This is the case study presentation from Lewis Silkin's recent "Warranties and Indemnities" seminar on the 8th March 2012 by Julian Parry and Lucy Lewis. If you would like more information please get in touch. http://www.lewissilkin.com Julian Parry http://uk.linkedin.com/in/tupeguru Lucy Lewis http://uk.linkedin.com/in/lucylewis

1. TUPE case update
“What’s trending in TUPE”
8 March 2012

2. TUPE trends
Decline of transfers under
SPC provisions
Easier for th t
E i f the transferee to
f t
claim SPC doesn’t apply
Rise of transfers from
companies in administration
Harder for the transferee to
claim TUPE doesn’t apply

3. Enterprise Managed Services v Connect Up
(EAT)
Transferor:
EMS • No service cover for
curriculum matters
(15% change)
• School IT • Managed service
support for for curriculum/
curriculum and administration • Only win 60% of
administrative schools (40% of
systems schools divided
• Software between 5 other
Client: Leeds
Cli t L d maintenance suppliers)
City Council support
Transferee:
Connect U
C t Up

4. EAT decision and guidance
Decision: No SPC
15% change meant not “fundamentally or essentially the same”
Services spread amongst 6 providers – division/fragmentation
Guidance:
What “activities” are being carried out by transferor?
Are those activities essentially the same after the transfer?
If yes, is there an “organised grouping
If not, no transfer
of employees ?
employees”?

5. Eddie Stobart v Moreman & Others (EAT)
Transferor:
Eddie Stobart
• Centralised meat • Argued no
• Warehousing, p
packers organised so
g organised
packing and
ki d that night shift pack grouping of
i f
distribution for one client, and day employees
shift pack for another
client (Vion) Transferee:
Client: Vion
FJG Logistics

6. EAT decision
No organised group of employees
f
In order to have organised group, employees must be
organised “in some sense by reference to the client in
in
question”
Which implies:
Without deliberate planning or intent,
Employees must be deliberately there will be no “organised grouping”
organised into an identifiable client even if an employee mostly works on
grouping tasks f th li t
t k for the client

7. EAT guidance
Only once it has been found that there is an organised group
of employees do you need consider if the employee is
“assigned”
g
When assessing assignment, consider:
Time spent by the Value given by Employee’s Costs allocation
employee employee contract within transferor

8. Key2Law v De’Antiquis (CoA)
(OGT Limited v Barke in EAT)
Transferor: Drummonds
Kirkwood LLP Transferee: Key(2)
(Solicitors) in Law
administration
• Made Ms De’Antiquis • Administrators entered
redundant days before into “management
entering administration contract” for the office in
which Ms De’Antiquis
De Antiquis
worked

9. Legal conundrum
Is administration entered into with a view to liquidation
of the assets?
YES, no TUPE transfer
NO, TUPE applies with some
amendments

10. Court of Appeal Decision
Administration not entered into
with a view to liquidation of the
assets. TUPE will always apply
(with some amendments) to
companies in administration.
EAT decision in OTG v Barke applied.
Companies in administration
cannot fall outside TUPE
EAT decision in Oakland v Wellswood
overruled

11. Spaceright Europe v Baillavoine and another
(CoA)
Transferor: Ultralon Transferee:
Holdings (in Spaceright Europe
administration) Limited
• Dismiss Mr Baillavoine • Enter into “management
before a transferee was contract” with Ultralon
identified

12. Legal conundrum
Is a pre-transfer dismissal where the transferee is not
identified at the time “connected to the transfer”?
No, the dismissal is not
automatically unfair
Yes, the dismissal will be
automatically unfair unless
t ti ll f i l
there is an ETO reason

13. Court of Appeal Decision
A pre-transfer d s ssa ca be
p e a s e dismissal can
connected with the transfer even
if the particular transferee if not
identified.
identified
EAT decision in Harrison Bowden v Bowden
applied.
Dismissals by companies in
administration where no
transferee is identified can be
automatically unfair unless there
is an ETO reason.
EAT decision in Ib T di v W lt
d i i i Ibex Trading Walton
overruled

14. Court of Appeal Decision
There must be an intention to change
the workforce and continue to
conduct business for an ETO
ETO.
EAT decision in Berriman v Delabole Slate
applied.
No
N ETO reason if dismissal i t
di i l is to
slim down the business to make
it more attractive for sale.

15. And finally.......
The TUPE award goes to:

16. Pannu v Geo W King Ltd and others (EAT)
Geo W King Ltd argued that assembly of car parts on factory
assembly line was a service performed for a client
Although the employees were
Geo W King was producing car providing a service to their
parts employer, the contract with the
client was for the supply of parts
TUPE did not apply - (3(3)(b))
exclusion re supply of goods

17. Thank you