Employment

Prior to a TUPE transfer, there is a duty to inform and consult with appropriate representatives of the employees affected by the transfer. In I Lab Facilities Ltd v Metcalfe, the EAT considered which employees are ‘affected employees’.

I Lab (UK) Ltd provided services to the film and television industry. It was made up of two distinct businesses (referred to here as Part A and Part B), with employees employed at different premises and undertaking different work at different times. After it went into liquidation, Part A was sold to another group company while Part B was closed down by the liquidator. This was despite the fact that the employees in Part B had been told that the purchaser of Part A would take some of them on. Several former employees brought tribunal proceedings arguing that I Lab (UK) Ltd had breached its TUPE information and consultation obligations.

The EAT decided that the claimants were not ‘affected employees’. They were not ‘affected by the relevant transfer by being excluded from it’. Neither were they ‘affected employees’ because of ‘having been informed that they would be part of it’.

However, the EAT emphasised that it was not saying that employees assigned to the part of a business which does not transfer can never be ‘affected employees’.

An employee will not usually be ‘affected’ just because the part of the business in which they are employed is made less viable with the sale of the other part. However, if there is something more, such as their role including some duties for the transferring part, then they may well be. In the EAT’s view, ‘a proposed transfer may well affect such employees if they do some work in or for the undertaking (or part) whose transfer is proposed’.

Julie Keir

Practice Development Lawyer at Brodies LLP
As a Practice Development Lawyer Julie is responsible for developing and maintaining Brodies Workbox, our award-winning online HR and employment law resource.
Julie Keir