Does TUPE Cover Workers? Gig Economy Test Case Seeks Precedent
Can the TUPE regulations apply to 'workers' as well as to 'employees'? What impact will this have on the wider 'gig' economy?
What Does the Law Say?
The TUPE Regulations' extended definition of an 'employee' encompasses any individual who works for another person, whether under a contract of service or apprenticeship or otherwise. It does not include anyone who provides services under a contract for services.
There is at present no case law confirming whether workers fall within this extended definition, though it is likely that they would. Genuinely self-employed consultants working under a contract for services will not be covered by TUPE.
The forthcoming Taylor review is likely to feature a considerable number of recommendations about the rights of workers in the 'gig' economy. However, it remains to be seen whether or not this will include rights under the TUPE regulations.
Is This Set to Change?
On 24 March 2017, the Independent Workers' Union of Great Britain (IWGB) won a case against courier firm, Excel, which misclassified worker Andrew Boxer as 'self-employed'. The tribunal ordered Excel to pay Mr Boxer outstanding holiday pay which was owed to him.
Excel had sold its business to CitySprint before the case was brought and CitySprint now continues to classify Mr Boxer as a 'self-employed' contractor, despite the outcome of the case against Excel. IWGB is alleging that Mr Boxer transferred to CitySprint under TUPE by virtue of his worker status and that CitySprint is in breach of its obligations by failing to recognize this.
IWGB hopes that a successful ruling will act as a precedent for whether or not 'workers' in Mr Boxer's position, as well as 'employees', can benefit from the protections offered by TUPE. This could have an impact on the buying and selling of businesses in the so-called 'gig' economy.
We will continue to monitor the outcome of this case and will update when we know more about the substantive changes to this system.