Royal Mail Group Ltd v Communication Workers Union

Regulation 13(2)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 does not impose strict liability or warrant the legal accuracy of information supplied by an employer. The employer must inform representatives of the legal, economic and social implications as the employer genuinely believes them to be.

The employer must nevertheless have considered the implications and communicate a considered view. A later finding that the employer’s view was legally wrong does not, by itself, establish a breach. The statutory categories are interrelated, and genuine uncertainty may be disclosed so that it can be addressed in consultation.

Royal Mail Group Ltd transferred post-office businesses to W H Smith. The Communication Workers Union contended that some employees would transfer automatically under regulation 4 and that Royal Mail had breached regulation 13(2)(b) by failing to inform the union of that legal implication.

The Employment Tribunal found that Royal Mail had not genuinely believed that no automatic transfer would occur and declared a breach. The Employment Appeal Tribunal, in UKEAT0338/08, held that a genuine but mistaken belief could satisfy regulation 13(2)(b), allowed Royal Mail’s appeal and remitted the matter. The central issue was whether the information duty required objectively correct information or a genuine statement of the employer’s considered view.

The Court of Appeal unanimously dismissed the union’s appeal.

1. Nature of the duty. Regulation 13(2)(b) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 is not expressed as a strict-liability obligation or a warranty of legal accuracy. The employer must provide the legal, economic and social implications of the transfer as the employer genuinely believes them to be.
2. Considered view required. An employer cannot simply assert a belief without considering the legal implications. The information must represent a considered view. A genuine belief may therefore be unavailable where the employer has failed to address the issue at all.
3. Interrelated information. The provisions concerning the fact, date and reasons for the transfer, its implications, and envisaged measures are interrelated. Economic and social implications may depend on the legal implications, while measures may depend on all three. The statutory scheme permits an employer to disclose that the legal position is uncertain, allowing the issue to be debated in consultation.
4. Automatic transfer background. The court recognised the automatic-transfer regime under regulation 4, subject to an employee’s right to object. The information duty applies to affected employees even where the employer contends that no contracts will transfer.
5. Other matters. The special-circumstances qualification in regulation 13(9) was not engaged; the Employment Tribunal’s finding that no special circumstances existed was not appealed. The compensation provisions were noted to have a penal, rather than solely compensatory, purpose.

1. Court of Appeal (Civil Division). The union’s appeal from the Employment Appeal Tribunal was dismissed.
2. Employment Appeal Tribunal. In UKEAT0338/08, handed down on 3 December 2008, the EAT allowed Royal Mail’s appeal from the Employment Tribunal and remitted the information and consultation issue to a fresh tribunal.
3. Employment Tribunal. On 17 June 2008, the tribunal found that Royal Mail had not genuinely believed that no automatic transfer would occur and had breached regulation 13.