Although only an ET decision this case concerns a rare award made under Reg 12 – where a transferor fails to provide a transferee with Employee Liability Information (‘ELI’) that it is required to do under Reg 11.
The Claimants were engaged by R1 ‘Clapham’ and R3 ‘Streatham’ respectively and provided counselling services to a PCT (the client). Prior to the transfer the Claimants were generally regarded as self employed. The PCT decided to reconfigure services and Awareness won the contract. ELI was provided to Awareness in respect of counsellors who employees but not in respect of the claimants who were regarded as being self employed. The claimants’ employment status was challenged in ET proceedings and they successfully claimed that were employees. The claimants then succeeded with unfair dismissal claims and claims for protective awards for which Awareness as transferee was liable. Awareness sought to recover this liability from Clapham and Streatham under Reg 12. (Streatham was insolvent so the claim proceeded only against Clapham.) The transferee has three months to bring a Reg 12 claim and Awareness were three weeks late in doing.
The judgment of the ET
The ET first held that it had not been reasonably practicable for Awareness to have brought the claim in time as they only became aware that the claimants were challenging their employment status when the ET1s were served (paras 87 to 89).
The ET then held that Clapham was liable to Awareness for all of the unfair dismissal awards that Awareness were liable to pay the claimants because had the ELI been provided then the claimants would not have been unfairly dismissed but would have transferred to Awareness. (see paras 87-93)
Awareness also claimed from Clapham an indemnity in respect of its joint and several liability for the protective award under Reg 15 and payment of its costs. Neither of these claims were allowed. The ET held that an indemnity for the protective award was not the sort of loss envisaged by Reg 12 and that the ET Rules of Procedure applied in respect of costs and these could not be circumvented by a claim under Reg 12. (see paras 94-101)