Does the obligation to keep and therefore produce wage records for transferring employees remain with the transferor in a TUPE transfer?
No, held the EAT in Mears Homecare Limited v Bradburn and others.
Section 9 of the National Minimum Wage Act 1998 (NMWA) imposes an obligation on employers to keep pay records. The obligation remains where the employee's employment has ceased. A worker has the right to require their employer to produce pay records if they believe on reasonable grounds that they may have been paid less than the national minimum wages.
The Claimants transferred to new employers under TUPE. Around four months later, they served production notices on the Respondent requesting wage information. The Respondent failed to respond to the production notices within the 14 day time limit. The tribunal ordered them to pay £600 to each Claimant, that sum being 80 times the hourly rate for national minimum wage.
The EAT overturned the decision, finding that under a TUPE transfer, employment does not cease for the purposes of the NMWA, it continues but with the transferee. Liability to keep pay records transfers from transferor to the transferee.
The EAT recognised that it may be more convenient for the transferor to maintain pay records as they had collated them but said that was not a good reason for the obligation not to transfer. There was no reason why the transferee should not be in a position to insist that pay records are delivered by the transferor as part of the transfer agreement reached.
Thanks to David Leslie of Lyons Davidson for preparing this case summary.