TUPE

Jeffrey Jupp's TUPE resource

ICAP Management Services Limited v Berry QBD – 3 March 2017

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This case concerns an application for an interim injunction to enforce post termination restrictions (PTRs).  To avoid those PTRs the employee sought to invoke TUPE in a creative and interesting way.

The Facts

B worked for ICAP in a senior role.  He resigned giving the required 12 months’ notice on 22 July 2016.  He was off to joint a competitor, BGC.   ICAP reminded him of his PTRs and placed him on gardening leave.   His employment was therefore due to terminate on 21 July 2017.   So far as material, his PTRs provided, in summary;

(i)  For 6 months following the date of termination [i.e. 21 July 2017] he would not work for a competitor.

(ii)  For 9 months following the date of termination [i.e. 21 July 2017]  he would not solicit business from any of ICAP’s clients with the purpose of providing them with the services that ICAP had provided, if he had been involved in providing such services in the 12 months before termination.

These periods would be reduced by any time spent on gardening leave.    The effect would therefore be that they would have expired at the end of his gardening leave when he would be free to join BGC and solicit clients.   ICAP presumably content that he had been kept away from their clients and competitors for 12 months.

B was no doubt happily digging his garden when he learned that ICAP had been acquired by TB with effect from the 30 December 2016.  On 7 February 2017 his solicitors wrote to ICAP drawing attention to this and asserting it was a TUPE transfer and that B objected to the transfer.  Reg 4(8) of course provides that  where an employee so objects, the relevant transfer shall operate so as to terminate his contract of employment with the transferor.   Therefore, if B was right and there was transfer, because of his objection to the transfer, the contract terminated on the transfer.

Of course his PTRs were still binding but because he had been on garden leave for over 6 months and because this time was set off against the period within the PTRs he was free to join BGC and free to solicit their clients from the 25 April 2017.

B joined BGC and ICAP applied for an injunction.

The judgment

Frustratingly for TUPE watchers there was insufficient evidence before the Court for the judge (O’Farrell J’) to  determine whether or not there was a transfer, although all parties agreed that is was a serious issue to be tried (it appears to have been accepted that if there was a transfer then B’s argument was correct).  The case was therefore decided on conventional injunction principles and and ICAP obtained an interim injunction,  with a speedy trial listed for the end of April.  (It is not known whether the case has been resolved).

Link to judgment

 

 

 

 

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