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#9729 - Tupe Model Answer - Employment Law

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IS THERE A RELEVANT TRANSFER?

  • Business transfer Reg 3(1)(a):

    • Two limb test:

      • Is there an economic entity comprising of an organised group of resources?

        • This is a question of fact for the Tribunal who must apply the Cheeseman factors:

        • Consider whether the business has its own workforce, premises, assets, equipment, customer base, goodwill etc.

        • Apply briefly

      • Has that entity transferred?

        • Spijkers states that the decisive criterion is whether the entity retains its identity post-transfer; 7 factors in deciding this (should be considered in conjunction):

  1. The type of undertaking or business – is the business labour intensive or dependent on its assets? E.g. window fitting would be labour intensive as a lot of importance is attributed to the skills of the workforce

  2. The transfer of tangible assets – have a significant amount of assets transferred?

  3. The value of intangible assets (goodwill) – goodwill, skills and experience of workers

  4. Whether the majority of staff are being taken by the new employer – ECM v Cox states that it is not fundamental that the majority of staff transfer – it must however be a significant number

  5. The transfer of the circle of customers – is customer list transferred?

  6. The degree of similarity between activities before and after the transfer – is similar business being carried on?

  7. The duration of any interruptions in those activities – is the interruption minimal?

  • Service provision change:

    • Three types:

      • Contracting out Reg 3(1)(b)(i) – Where activities cease to be carried out in-house and an outside contractor comes in to carry out those activities

      • Second generation contracting Reg 3(1)(b)(ii) – Where a contractor is carrying out activities and the organisation changes the provider of those activities to a different contractor

      • Contracting in-house Reg 3(1)(b)(iii) – Where a contractor is carrying out activities and the organisation decided to run such activities in-house

    • Pre-conditions which must be satisfied:

      • Reg 3(3)(a)(i) – Immediately before the service change there is an organised group of employees whose principal purpose is to carry out the activities

      • Reg 3(3)(a)(ii) – Client intends that following the service change, the activities will be carried out by the transferee (not a single specific task or short term duration)

      • Reg 3(3)(b) – Activities do not consist mainly of the supply of goods; the service element must be predominant (Pannu and Others v Geo W King and Others)

  • If there is a relevant transfer, TUPE applies
Use the flowcharts on pages 259 and 260 of the book in conjunction with this example
EXAMPLE 1 – TRANSFEREE HAS ASKED TRANSFEROR TO DISMISS AN EMPLOYEE AS HE IS SURPLUS TO THEIR NEEDS – SO DISMISSAL BEFORE TRANSFER WITH NO ETO REASON

Scenario: Keith Mayer is 45 and had worked for Walker’s Glass for 15 years as a supervisor. He was earning 480 per week gross, 320 per week net. Keith was dismissed by Walker’s Glass before PFL took over the business. PFL has asked Walker’s Glass to dismiss Keith as he was surplus to requirements. Keith was given 4 weeks’ wages in lieu of notice. All the employees at Walker’s Glass were entitled to statutory minimum notice.

  1. Was there a relevant transfer? – See overleaf

  2. Effect of relevant transfer – The dismissal is effective (Reg 4) but liability for the claim may transfer to the Transferee (PFL) under Reg 4(3)

  3. Unfair dismissal eligibility – 1 years’ continuous employment if employment commenced before April 6 2012; 2 years’ continuous employment if employment commenced after April 6 2012 – here Keith has more than 1 years’ service so is eligible for an unfair dismissal claim

  4. Was the dismissal because of the transfer or for a reason connected with the transfer? (Consider both)

  • If the tribunal deem that the dismissal was ‘because of the transfer’: The dismissal will be automatically unfair under Reg 7 and Keith’s claim will be against the Transferee (PFL) under Reg 4(3)

  • If the tribunal deem that the dismissal was ‘connected with the transfer’: The dismissal will be automatically unfair under Reg 7 unless there is an ETO reason entailing a change in the workforce (Berriman states that this means a change in number or functions)

    • Hynd case states that the ETO reason entailing a change in the workforce must relate to the ongoing conduct of the organisation making the dismissal. Therefore there is no genuine redundancy situation here as PFL have asked Walker’s Glass to dismiss Keith for reasons not connected to PFL’s business

    • Therefore there is no ETO reason entailing a change in the workforce and the dismissal is automatically unfair under Reg 7 and Keith’s claim will be against the Transferee (PFL) under Reg 4(3)

  • Remedies for unfair dismissal:

    • Reinstatement

    • Re-engagement

    • Compensation

      • Basic award

Factor Age
1.5 Each year of employment after the age of 41
1 Each year of employment between the ages of 22 and 40
0.5 Each year of employment under the age of 22

  • Age factor x length of service x gross weekly pay

  • Cap on the maximum amount of a week's pay is 464; cap on basic award is 13,920; cap on...
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