TUPE - Post Transfer Consultation

The Employment Appeal Tribunal (EAT) has considered (AMICUS and TGWU v Glasgow City Council) whether the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) require a transferee employer to consult with the union representatives of transferred employees after the transfer of the business has taken place, over measures it envisages taking in relation to them.

In 2006, Glasgow City Council decided to transfer its Building Services Division to a newly incorporated entity, City Building (Glasgow) LLP. In October that year, 2,000 Council employees transferred to the new business.

The Trade Unions claimed that there had been a failure to inform and consult employees under TUPE because in their view Regulation 13(6) requires the transferee employer to consult with the representatives of transferred employees after the date of the transfer, where measures are envisaged that will affect employees connected with the transfer. The Employment Tribunal disagreed. In its view, the framework of the information and consultation part of TUPE was ‘formulated on a pre-transfer timetable’.

On appeal, the EAT held that the EC Acquired Rights Directive 2001, which the TUPE Regulations implement into UK law, is not intended to go beyond protecting the right of transferring employees not to have their contracts of employment changed by reason of the transfer. In its view, the cut-off date for consultation is the transfer date. The interpretation of the Regulations proposed by AMICUS and the TGWU would be ‘unduly burdensome to transferee employers and potentially unworkable’ as they would never be free of the obligation to consult whenever they envisaged taking measures that could be seen as related to the transfer and which might affect employees who had been transferred to them.

A proposal that the matter be referred to the European Court of Justice was rejected.

This decision will be welcomed by transferee employers or those who are proposing to take on staff by way of a relevant transfer under the TUPE Regulations, as an open-ended requirement to consult post transfer could have significant commercial repercussions.