The employer called about 18 out of about 64 staff to a meeting. She told them that the care home where they worked was being sold. No date for the sale was given and no details of the new employer were given although the staff were told there jobs were safe and there would be no change. There was no election of employee representatives. The ET made the maximum award for failure to consult but declined to make the award joint and several between transfer or and transferee as it was required to do under Reg 15(9). The interesting point in this case concerns the reasoning of the EAT in reducing compensation but for the sake of completeness I first set out the rather hopeless arguments on liability.
On the face of it there were was a clear breach of Reg 13(2) (failure to consult with employee representatives on: the the fact that the transfer is to take place, the date or proposed date of the transfer and the reasons for it; the legal, economic and social implications of the transfer for any affected employees; the measures the measures, in connection with the transfer, which he envisages the transferee will take in relation to any affected employees who will become employees of the transferee if he envisages that no measures will be so taken, that fact). There was also a clear breach of Reg 13(6) (Consultation about measures the employer envisages/intends to take).
The argument run by the employer that they were not liable was as follows:
(a) The employer did not envisage taking any “measures” in relation to any affected employee in connection with the transfer: it was her expectation simply that the entire workforce would transfer to the transferee without any alteration to the status quo. Accordingly, no obligation to consult arose under para. (6) of Reg 13.
(b) An obligation to inform under para. (2) only arose if there was an obligation to consult under para. (6). of Reg 13 The provision in para. (2) that the employer shall convey the relevant information long enough before the transfer “to enable the employer … to consult the appropriate representatives”. It was submitted that this demonstrated that the purpose of the duty to inform was, and was only, to enable consultation under para. (6) to take place, and accordingly that in a case where no such consultation was required no duty to inform arose.
An argument on similar lines had been rejected in two previous cases: Institution of Professional Civil Servants v Secretary of State for Defence  and Cable Realisations Ltd. v GMB Northern . Unsurprisingly it was rejected again. In addition to the reasons already given in previous cases Underhill P added 3 others:
(1) If the employers were correct, it would mean that in a case where the employer did not envisage taking measures that would engage the obligation under Reg 13(6) he would be under no obligation to give employees, via their representatives, even the basic information that the transfer is to take place or its date. As the effect of the transfer is, by virtue of TUPE, to change the identity of their employer, a matter of fundamental importance, it would be surprising if that was something of which they were not entitled to have any advance notice.
(2) The effect of Reg. 13 (10) is that if, notwithstanding the employer having complied with his obligation to arrange for the election of representatives, no representatives are in fact elected, he is in practice discharged from his obligations under Reg 13(2) and (6). However, in that case Reg 13(11) requires him to give the information required by para. (2) to the affected employees individually. That is hard to reconcile with a submission that the only purpose of the duty to inform is to enable consultation to take place.
(3) Article 7.1 of the Directive does not contain the words that are contained in Reg 13(2) that were relied on in limb (b) of the employer’s argument.
The employer had more success on this aspect of the appeal. Although there had been a wholesale failure to comply with the requirements to elect representatives this was not a case where no information had been given to the workforce at all. On the contrary, the employer had addressed a meeting of staff several weeks before the transfer, and had given them at least some basic information and – importantly – a reassurance that the transferee would be making no changes in staffing or terms and conditions following the transfer: The employer clearly, and realistically, understood and intended that that information would come to the attention of those not attending the meeting. The position therefore cannot be compared with that in a case like Sweetin, where the first that the employees knew about the transfer was when the representative of the new owners announced himself at the premises on the day that it took place: Furthermore, the measures in question were not of any great significance, and the broad picture was that the transferee was not expected to introduce any substantial changes in working conditions. The award was reduced to 7 weeks (the employer had contended for 3).
Finally the EAT also ordered that both the transferee and transferor were joint and severally liable as required by Reg 15(9).
When looking at a failure to consult it is important to look at the substance of what the employees were actually told. If there has been a wholesale failure to comply with the technical requirements of Regs 13 and/ 14 but the employees have, nevertheless been given some information and have some knowledge of what is going to happen then a maximum ward of 13 weeks will be excessive.