January 29, 2016

Transfer to Multiple New Employers Can Amount to TUPE Transfer

In Hyde Housing Association Ltd and another v Layton UKEAT/0124/15, the Employment Appeal Tribunal (EAT) considered whether a transfer to multiple new employers could amount to a TUPE transfer.

Mr Layton was employed as a decorator by Martlet Homes Ltd (Martlet). Martlet became a subsidiary of a group of companies, the Hyde Group, but continued to be Mr Layton’s employer. Subsequently, the Hyde Group wished to restructure its operations. As part of this process, Mr Layton was offered a new employment contract providing that he would be employed by all the companies in the Hyde Group on a joint and several basis. Mr Layton refused to sign the new contract but continued to work in the same team, carrying out similar work and reporting to the same management. The Hyde Group dismissed him and offered to re-engage him on the proposed new terms. Mr Layton accepted the new terms but claimed his dismissal was unfair.

The first issue to be determined was whether Mr Layton’s employment had transferred from Martlet to all of the companies within the Hyde Group under TUPE. While the EAT thought that a transfer to multiple employers could amount to a TUPE transfer, it found that there had been no such transfer in this case. This was because there had been no change in the identity of his employer: Martlet had remained Mr Layton’s employer throughout. The fact that Martlet’s liability had become joint and several was irrelevant.

Although employment contracts with multiple employers are relatively rare outside the housing market, this decision is a helpful reminder of the key principles applicable to TUPE transfers. However, it should be noted that Mr Layton has been given leave to appeal, and we will keep you updated of any developments in this regard.

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