TUPE: Objecting to Transfer

An interesting decision from the Chancery Division, in New ISG Ltd v Vernon.

Five employees objected to a TUPE transfer two days after it had taken place, once they discovered the (previously withheld) identity of the new employer and realised they did not want to work for it.

The new employer sought interim injunctions to enforce restrictive covenant clauses in their contracts, arguing that the right to object must be exercised before the transfer and, since it wasn't, the benefit of the restrictive covenants had transferred over to it.

The court disagreed, holding that a valid objection can take place after the date of transfer, where the employee does not initially know the identity of the transferee and objects promptly as soon as s/he finds out. The objection then has retrospective effect, and prevents the operation of TUPE. Accordingly the benefit of the restrictive covenants had not transferred to the new employer, and the application for injunctive relief was refused.

[Thanks to Michael Herman of Times Online for telling me about this decision]