28th November 2019

Legal Issues – Has TUPE been transformed?

An employment tribunal in England has reached a pretty revolutionary conclusion regarding the extent of the TUPE legislation.

The three claimants were cycle couriers. They were engaged by City Sprint until early 2018, at which point their services were used by Ecourier following a decision by a major client to change their courier service providers. The claimants made various claims, including a claim for holiday pay, against both City Sprint and Ecourier. The preliminary question that the tribunal had to determine was whether the claimants were “employees” for the purposes of the TUPE legislation, such that liability if established could in theory transfer to Ecourier. It is worth noting that one of the claimants had made a previous tribunal claim where the tribunal had held that that claimant was a worker rather than an employee.

Readers will no doubt be aware that there have been a number of cases in recent years wrestling with the question of the employment status of gig economy workers. In many of those cases, the answer has been that the individuals concerned were workers as opposed to employees. The distinction is important, since the different employment status attracts different employment law protections. Workers are entitled to holiday pay; but do they fall within the definition of “employee” for the purposes of TUPE?

That definition of an “employee” is any individual who works for another person, whether under a contract of employment or apprenticeship “or otherwise”. There was previously no real indication of what “or otherwise” meant. The tribunal in this case analysed the differing definitions of employees in various pieces of UK legislation as well as the underlying European directive behind TUPE, and came to the conclusion that the definition of “employee” in the TUPE legislation was clearly intended to confer rights and protections on a broader class of employees than those employed under a contract of employment or apprenticeship. In other words, TUPE applies to workers as well as standard employees. Only those who are true independent contractors will not be protected by TUPE.

This is only an employment tribunal decision, and of course is likely to be appealed given its significance. But for the time being, it opens up the possibility of a huge change in the applicability of the TUPE legislation.

If you have any questions on any of the issues raised in the above article, please contact Alan Sutherland.

28th November 2019