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TUPE and splitting contracts of employment

Can a contract of employment be divided between transferees following a TUPE transfer? Charles Pigott examines a recent ruling of the Court of Justice of the European Union.

A recent ECJ ruling in ISS Facility Services NV v Sonia Govaerts, Atalian NV suggests it is possible to split the hours of a transferring employee between different transferees. This could transform our understanding of TUPE in the UK, where it is currently assumed that an employee can only transfer to one new employer, even where the business in which they were previously working is split between different organisations.

This latest ruling came as a result of a reference from Belgium. The local court had to consider what should happen to a particular worker after her employer (ISS Facility Services) had been unsuccessful in a bid to continue providing cleaning and maintenance services to various buildings in the city of Ghent. The tender was divided into three lots, two of which were awarded to Atalian, and one to Cleaning Masters.

Prior to the tender Ms Govaerts had been the project manager for the work comprised in all three lots. The question the ECJ had to answer was whether her contact of employment had transferred to Atalian, which had secured the majority of the work. Alternatively, should it be split between the two transferees in proportion to the amount of time she had worked in the part of the business transferred to each of them?

Looking at the underlying purpose of the Acquired Rights Directive, the ECJ considered that it was possible for Ms Govaert’s hours to be split between the two new providers, provided that dividing her hours in this way did not adversely affect her working conditions. That would be fairer than requiring Atalian to assume the responsibility for all her hours, even though it had not secured all the work.

At first sight, this decision raises more questions than it answers from a UK perspective. Our domestic law, which brings service provision changes as well as business transfers into the protection of the TUPE regime, goes further than the underlying EU directive in protecting employees. In addition, what may work for one employee assigned to a business operating in a small geographical area may not be appropriate for more complex outsourcing arrangements.

Nonetheless, this ECJ ruling does offer an alternative solution to a common problem. It remains to be seen, however, whether there will be many situations where such a neat solution can be found. It seems more likely that there will be practical difficulties in splitting hours in this way, especially if the transferees involved are not based in the same area. Indeed, an employee who wishes to object to their contract being transferred because of a detrimental change to their working conditions may end up in a weaker position than before as a result of this decision.

Charles Pigott is a professional support lawyer at Mills & Reeve. He can be contacted on 01223 222411. This article first appeared on the firm’s HR Law Live blog.

 

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