TUPE – Laid-off workers can still be an ‘organised grouping’

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) provide vital protection to workers affected by commercial decisions over which they have no control. However, as one case involving a group of construction workers illustrated, their interpretation has been a constant source of legal difficulty.

The workers were together employed by company A to service a single contract but had been temporarily laid off when that work dried up. Company A later fell out with its client and the contract was transferred to company B. An issue thus arose as to whether the workers continued to work for company A or whether their employment had transferred to company B by operation of TUPE.

In ruling on that crucial preliminary issue, an Employment Tribunal (ET) decided that the transfer of the contract amounted to a service provision change. However, the workers were not an ‘organised grouping’ within the meaning of TUPE, in that they were not actually working at the time of the change. Due to their temporary lay-off, the activity in which they had been together engaged had ceased. In those circumstances, their employment with company A had continued.

In overturning that decision, however, the Employment Appeal Tribunal (EAT) noted that the workers had been specifically told that their lay-off was temporary. Such a temporary absence from, or cessation of, work did not in itself deprive the workers of their status as an organised grouping of employees. The matter was returned to the same ET for reconsideration in the light of the EAT’s ruling.