TUPE can apply when there is only one employee
TUPE applies even if there is only one employee. A single employee is “an organised grouping of employees” which means that the process and protections under TUPE will operate. There are ramifications especially for smaller businesses.
The decision highlights that one employee can amount to an ‘organised grouping’ for the purpose of TUPE and tempting as it may be, TUPE should not be overlooked.
The Court has provided assistance on when employees or a single employee can transfer under the TUPE when there is a service provision change under a collaboration agreement, outsourcing or framework agreement. Companies should examine whether if they will be providing an identical service that is essentially the same as those undertaken by the previous company or contractor TUPE will apply.
TUPE transfer: background
TUPE applies to a ‘relevant transfer’. This can be either:
• a transfer of a business; or
• a service provision change when an employer re-assigns a contract or brings the work back in house.
There are certain requirements that must be incurred for a service provision to take place and one of these requirements is that there must be ‘an organised grouping of employees’ of which the principal purpose is the carrying out of the activities concerned for the client on their behalf.
An example of where service providers change would be the decision to outsource software development to a new provider, but then subsequently reassigning the contract in question or bringing the work back in house.
Compensation employees can claim under TUPE
An employment tribunal can award each affected employee 90 days gross pay under the TUPE regulations. The claim must be brought by the employee within 3 months of the dismissal. The award is punitive rather than compensatory. The amount depends on the seriousness of the employers breach, not the employees’ loss.
The Facts of Rynda
Drivers Jonas initially employed Ms Rhjinsburger (‘Ms R’) as a commercial property manager. She had single responsibility for managing and looking after a Dutch property group for Rynda Group, the client. Previously, she had looked after a collection of German properties , but now focused exclusively on managing the group of Dutch properties. Ms R worked individually and not part of a team.
Deloitte LLP acquired Drivers Jonas on April 2010. The company became Drivers Jones Deloitte LLP (‘DJD’). Ms R transferred to the new company DJD. Noot long afterwards, DJD decided to withdraw from managing the group of Dutch properties. In December 2010, Ms R’s employment ended. Before Ms R’s employment with DJD ended, Rynda organized their UK Subsidiary to take over its property management. Ms R joined the UK Subsidiary in January 2011, carrying out identical responsibilities and obligations as before.
Issues subsequently arose between Mr R and the UK Subsidiary and she was dismissed. Ms R wanted to sue Rynda’s UK subsidiary for unfair dismissal. In order to do so she has to illustrate she had the sufficient length of continuous employment and to show this she had to prove that she transferred from DJD to Rynda’s UK subsidiary under TUPE.
Rynda’s UK subsidiary put forward the argument that Ms R did not establish ‘an organised grouping of employees’ for the purposes of TUPE.
The Decision in Rynda
The Court found there had been a service provision change under TUPE. Accordingly Ms R had transferred from DJD to Rynda’s UK subsidiary. In reaching its decision, the Court directed a four stage test in cases of this type.
Four stage test to establish if TUPE applies:
• Identify the service which was provided by the client.
• Look and identify the activities that employees perform when providing that service.
• Identify the employee or employees who carry out the service.
• Asses whether the principal purpose of those employees or employee is carrying out those listed activities.