2. REVIEWING THE CASE LAW Melanie Tether

3. TUPE 2006 apply to:  The transfer of an undertaking or part of an undertaking where there is a transfer of an economic entity which retains its identity  a service provision change (SPC) When do TUPE apply?

4.  A group of workers engaged on short term contracts was not an economic entity  All the workers did different work and worked on different vessels  The fact that all had short term contracts and provided flexibility within the client’s workforce was not sufficient to convert them into an economic entity Wain v Guernsey Ship Management (CA)

5.  The Directive could apply where some of the management personnel and temporary workers employed by a temporary employment business transferred to another temporary employment business in order to carry out the same business for the same clients  This could be a transfer: ­ despite the absence of an organisational structure in the first employment business ­ even though the temporary workers were integrated into the organisational structure of the client Jouini v Princess Personal Service [2007] IRLR 1005 (ECJ)

6.  TUPE do not apply to a share sale  But there may be a transfer if the parent company assumes day to day control over the operations of its new subsidiary Share transfers

7. After SCF acquired YBT:  most of YBT’s senior managers were dismissed  directors of SCF took over management of YBT  SCF exercised tight control over YBT’s finances and new business opportunities Carey v SCF (1)

8. On the other hand:  YBT operational staff were not integrated into SCF  existing YBT contracts were delivered by YBT staff  SCF had put money into YBT and any investor would have wanted to ensure a a proper investigation of YBT’s finances Carey v SCF (2)

9.  Employee will not transfer if s/he objects to becoming an employee of the transferee – see regs 4(7) and (8)  Contract terminates automatically by operation of law, which means: ­ no dismissal ­ no right to compensation The right to object

10.  An employee can exercise the right to object before or after the transfer  In a case where the employee does not know the identity of the transferee before the date of the transfer, a requirement to notify an objection before the transfer would undermine the employee’s fundamental freedom to choose his own employer New ISG Ltd v Vernon [2008] IRLR 115

11.  An employer cannot change contracts of employment if the transfer of an undertaking is the reason for the variation  An agreed variation may be void if the transfer of an undertaking is the reason for it – see Daddy’s Dance Hall [1988] IRLR 315 Changes to terms and conditions

12.  A contractual variation for a transfer-related reason is not binding on the employee  But this does not prevent the employee taking the benefit of variations agreed with the transferee i.e. such variations are binding on the employer Regent Security Services Ltd v Power [2008] IRLR 66

13.  Dismissal of an employee is automatically unfair if the sole or principal reason is a transfer- connected reason which is not an economic, technical or organisational reason entailing changes in the workforce (‘ETO reason’)  Dismissal of an employee is potentially fair if the sole or principal reason is a reason connected with transfer that is an ETO reason Transfer-connected dismissals

14.  The right of an employer to dismiss for an ETO reason only arises where the employer dismisses for a reason of its own, relating to the future conduct of its own business and entailing a change in its own workforce  The transferor cannot fairly make employees redundant before the transfer for reasons which relate to the way the transferee intends to run the undertaking Hynd v Armstrong [2007] IRLR 338

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