Jackson Lloyd Ltd & Anor v Smith & Ors (Transfer of Undertakings : Transfer)

A transfer of an economic entity under Transfer of Undertakings (Protection of Employment) Regulations 2006, regulation 3(1)(a), requires a broad, multifactorial and fact-sensitive assessment. The relevant factors are guides, not a checklist requiring separate findings on every factor.

A genuine share acquisition is not itself a TUPE transfer. It may, however, provide the context for a separate transfer where the evidence shows that another legal person assumed control of the undertaking’s day-to-day business activities and the entity retained its identity.

Existing employee representatives are appropriate representatives only if they had authority from affected employees at the relevant time. Authority may depend on the scope and duration of their mandate.

The Employment Tribunal held that, following a subsidiary’s genuine acquisition of all the shares in Jackson Lloyd Ltd, the parent company had taken over control and operation of its repair-and-maintenance business. It found a relevant transfer to the parent under regulation 3(1)(a) of Transfer of Undertakings (Protection of Employment) Regulations 2006.

The Tribunal also found that the mandates of non-union employee representative committees had expired before the transfer. The individual affected employees could therefore bring protective-award claims in their own names.

The companies appealed, alleging errors in the TUPE analysis, identification of the transferee, and the claimants’ locus standi.

1. Appeal dismissed unanimously. The Employment Tribunal gave a sufficient and correct direction on the applicable test for a transfer under regulation 3(1)(a) of Transfer of Undertakings (Protection of Employment) Regulations 2006. The inquiry was broad, multifactorial and fact-sensitive. The factors identified in Cheesman were helpful guidance, not a checklist requiring separate consideration in every case.

2. The Tribunal was entitled to find that the economic entity retained its identity and that the parent company, Mears Group Plc, had assumed control of Jackson Lloyd’s business. The parent’s announced integration programme, the arrival of its integration team on the acquisition date, and subsequent conduct were relevant to whether the transfer occurred on that date. The appeal impermissibly challenged evidential weight and factual findings without advancing a perversity challenge.

3. The genuine share purchase by the subsidiary was not itself a TUPE transfer. It was the context in which the parent acquired practical control of the undertaking. A transfer of the undertaking to the parent could therefore occur notwithstanding that the subsidiary acquired the shares and that the companies retained separate legal identities.

4. For regulations 13 and 15, the statutory purpose is to secure meaningful employee consent to collective representation. The Tribunal was entitled to hold that the representatives’ authority ended with their agreed 12-month terms. There was no evidence of renewed authority, consent to continued representation, or TUPE consultation before the transfer. The individual claimants accordingly had standing to present their protective-award claims.

• Employment Appeal Tribunal: appeal dismissed; the Liverpool Employment Tribunal’s decision was upheld.
• Liverpool Employment Tribunal: judgment sent to the parties on 20 December 2012. It found a relevant transfer under regulation 3(1)(a) of Transfer of Undertakings (Protection of Employment) Regulations 2006 and held that the relevant individual claimants had locus standi to bring protective-award claims.