TUPE

The CJEU was asked whether employees assigned to an undertaking which is fragmented upon transfer can be transferred to multiple transferees?

Conclusion – yes they can be transferred to multiple transferees in proportion to the tasks they performed, but with some caveats:

1. The division of the contract must not result in working conditions which are worse than pre-transfer.
2. If the conditions are worse, then the transferee will be liable for any resulting termination of employment, even where it is the employee who resigns.

This changes makes it even more important for the transferor and transferee to be very clear in the provision of employee liability information and for the due diligence conducted by the transferee to be thorough, with full disclosure prior to completion about any proposed changes to the contract for those who are to transfer.  The consultation period prior to transfer becomes critical with this decision.

(Please note, this only concerns regulation 3(1)(a), not regulation 3(1)(b) – service provision changes – where a contract is outsourced to a new company and the staff follow, or there is a retender of the contract and the employee working under the contract follow it or where the service is brought back in house)