Todd v Strain & Ors (Transfer of Undertakings : Consultation and other information)

Under the Transfer of Undertakings (Protection of Employment) Regulations 2006, the duty to inform employee representatives is distinct from the duty to consult. The duty to inform therefore arises even where the employer envisages no measures requiring statutory consultation. A “measure” is a deliberate action, step or arrangement by the transferor beyond the inevitable consequences of the transfer. It need not disadvantage employees. Compensation must be just and equitable having regard to the seriousness of the default, and the maximum award should not be applied mechanically where some information was given or the measures were of limited significance. A transferee is jointly and severally liable with the transferor for compensation under regulation 15(8)(a).

The owner of a care home sold the business to Care Concern, giving rise to a relevant transfer under TUPE. Employees brought claims against the transferor for failures to inform and consult appropriate representatives and to arrange their election, and against the transferee under regulation 15(9).

The Employment Tribunal upheld the claims against the transferor and awarded each claimant 13 weeks’ pay, but dismissed the claim against Care Concern. The transferor appealed liability and compensation, and the claimants appealed the dismissal of the claim against Care Concern. The central issues were whether the duties to inform and consult were separate, whether transitional payment arrangements amounted to measures, what compensation was just and equitable, and whether the transferee was jointly liable.

1. Liability. The appeal against the finding of breach was dismissed. Regulations 13(2) and 13(6) impose distinct obligations. The opening words of regulation 13(2) do not confine the duty to inform to cases in which the employer must consult under regulation 13(6). Institution of Professional Civil Servants v Secretary of State for Defence [1987] IRLR 373, as approved and applied in Cable Realisations Ltd v GMB Northern [2010] IRLR 42, was followed.
2. A measure must be something deliberately done by the transferor beyond what necessarily follows from the transfer. It need not have a detrimental effect. Transitional arrangements concerning early payment, tax and holiday pay were capable of engaging the duty to consult because they affected employees and caused concern, although their financial significance was limited.
3. Compensation. The 13-week award was set aside. The statutory touchstone is the seriousness of the employer’s default, not loss suffered by employees. The guidance in Susie Radin Ltd v GMB [2004] ICR 893 applied, but the maximum starting point should not be used mechanically where some information or consultation occurred. The case was materially less serious than Sweetin v Coral Racing [2006] IRLR 252, where employees first learned of the transfer on the day it occurred. An award of seven weeks’ pay was substituted.
4. Joint liability. Regulation 15(9) was unequivocal. Care Concern was jointly and severally liable with the transferor for the compensation awarded. The appeal against dismissal of the claim against Care Concern was allowed.

• Employment Tribunal, Glasgow: upheld the claims against the transferor, awarded 13 weeks’ pay, and dismissed the claim against Care Concern.
• Employment Appeal Tribunal: dismissed the appeal on liability, reduced the award to seven weeks’ pay, and allowed the appeal concerning Care Concern by declaring it jointly and severally liable.