Todd v Strain & Ors

Under the Transfer of Undertakings (Protection of Employment) Regulations 2006, the duty to inform employee representatives is distinct from the duty to consult about envisaged measures. The duty to inform therefore applies even where no duty to consult arises.

Measures need not disadvantage employees. Transitional arrangements affecting pay or holiday entitlement may engage the duty to consult if they are deliberate steps beyond the inevitable consequences of the transfer.

Compensation must reflect the seriousness of the default. The maximum award should not be applied mechanically where some information was given and the measures were relatively minor. A transferee is jointly and severally liable for compensation payable by the transferor.

The appellant, who owned a care home, sold its business to Care Concern GB Ltd in January 2008. Employees brought proceedings under the Transfer of Undertakings (Protection of Employment) Regulations 2006, alleging failures to inform and consult and failure to arrange the election of appropriate representatives.

The Employment Tribunal found breaches of regulations 13 and 14 and awarded each claimant 13 weeks’ pay against the transferor, but dismissed the claim against Care Concern. The appeal concerned liability, the level of compensation, and the transferee’s liability under regulation 15(9).

1. Liability. The appeal against the findings of breach was dismissed. The duties under regulations 13(2) and 13(6) are separate. The duty to inform is not conditional upon the existence of a duty to consult. The Tribunal followed the reasoning in 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.
2. The transferor was obliged under regulation 14 to arrange an election of appropriate employee representatives. The absence of representatives meant that the statutory information and consultation procedure could not be followed. Informal information given directly to some employees did not discharge those obligations.
3. Measures. A measure is a deliberate action, step or arrangement by the transferor beyond what necessarily follows from the transfer. Changes to payment arrangements and holiday payments could constitute measures even though they were small and potentially beneficial. The Regulations do not require the effect to be disadvantageous. The findings that the arrangements caused employee worry were sufficient to engage the duty to consult.
4. Compensation. The 13-week award was set aside. Applying the guidance in Susie Radin Ltd v GMB [2004] ICR 893, as recognised in Sweetin v Coral Racing [2006] IRLR 252, the focus is the seriousness of the default, not financial loss. The maximum should not be treated as an automatic starting point where some information has been supplied. Here, the information was inadequate, incomplete and given only to part of the workforce, but the case did not involve a total absence of information or substantial changes in working conditions. The just and equitable award was seven weeks’ pay.
5. Joint liability. Regulation 15(9) was unequivocal. Care Concern was jointly and severally liable with the transferor for the compensation. Questions concerning apportionment between the parties were irrelevant to the statutory liability and, if necessary, fell to be resolved separately.

• Employment Tribunal, Glasgow: found breaches of regulations 13 and 14, awarded 13 weeks’ pay against the transferor, and dismissed the claim against Care Concern.
• Employment Appeal Tribunal: upheld the liability findings, substituted an award of seven weeks’ pay, and declared Care Concern jointly and severally liable.