TUPE transfers: employer's liability for discrimination does not transfer with perpetrator
The Employment Appeal Tribunal (EAT) has recently found that liability for discrimination claims does not transfer under TUPE in cases where the perpetrator's employment transfers, but the claimant's does not.
Background
Where a business changes ownership or service provider, the TUPE regulations operate to provide protection for employees. Where there is a relevant transfer, the automatic transfer principle applies in order to automatically transfer those individuals' contracts of employment from the outgoing employer (transferor) to the new employer (transferee). The transferring employees' terms and conditions of employment will be preserved. All of the transferor's "rights, powers, duties and liabilities under or in connection with" the transferring employees pass to the transferee.
In the case of Sean Pong Tyres Ltd v Moore, the claimant resigned and brought claims for unfair dismissal, discrimination and harassment. The harassment claim related to the conduct of one of the claimant's colleagues towards the claimant prior to his resignation.
On the first day of the three day final hearing for the claim, the respondent said that the alleged perpetrator's employment had since transferred under TUPE to a new employer, and that its liability for the claims had therefore also transferred. On this basis, the respondent made an application to amend its response to the claims, which the Tribunal rejected. The respondent appealed to the EAT.
EAT decision
The EAT dismissed the appeal, finding that:
- The claimant resigned well before the TUPE transfer and for reasons unconnected to the TUPE transfer. His employment was at all times with the respondent and therefore liability for the unfair dismissal claim remained with the respondent.
- In respect of the discrimination and harassment claims, these are brought under the Equality Act. The EAT considered a non-binding County Court decision which considered a similar scenario in the context of vicarious liability for negligence. The EAT found that the County Court case could be distinguished because it considered a different type of liability: the Equality Act claims concerned the respondent's primary liability rather than vicarious liability.
- Primary liability under the Equality Act is owed to the claimant employee. In the context of a TUPE transfer, the liability arises in connection with the claimant's employment, not the perpetrator's.
Learning points
This claim acts as a useful illustration of how an employer's liabilities might transfer or not, depending on which employees are in scope of a TUPE transfer. It is helpful to consider to which employee a particular right or obligation attaches. If not the employee who is transferring, then the responsibility is likely to remain with the original employer. It is not the purpose of TUPE for rights and obligations in connection with a non-transferring employee to transfer.