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Published 6 January 2015
In this case the EAT considered an employment tribunal's decision on whether a group of managerial employees were assigned to the organised grouping of employees who transferred, under the service provision change provisions of TUPE.
The Claimants, Robert Gormanley, his wife Anne and his son Graham, all worked for RG Gormanley Ltd (RG). Robert was also a director, and Anne was the company secretary. RG initially did repair and maintenance work for various clients, but from 2008 it worked solely for the London Borough of Hillingdon (Hillingdon) under a number of contracts, the last of which was due to terminate on 31 March 2013. On 21 November 2012 Hillingdon wrote to RG stating that it would not be given any further work under the contract. Hillingdon subsequently told RG that TUPE did not apply. Having taken legal advice, RG asserted that TUPE applied and listed the 17 employees (including the 3 Claimants) that would TUPE transfer to Hillingdon. On 24 December some of the employees (but not the Claimants) went to Hillingdon's premises and were turned away. Anne did not receive work or pay from RG after 20 December 2012. Robert and Graham were made redundant by RG on 9 August 2013. They were paid by RG up to that date. In May 2013, Hillingdon announced proposals to make redundancies, reducing 14 management posts in the repairs department to seven. Those redundancies took effect in October 2013.
All RG's employees brought claims in the tribunal. At a pre-hearing review it was held that there was a TUPE transfer from RG to Hillingdon on 21 November 2012. The claims against Hillingdon were then settled, except those being brought by the Claimants.
An employment tribunal held that the Claimants were assigned to the organised grouping of employees and so TUPE-transferred to Hillingdon. It awarded them compensation for unfair and wrongful dismissal and also for failure to inform and consult under regulation 13 of TUPE.
Hillingdon appealed to the EAT, which allowed all aspects of Hillingdon's appeal and remitted the case to a different employment tribunal. Of most interest was the appeal in respect of whether the Claimants were assigned to the organised grouping of employees who transferred.
The EAT held that the employment tribunal had not decided if any particular employees were assigned to the organised grouping, which was a separate question from whether there was an organised grouping. The EAT held that the tribunal had erred in failing to consider the contractual duties of each claimant and their role in RG's organisational structure, including whether there was a distinction between managerial staff and other employees. In particular, Robert and Graham continued to be employed for more than six months after the Hillingdon contract had been lost, suggesting that had another client come in they would have continued in employment. Information on their roles could be obtained from their contracts, especially their job description or statement of duties, and the tribunal should have considered what duties the Claimants could be called on to perform under their contracts, as well as those they were actually performing at the point the contract was lost. The tribunal should have considered how the Claimants' work was organised when RG had more than one client. It therefore set aside the tribunal's decision that the Claimants were assigned to the organised grouping.
This case illustrates how easy it is to go wrong when deciding which employees transfer on a service provision change. Tribunals should consider how the work was organised when the service provider had more than one client and what the relevant employees were required to do under their contracts. Ensuring client teams are clear and employment contracts are updated to reflect what an employee is doing, will make it easier to establish who is assigned to the transferring undertaking.
London Borough of Hillingdon v Gormanley and others
London - Walbrook
+44 (0)20 7894 6566
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