The House of Lords has handed down a 4:1 ruling in Celtec v Astley, following the ECJ's decision last year.
Upholding the employment tribunal and Court of Appeal's decisions, but on different grounds, it held:
- following the ECJ ruling, a TUPE transfer must take place on a specific date, rather than over an extended period
- employees and employers cannot agree or arrange fo the transfer to take place on a date other than the true legal date of the transfer.
It is a complicated decision, made slightly easier if put into its factual background. In the early 1990s, the Department of Education created Training and Enterprise Councils (TECs) to take over its responsibility for training young people.
A large number of civil servants were seconded from the DofE to the TECs. Three years later, they were offered the opportunity to return to the DofE, or stay with the TECs and be transferred into the employment of the TECs. Thus in 1993, the Claimants resigned from the DofE and signed new contracts with Celtec (the employer)
The TUPE transfer (when the TECs actually opened for business) was found to be in September 1990.
When the Claimants were made redundant in 1998, they claimed redundancy payments based on continuity of employment back to the beginning of their employment with the DofE. Celtec argued that they were only entitled to continuity of employment from 1993.
The House of Lords, in five separate opinions, decided (4:1) that, in fact, the Claimants had all TUPE-transferred to Celtec in September 1990, irrespective of the fact that everyone believed they remained employees of the DofE and had simply been seconded out. Because it was not possible for the parties to agree a different transfer date, the operation of TUPE 'trumped' any understanding or arrangement between the parties. Accordingly, the Claimants were entitled to rely on their continuity of employment with the DofE.
The dissenting judgment (that of Lord Mance) is impressive and worth reading, to appreciate the potential commercial implications of this decision.
Celtec v Astley
[Thanks to John Bowers QC of Littleton Chambers, who represented Celtec, for telling me this decision was published]