LLDY Alexandria Ltd (Formerly Loch Lomond Distillery Company Ltd) v Unite The Union & Anor

Under regulation 13(2) of the Transfer of Undertakings (Protection of Employment) Regulations 2006, information must be given sufficiently before a transfer to allow representatives to consult, even where consultation is voluntary rather than required by regulation 13(6). The required time is assessed in all the circumstances. It is not fixed by the date on which the employer made its decision.

The employer must state the reasons which in fact influenced the transfer decision. A tribunal may find that an undisclosed industrial dispute and a stated intention to outsource were such reasons. An appellate tribunal will not interfere with those factual findings absent an error of law.

The employer decided to outsource its spirit-handling work to the second respondent. Unite, the recognised trade union representing affected employees, complained that the employer had breached regulation 13(2) of the Transfer of Undertakings (Protection of Employment) Regulations 2006.

The Employment Tribunal upheld the complaint. It found that the employer had failed to disclose all the reasons for the transfer and that information was not provided sufficiently early to enable meaningful consultation. It made a declaration and adjourned compensation.

The employer appealed, supported by the transferee. It contended that the Tribunal had wrongly imposed a duty to consult under regulation 13(6), had wrongly treated the pay dispute and managing director's statements as reasons for the transfer, and had erred on the timing issue.

1. Appeal dismissed. The Employment Tribunal had not held that the employer was subject to the mandatory consultation duty in regulation 13(6). That issue was not before it. Its finding instead concerned the distinct duty under regulation 13(2) to provide information sufficiently early to enable consultation.

2. Regulation 13(2) applies where a relevant transfer is to occur. Its timing requirement is not determined by when the employer first envisages measures or makes the transfer decision. The question is whether, in all the circumstances, information was supplied long enough before the transfer for representatives to consult. That consultation may be voluntary where regulation 13(6) is not engaged.

3. The Tribunal was entitled to find that information supplied shortly before an imminent weekend closure and transfer was not supplied sufficiently early. It had correctly addressed the statutory question. Although the EAT doubted that consultation had to occur while proposals remained formative, that concern did not undermine the Tribunal's actual finding.

4. The existence of the pay dispute and the managing director's stated intention to subcontract were factual reasons for the outsourcing decision which the Tribunal was entitled to find had not been disclosed. They did not need to be the sole reasons. As reasons for the decision, they required to be stated; the general reference to cost savings did not compel the contrary conclusion.

5. The case was remitted to the Employment Tribunal for its already-continuing remedy hearing.

• Employment Appeal Tribunal — dismissed the employer's appeal and remitted the case for the Employment Tribunal's remedy hearing: [2014] UKEAT 0002_14_3004.
• Employment Tribunal — unanimously upheld the union's regulation 13(2) complaint, made a declaration, and adjourned compensation.