A worker is an employee within the meaning of TUPE

Background

Both Revisecatch and City Sprint are courier companies and engaged the services of Mx Dewhurst, a cycle courier, for a number of years.

Mx Dewhurst brought a claim for holiday pay/compensation under the Working Time Regulations 1998 and for failures to inform and consult under regulations 13 and 14 of the Transfer of Undertakings (Protection of Employment) Regulations (‘TUPE’) 2006. A preliminary hearing was scheduled to determine a point of law and no findings of fact were made.

Employment Tribunal

TUPE implements an EU Directive safeguarding employees’ rights when employers change. In conjunction with the Acquired Rights Directive, TUPE preserves the employment rights of employees; however, it only protects those who are recognised as employees under domestic law.

An employee is defined by TUPE as someone working “under a contract of service or apprenticeship or otherwise but does not include anyone who provides services under a contract for services and references to a person’s employer shall be construed accordingly”.

The law generally is not consistent with its use of the terms “employees” and “workers”. For example the Equality Act 2010 protects workers in the same way as employees, yet the Employment Rights Act 1996 only gives employees unfair dismissal rights.

The Employment Tribunal concluded that it is only right for the wording of TUPE to be interpreted liberally to incorporate ‘workers’ within the protection granted by it. In terms of “contract for services”, it was held that the exclusion will relate solely to those independent contractors who are not reliant on another party. To not interpret the legislation in this way would lead “to absurdity” and not implement the Acquired Rights Directive fully.

One of the reasons behind this decision was the lack of uniformity in the definition of ’employee’. To restrict the protection of TUPE to those who were originally defined as employees could restrict the potential for liability for any claims made under discrimination legislation from transferring to a new employer.

Comments

This is not a binding authority and has persuasive value only, as it is likely to be appealed. If the Employment Appeal Tribunal agrees with the Employment Tribunal’s decision, the scope of TUPE will widen to incorporate workers, also known as limb b) workers, within its protection. For this reason, it is of great importance to employers as it could have resounding effects for TUPE transfers in the future. This would add an increased administrative burden to TUPE transfers due to the need to consult workers and provide Employee Liability Information required in relation to them.

We will, of course, keep you up to date on any developments.

If you have any questions on the above and how it will affect you, please do not hesitate to get in touch with a member of our employment team.