under Reg 13(4).

As the case against the transferor had settled, the employees could not bring an action against the transferor, so the claim against the transferee failed.

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