Regulation 13(2) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 requires transferors to provide information on transfer related issues to the appropriate representatives of affected employees and to do so long enough before the transfer to allow consultation to take place.
by Tim Woodward
14 January 2010
Regulation 13(2) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 requires transferors to provide information on transfer related issues to the appropriate representatives of affected employees and to do so long enough before the transfer to allow consultation to take place.
The regulation is however silent on how long before the relevant transfer is long enough.
Given the possibility of a protective award (up to 13 weeks full pay per affected employee) being made if this Regulation is breached the question of how long is long enough is a troublesome one. It has however recently been considered by the Employment Appeal Tribunal in the case of Cable Realisations Ltd v GMB Northern and while there was little, if any, guidance given by the EAT as to what would be long enough we do now know that two working days is not.
The facts
In this case the transferor, Cable Realisations Ltd ("C") decided in May 2007 to either close or sell off its cable business. A non binding purchase offer was received from Paramount, on 31 May 2007 and C’s holding company decided to pursue the sale on 28 June 2007.
The sale progressed as follows:-
• 3 July 2007 - C met representatives from GMB Northern ("GMB"), the appropriate representatives for the affected employees.
• 13 July 2007 - C posted a notice confirming that due diligence had started.
• 18 July 2007 – C posted a notice confirming it would comply with all its obligations if a transfer took place.
• 25 July – there was a meeting between C, Paramount and the GMB at which the timescale for the purchase was expressed in "weeks".
• 15 August 2007 – C received a "measures" letter from Paramount confirming it did not envisage taking any measures (had measures been anticipated compulsory consultation would be required under Regulation 13 of Tupe)
• 15 August 2007 – C provided GMB with the information required by Regulation 13(2) and held a meeting with them.
• 17 August 2007 – C held a further meeting with the GMB and answered questions they had regarding the information provided on 15 August.
• 20-31 August 2007 – C’s annual two-week shut down took place
• 3 September 2007 – the transfer completed
The tribunal claim
GMB bought a claim alleging C had failed to comply with its Regulation 13 obligations. The Tribunal agreed and in particular found that C had breached Regulation 13 by failing to provide GMB with the relevant information required by Regulation 13(2) long enough before the transfer took place. Because of the factory shut down there had been insufficient time between the two dates.
The Tribunal awarded 3 weeks wages as damages for each of the GMB’s members - suggesting the maximum 13 week award was for failure both to inform and consult and therefore not appropriate in this case.
The appeal
C appealed the liability finding and the GMB appealed against the amounts awarded.
The EAT dismissed C’s appeal on the basis that:-
• Even though compulsory consultation was not triggered here, the provision of information required by Regulation 13(2) was to assist in voluntary consultation prior to the transfer. Consultation should take place while the proposals were still at a formative stage.
• To fully engage in meaningful consultation, GMB needed to be able to speak to their members, this was not possible during the factory fortnight shutdown.
The GMB also appealed the Tribunal’s decision on the basis that the amount awarded was too low. The EAT agreed that the Tribunal had misunderstood the maximum protective award of pay to apply in cases where there had been a failure to both inform and consult (the maximum applies to any breach of Regulation 13) but upheld the decision to award 3 weeks pay only. The EAT rejected the arguments for a higher or lower award and concluded that "Like baby bear’s porridge, it was just right."
What this mean for FMs
In the absence of any specific guidance from the EAT it appears as if employers should allow sufficient time between the provision of information pursuant to Regulation 13 and the date of the transfer for meaningful consultation to take place, even if the consultation is not compulsory. Longer time should be allowed if, for any period during that time, the undertaking will be closed or significant numbers of affected employees will be absent from the workplace.
Meaningful consultation requires sufficient time for responses to be given and considered – when this occurs it will be like baby bear’s porridge – just right!
Tim Woodward is a partner at Bevan Brittan LLP
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