In a recent ruling, the Employment Appeal Tribunal (EAT) clarified the transfer of liability for discrimination claims under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). Let’s delve into the details of this case:
Background
When a business undergoes a change of ownership or service provider, TUPE regulations come into play to safeguard employees. These regulations ensure that employees’ contracts of employment automatically transfer from the outgoing employer (transferor) to the new employer (transferee). However, not all employees necessarily transfer during such transitions.
The Case: Sean Pong Tyres Ltd v Moore
- The claimant in this case alleged unfair dismissal, discrimination, and harassment against their employer.
- The harassment claim specifically related to the conduct of a colleague, X, prior to the claimant’s resignation.
- Following a subsequent TUPE transfer, X’s employment moved to a different company, Credential.
- Importantly, the claimant’s employment did not transfer to Credential because they had already resigned due to the discrimination.
- The claimant’s employer argued that Credential should be liable for the claims, given X’s transfer under TUPE.
EAT Decision
The EAT reached the following conclusions:
- Timing Matters: The claimant resigned well before the TUPE transfer, and this decision was unrelated to the transfer itself. As a result, the claimant’s employment remained with the original employer.
- Equality Act Claims: Discrimination and harassment claims fall under the Equality Act. The EAT distinguished this case from a non-binding County Court decision related to vicarious liability for negligence. Unlike vicarious liability, primary liability under the Equality Act is owed directly to the claimant employee.
- Purpose of TUPE: The purpose of TUPE is to transfer rights and obligations connected to transferring employees. It does not extend to non-transferring employees like the claimant.
Key Takeaways
This case highlights how an employer’s liabilities may or may not transfer based on which employees are within the scope of a TUPE transfer.
In this instance, Credential did not inherit liability, and the claimant’s original employer remained responsible for the claims.
Summary by Pat Harrington
