Do the Transfer of Undertaking Regulations 2006 (TUPE) apply to Workers?
Who is a worker?
If a person working in your business on a casual basis, such as a zero hours contract, they are not employees, they are classed as ‘workers.’ Workers currently have limited employment rights, for example they do not acquire unfair dismissal rights against an employer, even after 2 years’ service. Whether workers have protected rights within the Transfer of Undertaking Regulations 2006 (TUPE) would depend upon if they come within the definition of an employee under Regulation 2(1) of TUPE. This defines an employee as, ‘any individual who works for another person whether under a contract of service…….’or otherwise,’ but does not include anyone who provides services under a contract for services.’
London Central Employment Tribunal
Whether or not a worker could fall within ,’or otherwise’ has recently been addressed by the London Central Employment Tribunal (ET) in the case of Dewhurst and Ors v (1) Revisecatch Limited t/a Ecourier City Sprint (UK) Limited. In this case three cycle couriers brought claims for holiday pay and failure to inform and consult under TUPE where they were working as workers.
Amongst other things, the ET’s decision concerned the definition of worker in section 230(3) of the Employment Rights Act 1996 (“ERA”). The definition covers those working under a contract of employment (i.e. those who are ‘employees’) and also those who undertake to perform services personally for a third party, which is not a client or customer of a profession or business operated by them.
The ET found that the definition of worker within the above fell within the scope of ‘employee’ for purposes of TUPE. This is because regulation 2(1) of TUPE was intended to confer rights and protections on a broader class of employees than those employed under a contract of employment as reflected in the words ‘or otherwise,’ thus the words should be construed to include both type of workers under the ERA.
It is important to note that this is only a first instance decision thus not binding on other employment tribunals; however, this is not the first time that an employment tribunal has reached this conclusion. In 2013 it was also accepted that workers were employees for the purposes of TUPE.
Failure to comply
Where TUPE is likely to apply getting the outcome wrong is potentially serious. The penalty for failure to comply with TUPE’s information and consultation can be, depending on the tribunal’s assessment of the employer’s default, up to 13 weeks’ pay per employee. If there is a failure on the part of the transferor (current employer) to provide employee liability information to transferee (new employer, this can lead to an ET award of at least £500 per transferring employee hence the importance for employers to seek appropriate support and guidance on such matters.
The contents of this article is intended for general information purposes only. If you would like further information on TUPE please call us on 0333 240 7208 or contact us here.
