TUPE

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The McCririck case and a discussion of the meaning of ’employee’ within TUPE – 1 July 2013

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Mr McCririck is currently suing IMG Media Ltd and Channel 4 for age discrimination. At a PHR an interesting issue arose about his employment status in the context of TUPE.   Although an ET decision and therefore of no value as a precedent the issues raised provide an interesting point for discussion.

The Facts

At the PHR, preliminary issues of Mr McCririck’s employment status and whether his employment had transferred from Highflyer Productions Ltd to IMG Media Ltd, were dealt with. The case for IMG was that Mr McCririck was a self employed contractor and therefore there was no transfer. His case was that he was an employee and that his employment had transferred from Highflyer to IMG. The case against Channel 4 is that it discriminated against Mr McCririck as a contract worker under section 41 of the Equality Act 2010.

Meaning of employee/employment

Employment Rights Act 1996

Although not in issue in this case it is worth noting that the Employment Rights Act 1996 (ERA) provides the narrowest definition of employee. Under section 230(1) and (2) an employee is someone who has an employment contract, i.e. a contract of service. Section 203(3) makes particular provision for ‘workers’ as including those who work under any other contract whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual.  However, only ‘employees’ enjoy unfair dismissal rights.

TUPE

Under TUPE by Reg 2(1) an ‘employee’ means any individual who works for another person whether under a contract of service or apprenticeship or otherwise but does not include anyone who provides services under a contract for services and references to a person’s employer shall be construed accordingly.

Equality Act 2010

Under the Equality Act 2010, section 83(2) ‘employment’ means employment under a contract of employment, a contract of apprenticeship or contract personally to do work.

Discussion

McCririck has a contract with Highflyer to personally do work – he could not substitute another person to do it.  He did not have a contract of service.  Nevertheless he was integrated into the Highflyer operation.  He was in a subordinate position and was not an independent contractor operating his own business.   The ET considered a number of authorities in the discrimination context, including Allonby v Accrington and Rossendale College ECJ C- 256/01 and Jivraj v Hashwani [2011] UKSC 40  and held that he was therefore ‘in employment’ for the purposes of section 83 of the Equality Act 2010.

So far as TUPE was concerned, on behalf McCririck it was argued that the words ‘or otherwise’ in Reg 2(1) were intended to  ensure that TUPE applied to ‘workers’ as well as employees.    This argument was accepted by the ET for three reasons:  (1) The Directive is widely drawn. The wording of Art 2.1 is not apt to restrict its scope to contracts of service or apprenticeship only. Those ‘employed’ as ‘workers’ are also protected under our domestic law. The Regulations must be read compatibly with the Directive. (2)  The wording of Reg 2(1) justifies and dictates the interpretation that TUPE applies to ‘workers’ as well as to those employed under contracts of service or apprenticeship as indicated by the words ‘or otherwise’.  The term ‘contract for services’, in context, must be read as confined to the case of an independent contractor in business on his own account.  (3) The purpose of TUPE is such that there could be no good reason for  imagining that Parliament could have intended to exclude ‘workers’.   There would be no rational basis for doing so given that business transfers affect all those ‘employed’.  TUPE could not operate effectively if every transfer required a laborious enquiry into whether staff members were employed under contracts of service or were workers.

Comment

It is difficult, as indeed the very eminent counsel for the Respondents found, to discern what could be meant by the expression ‘or otherwise’ in Reg 2(1) other than to encompass the residual category of workers.  The words are unnecessary if TUPE is confined to those employed under a contract of service.  Indeed, although not cited in the case some support for this view can be garnered from Governing Body of Clifton Middle School v Askew in which it was held that it was only necessary for them to be some contractual relationship between the person subject to the transfer and the transferor.  It was not necessary for it to be a contract of service.

This decision is a reminder of another interesting issue under TUPE.  What if a worker is dismissed because of the transfer or a reason related to the transfer,  does the worker enjoy the right to claim unfair dismissal under Part X of the ERA?    The answer is almost certainly no.

Although, Reg 7(1) provides that right to any ‘employee’ as now defined to include ‘worker’,  Part X of the ERA only gives unfair dismissal rights to the narrow category of employees – those employed under a contract of service and not those providing work under a contract for services.   Furthermore, Reg 7(6) excludes the application of the right to claim unfair dismissal under Reg 7(1) where that right is excluded by any provision under the 1996 Act.  Thus, for example, if the employee does not have sufficient qualifying service and is dismissed because of the transfer he will not be able to bring an unfair dismissal claim.  Similarly a worker dismissed because of the transfer will have no right to being an unfair dismissal complaint because he or she is not an ‘employee’.

There is therefore a residual category of people who will enjoy the general protection of TUPE but will not be able to bring an unfair dismissal claim.   This category of employees will not be wholly without protection.  For example, if there is an attempt to harmonise terms and conditions following a transfer and for reasons related to the transfer,whilst  this residual category of workers would not be able to resign and claim unfair (constructive) dismissal, nevertheless they may, depending on the circumstances, have the right to apply for a declaration to the effect that they have the right to be employed on their existing terms and conditions.

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