In a TUPE case, can an order for re-engagement be made against a transferee who is not joined in the proceedings? (Err? No!) Could a compensation order also be made against a transferor when all liability passed to the transferee? (Again, No!)
Dr N was a partner in a GP practice (NMP). NMP provided GP services at the Dumbarton Health Centre. Separately from his position of partnership Dr N also held positions of employment with NMP. It had a contract to do so with the Health Board. NMP was dissolved on 23 March 2017. The Health Board took over the provision of the GP Services whilst it secured another provider for the services. Employees transferred to it. Partners did not. Dr N was however given a fixed-term contract with the Health Board this expired on 31 July 2017. LP were appointed by the Health Board to take over the service with effect from 1 August 2017. All former employees of NMP transferred to LP. Dr N did not.
Dr N brought a claim for unfair dismissal against the Health Board (the transferor). He did not bring a claim against LP for unfair dismissal. After a preliminary hearing at which it was determined that Dr N had sufficient continuity of service to bring the claim, the Health Board admitted liability and the matter was set down for a remedy hearing.
The Employment Tribunal Decision
Although set down for remedy, the issues canvassed at the hearing included such questions as whether: Dr N was assigned to the organised grouping; whether the employment was temporary i.e. of short term duration, whether or not LP was a “successor employer” under sections 115(1), 116(3)(b) and 235 of the Employment Rights Act 1996, and; whether the Tribunal should make an award for re-engagement against LP (who were not a party to the proceedings). In the event, the Tribunal made two orders: (i) that LP was required to reengage Dr N on a permanent contract and (ii) that the Health Board should pay the Dr N’s loss of earnings between the date of dismissal and date of reengagement.
The Employment Appeal Tribunal
There were various grounds of appeal, but of particular interest, are not the grounds of appeal but two preliminary issues raised by the EAT itself. These were:
- Having regard to (a) Litster v Forth Dry Dock & Engineering Co. Ltd, was it competent for the Employment Tribunal to make any remedies order against the Health Board for a dismissal of Dr N that was unfair – as conceded by the Health Board – by virtue of Reg 7(1) of TUPE, 2006?
- In any event, was it competent for the Employment Tribunal to order the re-engagement of Dr N as an employee of a legal entity that was neither a Respondent to the proceedings before it, nor independently represented at the remedies hearing?
On the first issue, the EAT held, unsurprisingly, that any liability for unfair dismissal transferred under Reg 4(1) and Reg 7(1) from the transferor (the Health Board) to the transferee (LP). Having determined that Dr N was assigned to the organised grouping that transferred to LP, there was simply no basis for a finding that the Health Board was liable for the loss of earnings arising from the admitted unfair dismissal.
The “successor employer” provisions which Dr N claimed had the effect that the re-engagement order could be made against LP, had no application to the case at all. The EAT observed that where a dismissal of an employee is automatically unfair by virtue of Reg 7, liability for the remedy of re-engagement will either pass solely to the transferee by virtue of Reg 4(1) or will remain solely with the transferor where the conditions in Regulation 4(1) are not met (e.g if the Claimant was not “assigned” to the relevant grouping). In either scenario, the “successor employer” provisions of sections 115, 116 and 235 ERA will not be relevant except perhaps (as was the position in Dafiaghor-Olomu v Community Integrated Care) where there is later a transfer of the ownership of the business of the party which originally bore the sole liability for the unfair dismissal.
On the second issue, no order for re-engagement could be made against LP unless and until it was joined as a party.
In addition, the Tribunal had only considered whether it was reasonably practicable for LP to reengage Dr N and not whether it was reasonably practicable for the Health Board to do so and it was the Health Board who was the only employer before the Tribunal.