Born London Ltd v Spire Production Services Ltd

Employee liability information under regulation 11 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 is defined by reference to the particulars required by section 1 of the Employment Rights Act 1996. Those particulars are not confined to contractual terms.

An employer must provide the scale or rate of remuneration, or the method of calculating it, and the intervals of payment. It need not state whether a particular payment is contractual or non-contractual. The same broad approach is consistent with the relevant European directives. Any further contractual classification is a matter for the transferee’s due diligence.

Spire’s printing contract with Sotheby’s ended and Born took over the work. Thirty-two employees transferred under a service provision change. Before the transfer, Spire described a regular Christmas bonus as non-contractual. Born contended that the bonus was contractual and that the information supplied breached regulation 11 of the Transfer of Undertakings (Protection of Employment) Regulations 2006.

The Employment Tribunal, proceeding under rule 37 of Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, assumed for present purposes that the bonus was contractual but dismissed Born’s regulation 12 complaint as having no reasonable prospect of success. The appeal concerned whether regulation 11 required the transferor to identify the contractual status of remuneration, either under domestic law or European law.

1. The appeal was dismissed. The Employment Tribunal had correctly concluded that Spire did not breach regulation 11.

2. For the purpose of regulation 11(2)(b), employee liability information comprises the particulars which an employer must give under section 1 of the Employment Rights Act 1996. Section 1 provides a statement of employment particulars, not a written contract of employment. The statement is persuasive, but not conclusive, evidence of the employment contract: Robertson v British Gas [1983] ICR 351.

3. The section 1 obligation is of broad application. It is not necessary, or helpful, to divide every required particular into contractual and non-contractual categories. Remuneration may be non-contractual, and section 27 of the 1996 Act recognises that a bonus may be payable otherwise than under the contract.

4. Section 1(4)(a) requires particulars of the scale or rate of remuneration or the method of calculating remuneration. Section 1(4)(b) requires the intervals at which remuneration is paid. Neither provision requires the employer to express a legal conclusion about whether the payment has contractual effect. A method of calculation may indicate contractual status, but does not require that status to be stated.

5. The Council Directive 91/533/EU concerns the essential aspects of the contract or employment relationship, and the Council Directive 2001/23/EC concerns rights and obligations arising from a contract or employment relationship. Neither is confined to purely contractual rights, nor requires the transferor to provide a legal opinion on contractual status. No reference to the Court of Justice was required.

6. Even assuming that Spire’s additional description of the bonus as non-contractual was wrong, that description was outside the particulars required for regulation 11 purposes. A transferee seeking greater contractual clarity must obtain it through due diligence.

• Employment Tribunal: The London (Central) Employment Tribunal dismissed Born’s complaint under regulation 12 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 as having no reasonable prospect of success.
• Employment Appeal Tribunal: The appeal was dismissed. The Tribunal upheld the Employment Tribunal’s construction of regulation 11.