Employment Transfers

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

In the absence of a relevant TUPE transfer, can an individual's employment transfer from one employer to another without the employee's consent?

No, says the EAT in Gabriel v Peninsula Business Services.

The Claimant was employed by Peninsula as a marketing consultant. Peninsula purchased the shares of a company later known as Taxwise Services Ltd. The Claimant was moved to Peninsula's 'Taxwise Department' and on to the Taxwise payroll, but ostensibly remained employed by Peninsula.

An email was then sent, stating that the trade and assets of Peninsula's Taxwise business were to be transferred to Taxwise Services Ltd, along with the employee's employment contract. The Claimant did not receive the email and was otherwise unaware of the purported change of employer. The Claimant then brought sex and race discrimination claims against both companies. For the purposes of compliance with the now repealed statutory grievance procedure and limitation issues (the details of which need not concern us here) the identity of the true employer was important. In essence, for her claim to succeed against Peninsula, as well as Taxwise, she had to show she remained employed by Peninsula over the relevant period.

The EAT (overruling the employment tribunal) applied the House of Lords authority of Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014 to the effect that, at common law, the employment of an employee cannot be transferred from one employer to another without the consent of the employee. Peninsula therefore remained her 'general employer', and the claim against Peninsula could therefore proceed.

It is important to note that TUPE was not pleaded by the employer. If TUPE had applied, the statutory doctrine of automatic transfer of employment would of course have been engaged, subject only to the employee's right to object to the same under Reg 4 (7) of TUPE.