Hyde Housing Association Ltd v Layton

TUPE may apply where an economic entity transfers to several transferees, provided the entity retains its identity. However, there is no relevant transfer where the original employer remains legally responsible for the employee’s employment and the employee’s legal position vis-à-vis that employer is unchanged. The addition of other jointly and severally liable employers does not itself create the legally relevant change of employer required by the Acquired Rights Directive 2001 and the Transfer of Undertaking Protection of Employment Regulations 2006.

The claimant had been employed by Martlet Homes Ltd, later an industrial and provident society within the Hyde Group. Following a group-wide restructuring, other Hyde entities were added as joint and several employers under a new contract, but Martlet remained an employer and continued to control the relevant repair and maintenance business.

The Employment Tribunal found an economic entity which retained its identity and held that a relevant transfer had occurred under regulation 3(1)(a) of the Transfer of Undertaking Protection of Employment Regulations 2006. The respondents appealed on two linked issues: whether a transfer could be made to multiple transferees, and whether the transferor could also be one of them.

1. The appeal was allowed. The Employment Tribunal’s decision was substituted by a finding that there had been no relevant transfer on 1 August 2013.
2. Regulation 3(1)(a) of the Transfer of Undertaking Protection of Employment Regulations 2006 does not preclude a transfer to multiple transferees. The singular expression “another person” may, where appropriate, include several persons. The question remains fact-sensitive, including whether the economic entity retains its identity.
3. That possibility does not extend to the present case. Regulation 4 assumes a difference in identity between transferor and transferee. The statutory scheme also distinguishes the person carrying on the activities before the transfer from the person carrying them on afterwards.
4. The same conclusion follows from the wording and purpose of the Acquired Rights Directive 2001. Its protection is directed to a change of employer in which one person ceases to be employer and another becomes employer. The Directive’s provision for joint and several liability is consistent with the transferor and transferee ordinarily being separate legal entities.
5. The decisive consideration was that Martlet retained liability for the claimant’s employment. Its legal position vis-à-vis him remained unchanged. The contractual addition of the other respondents as jointly and severally liable employers did not produce a legally relevant change of employer for TUPE purposes.
6. Given the novelty and potential importance of the issue, the claimant was granted permission to appeal to the Court of Appeal.

• Employment Appeal Tribunal: allowed the respondents’ appeal and substituted a finding that no relevant transfer had occurred on 1 August 2013.
• Employment Tribunal, Havant: held that a relevant transfer had occurred under regulation 3(1)(a) of the Transfer of Undertaking Protection of Employment Regulations 2006. No separate citation is stated in the judgment.