Back to all news
Does a Limb B) worker qualify as an employee for purposes of TUPE?
In Dewhurst and Others v Revisecatch Limited t/a Ecourier and City Sprint (UK) Ltd the ET has answered this question in the affirmative.
The Claimants were cycle couriers who provided services to City Sprint in relation to City Sprint’s contract with HCA Healthcare. City Sprint lost this contract to Ecourier.
The Claimants brought a claim under the Transfer of Undertakings (Protection of Employment) Regulations, 2006 (“TUPE”) for a failure to inform and consult with them about the contract transfer, pursuant to regulations 13 and 14 of TUPE.
A preliminary hearing was listed to decide a point of statutory interpretation only, specifically the scope of the term “employee” in regulation 2 of TUPE and whether a “worker” within the meaning of section 230(3)(b) of the Employment Rights Act, 1996 (“ERA”) and regulation 2(1) of the Working Time Regulations, 1998 (“WTR”) falls within that scope as a matter of law.
The ET accepted that, for the present purposes, the definition of worker in regulation 2(1) of the WTR is materially identical to that in section 230(3)(b) of the ERA. Section 230(3)(b) of the ERA provides that a “worker” means:
“an individual who has entered into or works under … any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual”
For ease of reference, this type of worker will be referred to as a “limb b) worker”.
The ET held that a limb b) worker falls within the scope of “employee” for purposes of TUPE and is therefore entitled to benefit from the rights and protections conferred by TUPE.
In order to understand the reason for this decision, set out below, the following excerpts of TUPE and of the Acquired Rights Directive (Council Directive 2001/23/EC) need to be considered:
- Regulation 2(1) of TUPE defines “employee” as “any individual who works for another person whether under a contract of service or apprenticeship or otherwise but does not include anyone who provides services under a contract for services …”. (Own emphasis added)
- Article 2.1(d) of the Acquired Rights Directive defines “employee” as “anyone protected as an employee under national law”, and article 2.2 states that “[t]his directive shall be without prejudice to national law as regards the definition of contract of employment or employment relationship.” (Own emphasis added)
- Article 3.1 of the Acquired Rights Directive references “the transferor’s rights and obligations arising from a contract of employment or from an employment relationship existing on the date of a transfer”. (Own emphasis added)
In her judgment, EJ Joffe considered both the predecessors of the Acquired Rights Directive and of TUPE, as well as the current provisions. She also considered European case law and national case law. Without going into detail on the analysis that was undertaken, the main points to note are that:
- The principle purpose of the Acquired Rights Directive is to “provide for the protection of employees in the event of a change of employer, in particular to ensure their rights are safeguarded”. This directive is implemented by TUPE.
- The Acquired Rights Directive is not intended to create uniformity of protection across Member states, but to ensure that those rights which are protected by national employment law are preserved in the event of a transfer of an undertaking.
- Consequently, the next aspect to consider is the relevant national legislation and who is specifically protected. This is complicated by the fact that national legislation is inconsistent in its categorisation of “workers” and “employees”; for example, the definition of “employee” in the Equality Act, 2010 (“EqA”) includes limb b) workers.
- Although there is a distinction between persons who work under “contracts of service” and those that work under “contracts for services”; national law has also recognised an intermediate category, namely, limb b) workers.
- Limb b) workers benefit substantially from employment rights derived from EU law, for example: rights to restrict their working hours, rights to annual leave, protection from discrimination and equal pay.
- EJ Joffe found that “employment relationship” in the Acquired Rights Directive is properly to be read as embracing limb b) workers, as these are individuals that are protected by national law.
- As TUPE uses the words “or otherwise”, in the definition of “employee”, it clearly intended to confer rights and protections on a broader class of employees than those employed under a contract of employment. EJ Joffe held that the words “or otherwise” were intended to reflect the words “employment relationship” in Article 3.1 of the Acquired Rights Directive.
- EJ Joffe therefore found that the proper interpretation of regulation 2(1) of TUPE, to give effect to the Acquired Rights Directive, required that the words “or otherwise” be construed to include limb b) workers / EqA employees. The effect of this is that both employees and limb b) workers are entitled to benefit from the rights and protections conferred by TUPE.
Practical effect of the Decision
Although this decision is not binding on other ETs, the ET’s reasoning may be used in similar cases. Further, if this decision is appealed (as it will most likely be) and the ETA upholds it, the result would be a binding decision to the effect that limb b) workers (as well as employees) will have the right to be informed about and consulted on the contract transfer pursuant to regulations 13 and 14 of TUPE. Accordingly, careful thought will need to be given regarding who should be informed and consulted in any TUPE transfer to minimise the risk of liability for failing to comply with TUPE.
Author: Bianca Balmelli