An employee can TUPE transfer to multiple employers
Until now, the leading UK TUPE case of Kimberley Group Housing meant that an employee’s contract of employment should often transfer to the employer which takes over the majority of the activities to which an employee was assigned. This case challenges that: an employee whose work transfers to multiple employers can transfer to multiple employers.
Ms Govaerts was an employee of ISS and she worked as a project manager across the city of Ghent in Belgium. There was a tender and the work was split into three lots. ISS lost the tender, with two lots being won by Atalian and the other to Cleaning Masters.
ISS insisted that Ms Govaerts would transfer to Atalian, but they disputed the transfer, resulting in Ms Govaerts bringing a variety of claims against both ISS and Atalian. ISS was successful in their appeal, but the matter was referred to the European Court of Justice (ECJ) to determine if her employment could be split between Atalian and Cleaning Masters.
The ECJ had to consider:
- Could Ms Govaerts’ employment be split between the two transferees, Atalian and Cleaning Masters; or
- Would Ms Govaerts’ employment transfer to the transferee according to where/on what she mostly worked; or
- Would Ms Govaerts not transfer at all.
The ECJ confirmed there was a transfer (ruling out option 3) but expressly highlighted that the Acquired Rights Directive does not address the question of multiple transferees, though it’s primary function is to “safeguard the rights of employees”.
The ECJ ruled out option 2 (the UK Kimberley position) as to do so would mean that the transferee inherited a full time employee but whose role with them could only be part time.
Option 1, was favoured as that would protect the employee as well as protect the interests of the transferees. The ECJ though left it for the national courts to determine the extent and nature of the split and if a split (and transfer) was impossible, they expressly highlighted that the transferee would be responsible for any termination of the employment.
This upends UK practice in TUPE transfers and creates substantial practical difficulties. It contradicts Kimberley as well as other cases that suggest that where the services undertaken by a provider are so fragmented, TUPE may be unable to properly apply at all (Clearsprings).
This case imports a substantial layer of uncertainty in TUPE transfers. How many employees will relish or even be able to properly operate multiple part time employments for competing employers? It is quite likely to lead to employees claiming that they will suffer a detriment in the TUPE transfer and bring constructive dismissal claims for that detriment.
In the meantime, the Employment Tribunal and UK courts will need to wrestle with the impacts of this case on existing caselaw and the UK extension to TUPE for Service Provision Change (SPC) transfers – a change in contractor can often be a traditional transfer as well as SPC. This case may not impact exclusively SPC transfers at all. Then there is Brexit – to what extent will the UK go on to depart from ECJ rulings?
In the meantime, those bidding for contracts should try to ensure that where they have the benefit of a contractual relationship with the tenderer, they can take the risks of detriment claims and this case fully into account.