Key Facts

This case has considered the scope of the obligation on employers to inform and consult affected employees with regard to the effect of a proposed TUPE transfer. The precise steps that must be taken to inform and consult are laid out in statute. In particular, the EAT held that where an employer is genuinely mistaken in its belief that employees will not automatically transfer under TUPE, it will not automatically be in breach of its information and consultation obligations by failing to inform employees of the correct legal position.

The facts relating to the transfer are complex, however the key point was that the Royal Mail (RMG) said that TUPE did not apply and therefore they were not in breach of the informing and consulting obligations under TUPE. The union's central contention was that RMG Ltd was mistaken in its belief that TUPE did not apply, and that it was therefore in breach of its information and consultation obligations. This conclusion was that TUPE applied and that accordingly meant that RMG Ltd was mistaken in its belief that Reg 4 (the automatic transfer principle) did not apply. However, the EAT emphasised that this did not mean RMG Ltd's belief was not genuine. The question that arose was whether a mistaken belief as to the effect of TUPE automatically leads to a breach of Reg 13 (the informing and consulting rules). The EAT thought that if the intention had been that the transferor had to warrant the legal accuracy of the information he was providing, the Regulations would have said so in terms.

Comment

The case is good news for employers who could argue similar facts and raise a defence that they genuinely did not believe that TUPE applied in order to defend claims that they are in breach of the informing and consulting obligations. The case raises many difficult questions about when a belief that TUPE did or did not apply can be said to be genuine.