TUPE Update: Does TUPE Apply to Workers?

In a revolutionary decision of an Employment Tribunal sitting in London in the case of, Dewhurst v Revisecatch & City Sprint, employment Judge Joffe has held that TUPE applies to ‘workers’ as well as to traditional ‘employees’.

The definition of ‘employee’ is defined within regulation 2(1) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE’) as, ‘any individual who works for another person whether under a contract of service or apprenticeship or otherwise’. It is the phrase, ‘or otherwise’ that Judge Joffe applied to include ‘workers’ to fit the definition of ‘employee’ for the purposes of TUPE.

Established case law within the European Courts has given discretion to national courts when interpreting the meaning behind ‘employee’ for the purposes of TUPE. UK legislation under the Employment Rights Act 1996 (‘the ERA’) defines an employee as, ‘an individual who has entered into or works under… a contract of service or apprenticeship’.

The Dewhurst case regarded cycle couriers who had contracts to provide services to a company (and were considered to be contractors rather than employees). The Claimants brought various claims against the Respondents including claims under TUPE for a failure to inform and consult with them about the transfer. A strong argument was put forward as to the differences between contracts for services and contracts of services. However, it was to no avail.

In the end, Judge Joffe ruled that a ‘worker’ within the meaning of the ERA and regulation 2(1) of the Working Time Regulations 1998 is an ‘employee’ within the meaning of regulation 2(1) of TUPE.

Pam Sidhu, Senior Associate in our Employment Team comments, “Previous to this case, it was always arguable that workers may be covered under TUPE, given the reference to “or otherwise” in definition of employee in TUPE. Some previous case law also suggested that TUPE applied to workers, not just employees. This case adds strength to the argument that workers now have TUPE rights; however note that they will still not qualify for unfair dismissal and redundancy pay rights (which are “employee” rights only).  Also, it is still the case that genuinely self-employed consultants will not be covered by TUPE. The case is an interesting one and opens the door for Employment Tribunals to possibly narrow the difference between who is an employee and who is a worker for other purposes, and throws into yet further spotlight the rights of workers and the gig economy”.

Lisa Moore, Associate in our Employment Team comments: “As a result of this decision, parties involved in a transaction where TUPE is likely to apply should take particular care when considering which members of staff are likely to be affected. It is, however, important to be mindful that, as this decision was made at first instance by an Employment Tribunal, it is only persuasive rather than being binding as things stand.  I anticipate that the decision may well be appealed in due course. We will provide further updates as the matter progresses.”

Our Employment Team would be happy to assist with any queries you may have relating to either TUPE or employment status.

To discuss anything arising from this update, please contact Pam Sidhu, Lisa Moore or any member of the Employment Team on 0121 233 4333.