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Does TUPE apply to workers?

Associate Solicitor, Helen Scott

The London Central Employment Tribunal in the case of Dewhurst v Revisecatch Ltd and CitySprint has considered whether the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) apply to workers as well as employees.

Background

The three Claimants were engaged as bike couriers by CitySprint (“Respondent 1”) until 31st January 2018. After Respondent 1 failed to secure a contract for the provision of courier services to a private healthcare provider, the Claimants became engaged by Revisecatch Ltd (“Respondent 2”) from 1st February 2018.  The Claimants brought claims to an Employment Tribunal against both Respondents, alleging that they had been underpaid holiday pay and that Respondent 1 had not consulted them about their transfer under TUPE to Respondent 2. It was considered by the Tribunal at a preliminary hearing whether “workers” could fall within the scope of TUPE.

The Law

Up until now, the established position has been that employees, and not workers, have certain rights under TUPE which apply where there is a relevant business transfer, for example where part of a business is being sold, or a service provision change, such as a change of contractor.

Where TUPE applies, it imposes certain obligations to inform and consult employees regarding the transfer, and employees are entitled to transfer to the new employer on the same, or better, terms of employment. Any employees who are dismissed because of the transfer are considered automatically unfairly dismissed, unless the employer can show that it was for an economic, technical or organisational reason.

Decision

The Tribunal held that even though the Claimants were workers, and not employees, that TUPE would still apply because the definition of an ‘employee’ under TUPE is “any individual who works for another person whether under a contract of service or apprenticeship or otherwise but does not include anyone who provides services under a contract for services…”.

The Tribunal concluded that TUPE was intended to confer rights and protections on a broader class of individuals than those employed on contracts of employment or apprenticeship only. It held that the words ‘or otherwise’ should be interpreted to include workers, otherwise this would not be consistent with the EU legislation, the Acquired Rights Directive, that led to the introduction of TUPE.

Comment

Although this is only a first instance decision, which is not binding on other courts, it is a potentially important one. Should the Respondents appeal, then the Employment Appeal Tribunal would have to consider this question. If the EAT agrees with the Tribunal, this could have a huge impact on employers, especially those that deal with TUPE issues frequently, in terms of significantly increasing those potentially covered by TUPE and potential liability.

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