The ECJ has provided its ruling in Celtec v Astley. The facts are set out below, reproduced from my bulletin dated 13th November 2004:
Prior to 1990, vocational training and enterprise activities were managed by the Department of Education. In 1989, the government announced the creation of Training and Enterprise Councils (known as TECs). Approximately 80 TECs were set up, using (in the main) the same premises, databases and staff as had been doing the job under the Department of Education. They took over the Department of Education's existing contracts with suppliers and other third parties.
This case was concerned with the North Wales TEC, which began operations in about September 1990. In common with the other TECs, it was a company limited by guarantee and was initially staffed by civil servants, previously working for the Department of Education, who were seconded out for a 3-year period to the TEC. The terms of secondment provided that they continued to be civil servants and that, at the end of the period, they could extend the period of secondment or return to normal civil service duties.
In September 1991 the government decided to end the secondments and arrange for staff to be directly employed by the TECs. Following a period of consultation, all staff were offered the opportunity to return to the civil service at the end of their secondment, or resign from the civil service and enter into contracts of employment with the TEC. Many employees, including the Respondents to this appeal, adopted the latter option. The three in question, who brought their claims as test cases, resigned and entered into new contracts in about October 1993 (although the process extended until 1996 for other employees).
If the TUPE transfer took place in September 1990, then "at the time of the transfer" (being the wording in ERA 1996, s218, dealing with continuity of employment) the employees were, and remained, employees of the Department of Employment. Thus s218 would not grant them continuity of employment.
If, however, the TUPE transfer was a gradual process occurring between September 1990 and October 1996 (as the staff transferred), then the employees would have retained continuity of employment for their years spent with the civil service.
Issues and Ruling.
Three issues were referred to the ECJ (I am paraphrasing the questions posed):
1.should the phrase "rights and obligations...existing on the date of a transfer", in the Acquired Rights Directive (which gave rise to TUPE and which had direct effect) be interpreted as meaning that there is a particular point in time at which the undertaking is deemed to have transferred? The ECJ has ruled that the use of the word 'date' (singular) in the Directive, combined with the need for legal certainty, means that the Claimants must be able to point to a specific date on which they say the transfer occurred. A transfer cannot occur over a period of time (see paras. 32-36). This leaves the status of reg. 3(4)(a) of TUPE, which provides that "a transfer...may be effected by a series of two or more transactions", somewhat unclear.
2.If so, how is that date to be ascertained when a transfer takes place as a series of transactions over a period of time? The ECJ completely fudged this issue, and provided a single meaningless Eurospeak sentence (para. 44) which will be of no help to tribunals or practitioners.
3.If not, how should the words 'on the date of a transfer' be interpreted? The ECJ did not need to address this question.
Astley and ors v Celtec Ltd CA 2002