Is there a drastic change to TUPE on the horizon?
An Employment Tribunal Judge, in a rather a surprising decision in the recent case of Dewhurst v Revisecatch and City Sprint, has held that those traditionally labelled under employment law as “workers” are entitled to the benefit of the provisions of Transfer of Undertakings (Protection of Employment) Regulations (“TUPE”), as well as those who are traditional “employees”.
There is a recognised hierarchy of employment status, ranging from self-employed contractor to worker to employee, each of which comes with a greater protection of employment rights. The traditional view is that only those who are classed as employees, and who sit at the top of this hierarchy, have the benefit of the rights available under TUPE. Broadly speaking, TUPE applies on the transfer of a business, and the rights which are granted under TUPE to those employees who would be affected by the transfer include: -
- The protection against dismissal, where the dismissal is as a result of the transfer;
- The protection against having their terms of employment changed as a result of the transfer; and
- The right to be consulted about the effects of the transfer.
The potential impact of the judgment in Dewhurst could be far reaching, by allowing a large number of “workers” (who do not meet the strict test of being classed as an “employee”) to reap these benefits under TUPE. This means that many more individuals will be protected on a business transfer, which could have a significant bearing upon the commercial decisions involved in buying and/or selling a business, and also the costs of going through the purchase/sale process.
Currently however, the decision is not binding as it originated in a first instance Employment Tribunal. There is scope for the Respondents in the case to appeal the decision, and it will be very interesting to see what happens if they do. The current decision is very detailed and coherent, and does follow in a lengthening line of case law which seeks to grant individuals as much protection under employment law as can be afforded.
Whilst this should not change how you approach a business transfer currently, our advice is to watch this space. If you require any further advice, or have any concerns in relation to this issue, please do not hesitate to contact one of our employment law experts.
Tom can be contacted by email: firstname.lastname@example.org or please call 01522 512345.