EAT on 20th May 2004, reported at [2005] IRLR 12

NOTES

  • Astle & ors v Cheshire County Council & anor EAT on 20th May 2004, reported at [2005] IRLR 12
  • The full text judgment in this case is available free of charge on the EAT website.

    When a business is transferred to a new proprietor but the employment contracts of employees engaged in the business are not transferred the question can arise as to whether those employment contracts were automatically transferred by operation of law. This automatic transfer will take place only if the transaction counts as a "transfer of an undertaking" within the meaning of the 1981 TUPE regulations (SI 1981/1794) - see notes at Transfer of business or undertaking/a general introductory note . Employees and ex-employees need to know the answer to this question in order to know against whom to raise any unfair dismissal or other employment related claims.

    In deciding whether there was a "transfer of an undertaking" within the meaning of the 1981 TUPE regulations, a relevant factor to be taken into account can be the very fact that employment contracts of staff were (or were not) transferred. This inevitably involves circular arguments. A way out of the circular arguments has been provided by the courts in several cases such as this one which are:

    Authority for the propositions that:-

    1. in cases where the question of whether or not there was a "transfer of an undertaking" depends on whether the workforce was or was not transferred, it is legitimate to consider the reasons for not transferring the workforce. If it is established that the principal reason for the transferee not taking on the workforce was something other than avoidance of TUPE then the fact that he did not take on the workforce will be irrelevant in answering the question;
    2. on the other hand if avoidance of TUPE was the reason or the principal reason for the transferee not taking on the workforce then that will be a relevant factor, and may be conclusive, in deciding whether there was a "transfer of an undertaking" within the meaning of the TUPE regulations;
    3. if it is raised as an issue, the employment tribunal will not only be entitled but will be obliged to consider why the workforce was not transferred.

    For relevant general notes see Transfer of business or undertaking/who to sue? and/or Transfer of business or undertaking/what is an ''undertaking''?


    FINISH>
    prepared Jan2005.