Recent Employment Appeal Tribunal case concluded settlement agreement between employee and one employer does not automatically prevent the employee raising claims against other employers involved in a TUPE transfer.
The Employment Appeal Tribunal (EAT) has held that in a Transfer of Undertakings (Protection of Employment) 2006 “TUPE” transfer the existence of a settlement agreement with one employer does not automatically prevent the employee from raising claims against other actual or potential parties.
This case involved a Service Provision Change (SPC). An ACAS settlement agreement was entered into with the original employer. However, the agreement did not include two other potential parties against whom the employee may have been entitled to bring claims. The EAT held that claims could still be brought against these parties on the basis that the agreement’s scope only related to the original employer and could not be held to impliedly apply to others.
A TUPE transfer often involves more than one employer, particularly in a SPC scenario. Furthermore, the transferor and the transferee are joint and severally liable to inform and consult about the proposed transfer. This case demonstrates the importance of ensuring that all potential parties in a TUPE transfer are signed up to a settlement agreement, if the aim of that agreement is to settle potential claims against more than one party.
Case name: Tamang v Act Security Limited UKEAT/0046/12/BA
The case can be found here.