Search

How can we help?

Icon

Employment contracts can be split between multiple transferees

UK Case law has established that TUPE can still apply to business transfers where the undertaking is transferred to multiple transferees provided the undertaking does not lose its identity. Further, TUPE can apply to service provision changes in the same circumstances provided it is possible to identity to which contractor the individuals transfer.

In the recent Belgium case of ISS Facility Services NV v Sonia Govaerts & Atalian NV, the European Court of Justic (ECJ) had to consider this point again in the context of business transfers. It held that the Acquired Rights Directive (on which TUPE is based) does not deal with multiple transferees but that the ultimate objective of the Directive is to safeguard employees’ rights and allow their contracts to continue unchanged to avoid individuals being in a less favourable position.

On this basis, it determined that in such cases it was possible for the contract to be transferred to all of the transferees in proportion to the tasks performed by the individual provided the individuals’ rights and working conditions were not adversely affected (possibly resulting in a full time contract being converted to a number of part time contracts). It would be up to national courts and tribunals to consider the practical implications of this. It further held that if this division presents a problem or is not possible and the employee is dismissed (or resigns) as a result, liability will fall to the transferee(s).

Whilst this reaffirms the existing UK position that there may be a business transfer where the undertaking is transferred to multiple transferees, the approach taken by the ECJ is very surprising and marks a significant departure from the current UK case law. The splitting of contracts will raise a number of practical issues and it’s hard to see how this approach will not be detrimental to the employee.

Louise Keenan

Associate

View profile

+44 118 960 4614

UK Case law has established that TUPE can still apply to business transfers where the undertaking is transferred to multiple transferees provided the undertaking does not lose its identity.

With the UK in the process of leaving the EU it is unclear the extent to which this will be followed by the UK. Further, the judgment only applies to business transfers and not service provision changes which are outside of the scope of the Acquired Rights Directive. Regardless it is wise for parties to try and factor this situation into their commercial indemnities where possible.

About this article

Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

Louise Keenan

Associate

View profile

+44 118 960 4614

About this article

Read, listen and watch our latest insights

art
  • 01 June 2023
  • Employment

Facts employees should know about their personal data

We previously published an article on facts an employer should know about holding personal data, so it is only fair that we also write about the other side of the coin – facts employees should know as individuals whose personal data is held by their employer.

art
  • 01 June 2023
  • Immigration

What is the Immigration Skills Charge (ISC) and how much do you have to pay?

The Immigration Skills Charge (ISC) is a levy on companies who sponsor migrant workers. This levy was imposed on 6 April 2017. The Government states that the charge has been levied to contribute towards addressing the skills gap in the local economy.

art
  • 26 May 2023
  • Employment

Avoiding discrimination in flexible working requests

The right to request flexible working is currently available to employees with at least 26 weeks’ service and is set to be extended further under new Government reforms.

art
  • 25 May 2023
  • Corporate and M&A

Management Buyout – Top 5 things to consider

A management buyout is a financial transaction in which a member of the management team purchases the company from its registered owner. MBO’s usually occur in private companies in an effort to enhance profitability and simplify strategies.

art
  • 25 May 2023
  • Employment

Carer’s Leave Bill set to become law

On 19 May 2023, the Carer’s Leave Bill had its third reading in the House of Lords, and upon receiving Royal Assent, will become law. There is not yet a date for the implementation of this bill, however it is likely that this will happen relatively quickly upon receiving Royal Assent, so is definitely one to keep an eye on.

art
  • 18 May 2023
  • Immigration

Navigating SOC Codes

When it comes to UK immigration, understanding the intricacies of the system is vital. One significant aspect of the process revolves around Standard Occupational Classification (SOC) codes. SOC codes play a crucial role in determining the eligibility for an individual to apply for a work visa, assessing skill levels, and matching individuals to appropriate job roles.