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Transfer of Undertakings (Protection of Employment) Regulations 2006 Employment consequencesWhere there is a relevant transfer (from one person to another, not just change of ownership) there will not be an automatic termination of the employment simply by reason of the transfer itself. The employee will instead transfer to the new employer and the contractual terms will remain the same.Dismissals will be automatically unfair unless there is a genuine redundancy
- i.e. a economic, technical, or organisational reason for the dismissal ("ETO")Doesn't apply to share transfers, takeovers, asset-only purchases or majority shareholder changeReg 4(3) - applies to any individuals who were:
? Employed by the transferor immediately prior to the transfer to transferee (or would have been had they not been dismissed by reason of a transfer related reason - dismissal effective, liability transfers to transferee)
? Assigned to the relevant group of employees transferring (no transfer to employees temporarily assigned to a particular undertaking)
1. Has there been a relevant transfer?
?? ? ? Business transfer - Reg 3(1)(a) - transfer of an undertaking, business, or part of a business situated in the Uk immediately before the transfer to another person where there is a transfer of an economic entity which retains its identity o to qualify as a business transfer, the identity of employer must change o
Is there an economic entity? (question of fact)
? Reg 3(2) -organised grouping of resources with the objective of pursuing economic activity, whether or not that activity is central or ancillary
? Cheesman test
? Needs to be an economic entity that is stable and discrete - whose activity is not limited to performing one specific contract
? Entity must be sufficiently structured and autonomous - will not necessarily have significant assets
In some sectors, the entity can be based on manpower (only asset) The entity's identity comes from factors e.g. Manpower
Has the entity transferred?
? Identifiable set of resources (including employees) and that set of resources retains its identity post-transfer (1) Has the entity retained its identity?
(2) Are the operations continued or resumed after the transfer??
Applies to full transfer of undertaking and a part of an undertaking Spijkers test - 7 factors (must consider all and not independently)
? Type of business or undertaking
? Transfer or otherwise of tangible assets
? Value of intangible assets at date of transfer (e.g. goodwill)
? Whether the majority of staff (number or skill) are being taken by the new employer
? Transfer or otherwise of circle of customers
? Degree of similarity of activities before and after transfer
? Duration of any interruption of activities
? Tribunal must ask which, if any of the above are present, if
the answer is all or several = transfer of stable economic entityKlarenberg v Ferrotron - as long as some functional link was maintained so that the transferee continued the same or similar economic activity - MUST RETAIN IDENTITY (no need to retain the same structure so long as some functional link maintained)Can't get round regulations by not taking on staff (ECM v Cox)
?????Service provision changes o Reg 3(1)(b)- 3 possible situations:
? Contracting out = activities cease to be carried out by a person on their own behalf and instead are carried out by another on their behalf
? Second generation contracting = activities cease to be carried out by the contractor and are instead carried out by another contractor, on the client's behalf (contractor A replaced by contractor B)
? Contracting back/insourcing = activities cease to be carried out by the contractor and are then carried out by the client on their own behalf o
Do not apply to changes for one specific event only, or changes for a short term duration
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