Veitch Penny LLP - Exeter | Crediton, Devon

Case

G4S Justice Services (UK) Limited v Anstey and Others
Employment Appeal Tribunal - 30 March 2006

Issues

(1) Transfer of Undertakings (Protection of Employment) Regulations 2006 ("The TUPE Regulations")
(2) Unfair Dismissal
(3) Disciplinary Proceedings

Facts

The TUPE Regulations provide protection in the event of a business sale to employees who were engaged "immediately before a transfer". Their contracts of employment transfer automatically to the new owner. The TUPE Regulations also provide protection to employees who would have transferred to the new business had they had not been unfairly dismissed prior to the transfer taking place. In this case the new employer argued that the Claimants were dismissed and therefore were not employed at the time of the transfer. The facts of the case were as follows:

Mr Anstey and Mr Simpson had been employed by GSL UK Limited as detainee custody officers on an escort contract which GSL had with the Home Office. Disciplinary proceedings were brought in April 2005 against each employee following allegations in a television documentary programme. On 13th April 2005, both employees were summarily dismissed. Before the end of April 2005, both employees had lodged internal appeals against their dismissal exercising a contractual right of appeal. On 30th April 2005, GSL's contract terminated with the Home Office and was taken over on 1st May 2005 by G4S. The parties accepted that this was a relevant transfer for the purposes of the TUPE Regulations.

The employees' appeals were not heard before the transfer was able to take place. Another employee however was successfully appealed before the transfer and he was reinstated. His employment transferred to G4S.

After the transfer had taken place, a dispute arose between GSL and G4S as to who should hear the appeals made by Mr Anstey and Mr Simpson. G4S declined to do so on the basis that it was not the employer of Mr Anstey and Mr Simpson. Consequently GSL heard the appeals in late June/early July 2005. Those appeals were successful and the employees were reinstated. However GSL had no work for the employees and G4S refused to take them on. They argued that the employees had not been employed by GSL immediately before the transfer took place and consequently their employment could not transfer under the TUPE Regulations.

Mr Anstey and Mr Simpson made claims of unfair dismissal against both companies. At the original Tribunal, the Chairman found that the employment of the Claimants had transferred under the TUPE Regulations to G4S. The matter was then appealed to the Employment Appeal Tribunal ("EAT").

Decision

G4S argued that the employees' contracts of employment had ended when they were summarily dismissed. At the date of the transfer, they were treated as dismissed and consequently they were not employed by GSL "immediately before" the transfer as required by the TUPE Regulations. GSL on the other hand argued that because the original dismissals were over-ruled, the Claimants should be treated as being employed by them until the transfer date and were transferred to G4S.

The EAT agreed with the Employment Tribunal Chairman finding that it was correct to conclude that the Claimants' employment was transferred to the new employer even though their appeals against dismissal had not been heard at the time of the transfer. Whether or not an employee in a position such as Mr Anstey and Mr Simpson is transferred, would depend on whether the appeal against dismissal succeeded and reinstatement is ordered. It should be noted that an employee's employment is preserved only for the purposes of determining the appeal. If the appeal is successful and the dismissal is set aside, then the dismissal vanishes and the employee continues in employment and is transferred to the new employer. If the appeal is unsuccessful, then the original dismissal stands and would not have been employed "immediately before" the transfer.

In this case, there was a contractual obligation to hear and determine the appeals on the part of the transferring employer even though the transfer had taken place. Once the Claimants were reinstated, then they were to be treated as having been employed by the transferring company up until the date of the transfer.

Comments

The new revised TUPE Regulations have placed an obligation upon the transferring employer to provide the new company with employee liability information, part of which includes information about disciplinary proceedings brought against employees. This means the receiving employer will be placed on notice of any issue. However in cases such as this where the appeal process is carried out by the transferring employer, there will be little incentive to maintain any dismissal and relieve the new employer of the obligation to employ the employee subject to the disciplinary procedure.


Rachel Billen - Associate Solicitor, Commercial Department at Veitch Penny.
Tel: 01392 278381, Fax: 01392 410247, Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

This Employment Law Update does not constitute legal or other professional advice and should not be relied on as such. You should take specific advice regarding your circumstances before taking any action based on the information contained within this Update.