UK: Consultation In Relation To Transfers

Last Updated: 7 November 2013
Article by Davenport Lyons

Of course it is not just collective redundancy situations which require an employer to undertake consultation. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) also necessitates employers undertaking consultation and is another area that can cause difficulties. In two recent cases the EAT have considered first, whether employee representatives had been correctly appointed and secondly, whether the duty to consult applied to employees retained in the business after part of it was sold.

Under Regulation 13 of TUPE the employer is under a duty to consult the appropriate representatives of any "affected employees", which in turn is defined as "any employees of the transferor or the transferee (whether or not assigned to the organised grouping of resources or employees that is the subject of a relevant transfer) who may be affected by the transfer or may be affected by measures taken in connection with it".

Regulation 14(1)(a) states:

"(a) the employer shall make such arrangements as are reasonably practicable to ensure that the election is fair...

(b) all affected employees on the date of the election are entitled to vote for employee representatives..."

Making an election fair

In the first case, Shields Automotive Ltd v Langdon, the employer announced at 2pm that an election would take place and that nominations and voting had to be completed by 5pm the same day. This election took place a week before the proposed transfer but there was evidence to suggest it could have taken place earlier.

One employee, Mr A, did not vote as he was concerned about the tight timetable and one employee, Mr B, did not vote as it was his day off. The employee with the most votes was elected but there was a tie for second place. The employer decided which of the two tied employees should be the representative by rejecting one of the candidates as he did not work on the day that the consultation meeting was going to be held. The two employees who had not voted complained that the employer had failed to comply with Regulation 14.

The EAT held that the tribunal had been entitled to find that the employer had failed to comply with Regulation 14. All employees were entitled to vote and the employer had not shown that it was not reasonably practicable to allow all employees to vote. It was also a breach of Regulation 13(3) for the employer to decide a tie break when the representatives were supposed to be appointed or elected by the affected employees.

The EAT stated that the level of the protective award was to be determined by the seriousness of the employer's default. In this case the EAT upheld an award of compensation of two weeks' pay in the case of Mr A but reduced the award for Mr B from seven weeks' pay to three weeks' pay as it considered this award to be "manifestly excessive".

Who are "affected employees"?

In the second case on TUPE consultation - Lab Facilities Ltd v Metcalfe - the EAT held on the facts of the case that the duty to inform and consult under TUPE did not apply to employees retained in the business after part of it was sold.

The case concerned a business, ILUK, which was the result of a merger of two distinct businesses. Following the merger the two businesses retained their distinct features. When the business got into financial difficulties and went into liquidation the liquidator sold one part to I Lab and the other part was closed down. Employees in the part that had been closed down made tribunal claims against ILUK and I Lab alleging that they were in breach of the obligation to inform and consult under Regulation 13 of TUPE.

A tribunal allowed the claims and awarded 13 weeks' gross pay to the 10 employees concerned, totalling in excess of Ł80,000. As the only solvent party, this liability would have fallen to the transferee, I Lab, to pay. I Lab appealed.

The EAT overturned the tribunal's decision and held that the employees were not "affected" by the transfer within the meaning of Regulation 13. The employees were not affected by the transfer simply by being excluded from it. Even if the subsequent closure of the part of the business in which the retained employees worked could be said to be, in part, the result of the sale of the other part of the business, this indirect effect did not mean there was a duty to inform and consult. The tribunal's decision could not be defended on the basis that under an earlier plan some of the employees may have been included in the transfer and it was this change of plan that brought them within the ambit of the consultation provisions. The transfer has to actually occur before the consultation provisions come into play; the transfer that did occur did not "affect" the employees as they were not included in it.


The financial penalties for failure to comply with the consultation provisions under TUPE are the same as the collective redundancy provisions, with the maximum award being 13 weeks' gross pay to each affected employee. The case about the elections is some comfort to employers that more minor or technical breaches of the Regulations concerning elections will not be punished in the same way as wholesale failure to comply.

It should be noted that a duty to consult with non-transferring employees may still arise where it can be argued that they are affected by the transfer, for example, by doing work in or for the transferring business. Ultimately in the I Lab case the non-transferring employees were affected by the closure of the part of the business in which they worked, rather than the transfer itself. However, it should also be remembered that there may be consultation obligations under the collective redundancy rules in relation to the closing down of part of a business if 20 or more employees are involved. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.