How relevant are the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) in the context of a share sale? A recent Employment Appeal Tribunal decision provides a reminder that TUPE can easily come into play when a buyer is considering what to do with its newly acquired subsidiary. In this case, the buyer's actions led to an unexpected TUPE transfer and a £3.5 million bill.
The Employment Appeal Tribunal recently confirmed that offers made directly by an employer to its employees may constitute unlawful attempts to bypass collective bargaining contrary to Section 145B of the Trade Union and Labour Relations (Consolidation) Act. The tribunal held that the fact that collective bargaining had continued in this case did not prevent the employer's direct offers from having the prohibited result.
Can an employer that has recognised a trade union for collective bargaining purposes still put an offer directly to its employees? This was addressed in a recent case in which an employer offered a pay deal directly to its employees; the Employment Tribunal found that it had bypassed the collective bargaining arrangement, resulting in a substantial financial penalty.
A recent decision of the Employment Appeal Tribunal serves as a useful reminder of how employers can fairly dismiss employees for an economic, technical or organisational (ETO) reason following a Transfer of Undertakings (Protection of Employment) Regulations transfer. The test for whether there is an ETO reason is twofold. First, the employer must establish an ETO reason, which may be relatively straightforward. However, in all cases the reason must also "entail changes in the workforce".