One of the main requirements of the Transfer of Undertakings (Protection of Employment) Regulations ("TUPE") is that the employer informs employee representatives of the legal, economic and social implications of the transfer. Where measures are envisaged a consultation process is triggered. The penalty for failure to inform and consult is up to 13 weeks actual pay for each affected employee. The definition of affected employee is very wide and goes beyond the employees transferred under TUPE. A breach is therefore potentially expensive.
The issue which has just found its way to the Court of Appeal is the test to be applied in determining whether or not the employer has discharged his obligation to give this information. Does he have to say what he honestly believes as to the legal, social and economic implications, or does he have to get it right. In other words, is the test subjective or objective?
The Court of Appeal unhesitatingly upheld the decision of the Employment Appeal Tribunal that the test is subjective. The employer must state what he honestly believes, and he does not have to warrant that his belief is correct.
The case concerned the franchise by Royal Mail of a number of post offices to WHSmith. We acted for the successful party, Royal Mail.
Please click here to read the full judgment.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 14/10/2009.
