Mistaken Belief and Employer Obligation to Consult Under TUPE

The Court of Appeal has held in Royal Mail Group Ltd (RMG) v Communication Workers Union (the Union) [2009] EWCA Civ 1045 that an employer who incorrectly but genuinely believes that employees will not transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) will not automatically be in breach of its information and consultation obligations by failing to inform employees of the correct legal position. This is because the information and consultation obligations under Regulation 13 of TUPE require that an employer only express what it genuinely believes to be the legal, social and economic implications of a proposed transfer.

RMG entered into a franchise arrangement with WH Smith to sell off various post office services. While the Union was of the view that employees would automatically transfer to WH Smith under TUPE and that RMG was therefore subject to information and consultation obligations in relation to the proposed transfer, RMG was of the view, based on legal advice that it had taken, that TUPE did not apply. The Union argued that RMG was mistaken in its belief that TUPE did not apply and was consequently in breach of its information and consultation obligations.

The Court of Appeal upheld the Employment Appeal Tribunal's decision and held that although it was a powerful argument that employees should be informed with certainty of the legal implications of their situation, it does not follow that the employer should effectively have to warrant the accuracy of its view of the law.