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Transfer of Undertakings (TUPE) and Workers
An important development is taking place in the application of TUPE. When a contract transfers, TUPE means that employees assigned to that contract will transfer as well. So the successful bidder in a tender, or purchaser of a business, gets the employees associated with it, and the liabilities that come with them.
A Judge in London this week has ruled that not only does this apply to employees, but that TUPE applies to Workers as well.
Those who are genuinely self-employed will remain outside of the scope of TUPE. The ruling indicates that in future, Workers will be covered. That is those staff who often think they are self-employed, but are not. People like the Pimlico Plumbers, those working in the ‘gig-economy’ such as Deliveroo and UBER drivers, and car washers in supermarket carparks.
The risk associated with this is that the new employer will pick up liability for unpaid holidays and national minimum wages as well as the less common claims for discrimination made by Workers. This may pose a large financial risk to businesses taking over contracts or buying other businesses who might pick up liabilities that they had not even considered.
At present, this case is only a judgement by an Employment Tribunal, and has not been tested in a higher court. However, the Judgement is dated 26th November and the losing employer in this case has 42 days to appeal. The smart money is on an appeal, but this could be indicating the direction of travel for TUPE law.
The case itself is called Dewhurst and Others v Revisecatch Ltd and City Sprint (UK) Ltd and is not available on line.