The Employment Appeal Tribunal in Allen and others v Morrisons Facilities Ltd June 2014, has confirmed that employees affected by the proposed transfer of business have no right to sue the proposed buyer direct for the buyer’s failure to provide proper information about the measures it envisages taking in relation to them.
Furthermore, the buyer has no obligation to provide information direct to such employees about the measures it envisages taking.
Employees must bring a claim for the buyer’s failure as part of a claim against the seller for failing to properly consult them about the proposed transfer.
A seller has a defence that the buyer failed to provide it with full information. To avail itself of the defence, it must first apply to the employment tribunal for the buyer to be joined as a party to the tribunal proceedings.
An employee is entitled to compensation of up to 13 weeks’ pay.
1. The buyer of a business must provide to the seller information about the transfer including the measures it envisages taking in relation to employees transferring with the business regulation 13(4) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE 2006”).
2. The buyer must provide the information at such a time as will enable the seller to comply with its obligation under Regulation 13(2), TUPE 2006 to consult with its employees about the transfer.
3. The obligation is wide. ‘Measures’ can include even a change of pay date.
4. The duty to consult is also wide. It applies to all employees affected by the sale of the business: not just to those whose employment is transferring.
5. A buyer may also have a duty to consult with its existing employees affected by the purchase of the business.
6. The buyer’s obligation must not be confused with the seller’s separate obligation to provide it with details about transferring employees (regulation 11, TUPE 2006).