September 14, 2010
The Employment Appeal Tribunal (EAT) has ruled that staff at a care home should have been consulted on changes to pay arrangements following a TUPE transfer but original payouts should be reduced.
In 2008, care home owner Ms Todd sold her business to Care Concern (GB) Ltd, resulting in a TUPE transfer.
Employees found out about the transfer to a new employer in a meeting attended by less than one-third of the total workforce. At the meeting staff were told their jobs were safe but were not given any other information. However, as a result of the transfer some of the pay arrangements were changed.
The EAT agreed with previous rulings that as the previous owner of the company had failed to consult staff on relevant measures involved in the transfer, including a change to their pay date, staff were entitled to compensation.
Although administrative changes are usually necessary during transfers and the disadvantage to employees was not obvious, staff should have been consulted as the measures could have been avoided, the EAT acknowledged.
The original ruling by an employment tribunal ordered the previous owner to pay staff the maximum award of 13 weeks' pay as they had caused "needless worry" by failing to consult staff fully.
However, the EAT disagreed, reducing staff compensation as they had been given some basic information about the transfer and a reassurance that their jobs were safe.
"The EAT basically says that part of the duty in a TUPE transfer is to make sure employees are reassured,” commented one expert. “Although employers potentially now need to consult about a wider range of issues, it does mean that the employees will be fully engaged and reassured about what's going on.”
