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21-08-2013

TUPE is a bit of a pet hate for businesses and employment lawyers alike. A recent case has demonstrated the importance of getting proper advice.

InĀ Country Weddings v Crossman UKEAT/0535/12, the EAT held that the Employment Tribunal does not have the power to apportion liability between the outgoing and incoming employer for failure to inform and consult under TUPE.

Ms Crossman brought a claim for failure to inform and consult under TUPE. It seems that the employers either ignored TUPE or failed to recognise that it existed as there was a total failure to inform and consult in relation to the transfer of her employment. Her claim was successful and she was granted compensation which the Tribunal ordered the new employer to pay.

On appeal, the EAT held that the Tribunal had got this wrong as TUPE specifically provides that liability for such an award is joint and several between both the outgoing and incoming employer. This means that both are equally liable for the award and the claimant can pursue either the old or the new employer for payment. The paying employer can then pursue the other in the County or High Court for a contribution to its share of the liability under the Civil Liability Contribution Act, but the apportionment of liability is not a matter for the Tribunal.

Moral of the story. If you are involved in the sale or the transfer of a business where there are employees, make sure that suitable warranties and indemnities are included in the sale agreement. The purchaser often has little involvement in any consultation process, but is equally liable for any claim for compensation. In commercial transactions, employment issues are sometimes left to the last minute to be dealt with meaning it is difficult to ensure that TUPE issues are managed properly. Whilst the paying employer can in theory look to the non paying party for a contribution, in most cases the additional legal costs are going to make this an unattractive option.

Sarah Rushton (srushton@moonbeever.com)

Partner

This is intended for general information only and should not be considered as giving advice in relation to any individual case nor be taken as applying to any particular case. No liability is accepted for any such use of the information.

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