This is a very unusual case of a purchase of shares being identified as leading to a transfer of an undertaking. 

Jackson Lloyd Ltd (JL) was engaged in the repair and maintenance of social housing and had some 400-500 employees. It got into severe financial difficulties and Mears Ltd (ML), the subsidiary company of Mears Group Plc (MG), purchased 100% of the shares of JL.

So far, so not TUPE i.e. it is the ownership of the entity operating the business that changes hands in a share sale and not the ownership of the actual business itself. Assuming TUPE did not apply, no consultation over a TUPE transfer took place with employee representatives.

So, what made this share purchase, which the tribunal found to be genuine, so different? The tribunal (and the EAT agreed with the reasoning) found that:

* Upon this acquisition the original JL Board resigned with immediate effect and were replaced by MG nominees. MG, the parent company of ML, announced to JL’s workforce that MG had acquired JL and that it was now embarking on a programme of integration.

* The process of integration began immediately. A team of integration managers and their support staff from MG arrived at the JL sites on 1 October to assess JL’s working methods and its current situation, and to see to the integration of the JL business and methods into those of MG. 

* Immediately prior to the share purchase, the CEO of MG, David Myles, appointed an “integration consultant”, who reported to the CEO through a subordinate.

* The Tribunal found that Mr Barrett’s remit was: 

“...to turn around the Jackson Lloyd brand using Mears Group Limited systems, policies, procedures, methods and its central services, leaving Jackson Lloyd Limited’s operatives in their former liveried uniform but to all intents and purposes controlled by Mears Group Plc, at least until such time as he had revived its business...”

* The Tribunal found that, as from 1 October 2010, JL was nothing other than a trading name... From that date on JL’s directors and HR team had no say and no involvement in the dismissal of staff by redundancy or otherwise.

In relation to consultation, JL used to consult with elected representatives. However, their terms in office had all expired at the time of transfer, so the individual employees affected by the transfer had a right to make individual claims to tribunal.
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