UK: The End Of The "Percentage Argument" In TUPE Negotiations?

Time after time, businesses are faced with (and use themselves) the classic argument in TUPE negotiations: "Of course the employee must transfer under TUPE – he spends more than 50% of his time on the transferring service".

It is a very convenient and much rolled-out line of reasoning, which can work in both directions ("Of course he doesn't transfer – he only spends 30% of his time on the transferring service..."). It is both a frustrating and a powerful argument in equal measure – an employer may be firmly telling his opposition in a TUPE negotiation that the argument is irrelevant, while desperately seeking to rely on it in a separate debate.

Can (and should) businesses really rely on this argument? In this article we examine the argument's validity, and explore how the recent case of Costain Ltd v Armitage and ERH Communications Ltd may change its likely success in service provision change scenarios. We then consider some tips for businesses when using (or rebutting) such an argument in practice.

The classic argument – it boils down to percentages, doesn't it...?

It is indeed a classic argument – and understandably so: the evidence is often easy to gather, readily presentable, and simple to understand (far easier to understand, usually, than convoluted and often technical and unclear descriptions of an employee's actual duties).

But nevertheless, it is not (or should not be) true to say that an employee's position under the transfer 'boils down' to this question alone.

Why not? It is such a classic argument, after all!

The argument that percentages should be determinative of whether an employee transfers is not accurate for two principal reasons, both of which have been reiterated and confirmed by EAT in the recent case of Costain.

Firstly, it ignores the fact that a two-stage process needs to be followed when determining whether an employee should transfer under TUPE. Secondly, it places too much emphasis on one single factor (the percentage of time spent on the transferring service), instead of taking a multi-factorial approach.

A two-stage process

In a service provision change scenario, if "immediately before the service provision change there is an organised grouping of employees situated in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client", any employees "assigned" to that organised grouping will transfer under TUPE.

Parties to TUPE negotiations will often jump to the second part of the equation (whether an employee is "assigned"), before stopping to consider the rest of the test (whether there is a relevant organised grouping). They will say, for example, that an employee who carries out 75% of his work on the transferring service must therefore transfer under TUPE, as he is clearly 'assigned' to that part. This might well lead to the correct result under TUPE (or at least will often be enough to persuade the other side in negotiations), but not always.

In the present case, Mr Costain spent an estimated 67% of his time on the transferring part of a communications maintenance contract (the rest being spent on ancillary non-transferring works). The Employment Tribunal found that Mr Costain was assigned to an organised grouping of employees (the parties accepted that there was a service provision change), and therefore should transfer under TUPE to the new service provider.

The EAT, however, was less than impressed with the Tribunal's handling of this question, finding that it had not properly considered the two steps in isolation. The Tribunal did not seem to have considered, first of all, whether there was an organised grouping of employees which had as its principal purpose the carrying out of the services in question – it just seemed to have jumped to that conclusion. Then, and only then, should the Tribunal have considered whether Mr Costain was 'assigned' to such a grouping.

Assignment and percentages

A further mistake which the Tribunal went on to make was to place too great a focus on the question of percentages when determining whether Mr Costain was assigned to the grouping of employees. The EAT was concerned that the Tribunal had not in fact made "a proper examination of the whole facts and circumstances" when determining the question of assignment, and had instead relied too heavily on the magic figure of 67%. The case was therefore remitted to the Tribunal to reconsider the question of whether Mr Costain was in fact assigned.

Established TUPE case law has always made clear that the percentage of an employee's time spent on a transferring service will often be indicative of whether that employee is assigned to the service, but will not be determinative, and should be considered as part of the bigger picture. Costain confirms this.

The case does not say that percentages should never be used as an argument for or against a TUPE transfer, and indeed the EAT recognises what a useful and understandable argument it is. The case does, however, act as a warning to businesses intending to rely solely on this argument when attempting to avoid or push through a particular TUPE transfer.

How this case helps negotiations

The case does not establish any new points of law regarding TUPE, but does provide useful guidance and indeed 'ammunition' for TUPE negotiations. Businesses should remember the following when conducting TUPE negotiations:

  • Don't jump to conclusions: Follow the TUPE steps carefully when setting out your arguments as to why a particular employee should (or should not) transfer – first establish whether there is an organised grouping of employees with their principal purpose of carrying out the activities for the client. Then, and only then, consider whether the employee in question is assigned to that grouping. Missing out the first step might still lead to the same result, but your arguments will be more convincing if you can show that you are following the same approach that a Tribunal would in resolving the dispute.
  • Don't rely on percentages alone: It is often tempting to do this, but it is important to find further arguments to support or defeat the transfer. The higher the percentage in question is, of course, the harder this might be; but consider other factors such as the cost and value of the employee to each part of the business, and any managerial responsibilities the employee may have over various parts of the business.
  • But don't ignore percentages completely: Often, in practice, TUPE negotiations are less about the legal technicalities established by case law, and more about the commercial realities of what employees actually do. The question of percentages can therefore be a useful and practical indicator of which business most requires the employee after transfer. If you are negotiating a TUPE transfer, do not be afraid to use percentages to prove your point: it is a clear and effective example that is hard to dispute, and the Costain case does not change that. Just remember, though, that if you have to continue the dispute in a Tribunal, the judge may now be more inclined to pick apart all other arguments before agreeing with you.

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 Topics
Related Articles
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions