John McMullen covers cases of interest (from tribunals to the CJEU) to legal and HR practitioners and other representatives, as well as any legislative and other developments concerning the transfer of employees and assets between employers.

In his first article, John discusses a case which seems to be of universal application and which we haven't seen commented upon before now - LLDY Alexandria Limited v (1) UNITE the UNION (2) Peopleforwork Limited – a case concerned with the provision of reasons and the extent of consultation required in outsourcing part of an employer’s activities.

TUPE: Information and consultation

In LLDY Alexandria Limited v (1) UNITE the UNION (2) Peopleforwork Limited a distillery (LLDY) decided to outsource part of its drink handling activities to Peopleforwork and the questions were:

(a)    whether LLDY had given all of the reasons for its deciding to outsource this work;

(b)   whether LLDY had provided the information long enough before the transfer to enable it to consult UNITE representatives and finally,

(c)    whether the employment tribunal had erred in law in deciding that LLDY had a duty to consult, which was not a question before it.

It was common ground that the decision to outsource triggered the provision of regulation 13 of TUPE requiring information to and consultation with UNITE as a recognised trade union in the undertaking.

Prior to the decision to outsource, LLDY and the union had been in discussion about a pay claim.  The negotiations did not run smoothly.  An impasse was reached.  The evidence was that LLDY's managing director said that he was "fed up" and was left with no option but to subcontract the work. LLDY then informed employee representatives of the proposed transfer, as it was required to do under Reg 13(2) of TUPE.

It was, in this process, required, inter alia, to state the reason for the transfer.  LLDY stated that there were economic factors, worsened by the minimum pricing of alcohol due the following year and that there was a need to reduce operating costs. 


UNITE claimed breach of regulation 13(2) of TUPE in two ways: 

(a)    that LLDY had breached its duty to inform the union of the reasons for the transfer by failing to inform the union that the real reason was the making good of a threat made by the managing director to subcontract the work in the light of the failed pay claim negotiations.

(b)   the information provided in the letter to the union was delivered only 10 business days before the TUPE transfer.  This was, said the union, not long enough to enable proper consultation.

The employment tribunal found, as a fact, that the refusal to accept the company's pay offer was one of the reasons for the outsourcing.  This had not been stated in the TUPE information letter.  As this was a question of fact, and it was not contended that the employment tribunal had acted perversely in so finding, the tribunal's finding was accepted by the EAT.

As to whether the information had been delivered in sufficient time, the tribunal approached the issue following the authority of Cable Realisation Limited v GMB [2010] IRLR 42 in which the EAT held that even if there was no legal duty to consult (for example where no measures are envisaged) nonetheless, the transferor is under a duty to provide information long enough before the transfer to enable it to engage in voluntary consultations.

The EAT held the employment tribunal was correct.  It did not find that the company had a duty to consult and there was no allegation before it that the company had failed to consult as provided for by regulation 13(6) (compulsory consultation where measures are proposed).

But what the employment tribunal correctly found was that in accordance with Cable the company had a duty to provide information long enough before the transfer to allow consultation, even if that consultation were voluntary.  Whether the information was provided long enough before the transfer was a question of fact (see I Lab Facilities v Metcalfe [2013] IRLR 605).  In the present case, the tribunal's finding of fact would not be disturbed.  10 days’ notice was not enough.