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Employment Tribunal decides that TUPE applies to ‘workers’ not just employees

Under TUPE, individuals who are ‘employed’ by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer (whose contracts would otherwise be terminated by the transfer) will transfer to the transferee. The definition of ‘employee’ for this purpose is wider than that used for other forms of employment protection as it includes any individual who works for another person ‘whether under a contract of employment, apprenticeship or otherwise’.

It is clear that the definition covers employees and apprentices but there has always been a question mark over workers. Because the Acquired Rights Directive (on which TUPE is based) refers to there being a ‘contract of employment’ or ‘employment relationship’ many employers have taken the view that (in the absence of any case law on the point) the definition of employees is not intended to cover workers.

An argument was made that workers work under a ‘contract for services’ which is expressly excluded from TUPE protection.

However, in the recent case of Dewhurst v Revisecatch Limited t/a Ecourier & City Sprint (UK) Limited the Employment Tribunal has held that a ‘worker’ is included within this definition.  It highlighted that the wording ‘or otherwise’ clearly intended to confer rights and protections across a broader class of employees than those engaged via a contract of employment or apprenticeship.  It also felt that the words ‘employment relationship’ in the Directive were properly to be read as embracing this group and noted that domestic law protected this group as ‘employees’ for the purposes of other employment law protections, such as those prohibiting discrimination. An argument was made that workers work under a ‘contract for services’ which is expressly excluded from TUPE protection.  However, the Tribunal felt that this exemption was only intended to apply to genuinely self-employed persons.

This is a Tribunal decision and, as such, it is not binding on other Tribunals. However, it is expected that the decision will be appealed and so we will hopefully have appellate authority in the near future.  If the appeal courts uphold the finding this could have significant implications for organisations as workers will need to be included in any TUPE process including with regards to informing and consulting (failure to comply with which can carry a significant penalty of 90 days gross pay per employee/worker).  This is also likely to throw up many practical issues, for example, employers may have to run much wider election processes to ensure workers are sufficiently represented and will need to have processes in place to ensure they adequately capture all workers that they engage.

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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.

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