InsightsInsight - Employment & HR - POSTED: October 27 2015
TUPE in the manufacturing industry
The TUPE Regulations provide protection of employment for employees when there is a relevant transfer and as more manufacturing businesses merge or take over other companies, TUPE becomes an ever more crucial concern.
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Two types of transfer
The Regulations provide for two different kinds of relevant transfer. Firstly, where there is a transfer of an organised grouping of resources; this will typically apply when an ongoing business is sold. Secondly, a service provision change such as where an organised grouping of employees carries out activities on a customer’s behalf which will in future be carried out by another contractor. Only those employees assigned to the organised grouping of resources or employees will have the protection of the Regulations.
What does assigned mean?
The Regulations simply state that assigned means assigned other than on a temporary basis. Recent case law dealing with service provision changes provides some further guidance. Firstly, it is necessary to determine whether there is an organised grouping of employees.
In one case it was held there was no organised grouping of employees when warehouse workers just happened to spend most of their time dealing with one client’s business because they worked on a particular shift. Here, the employees were organised as to their shifts, not as to a particular customer.
It is only when an organised grouping of employees has been established that the question of assignment falls for consideration. It is not only the time spent by an employee on a particular activity that has to be taken into account; a close analysis of the circumstances is necessary.
In another case, a number of employees were laid off under a working rule agreement. When the work they had been doing was awarded to another contractor, the court held that they remained an organised grouping of employees and remained assigned to it. According to the court, a temporary absence from work should not deprive the employees of their rights.
In another case, it was held that an employee who had been permanently off work sick for over 5 years, with no indication that he would be returning, was not assigned. The court held that there must be some degree of participation or expectation of future participation in carrying out the relevant activities.
These cases illustrate the uncertainty that can exist in any particular situation. Close regard must be had to all the facts and circumstances. Given the complexity of the Regulations and their application, it is strongly recommended that legal advice is taken in individual cases.
Cases referred to:
London Borough of Hillingdon v Gormanley  UKEAT/0169/14
Eddie Stobart Ltd v Moreman  I.R.L.R. 356
Inex Home Improvements v Hodgkins UKEAT/0329/14
BT Managed Services v Edwards UKEAT/0241/14
This content is correct at time of publication
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