TUPE and Employee Reinstatement

TUPE and Employee Reinstatement

Where there has been a TUPE transfer, and prior to that transfer, an employee of the transferor company was dismissed, can that employee, on successful claim via the Employment Tribunal, be reinstated to the transferee company?


This was one of the issues raised in the case of Dafiaghor-Olomu v Community Integrated Care & Anor (UKEATS/0001/17/JW).


The Claimant had been employed by Community Integrated Care (CIC) and she had been working and living in Scotland. She was dismissed by CIC, unfairly in the view of the Employment Tribunal (ET).


As the Claimant’s case progressed to case management stage, most of the CIC contracts in Scotland had been transferred to another company, Cornerstone.


Rather than accept compensation for the unfair dismissal, the Claimant sought to be reinstated. However, this was refused by the ET on the basis that it was no longer practicable in relation to CIC because CIC were no longer providing services in Scotland.


The contracts – which, owing to her dismissal meant she was no longer part of – had been TUPE transferred to Cornerstone.  Further, her former post had been changed.


Nevertheless, the Claimant appealed.


The Appeal Tribunal (EAT) allowed part of the appeal in respect of CIC because the ET had erroneously assumed the Claimant was restricted to working in Scotland – which was not the case –  and so the matter was reconsidered for her re-employment by CIC on a wider geographical basis.


In respect of reinstatement, but with Cornerstone, this part of the appeal was refused, because for it to succeed, the Claimant would have to show Cornerstone as a successor employer to CIC for the purposes of re-employment.


For this to be proven, compatibility would have to be achieved with the defined of section 235(1) Employment Rights Act 1996 (ERA) for the purposes of section 115 ERA as:


“… a person who in consequence of a change occurring (whether by virtue of a sale or other disposition or by operation of law) in the ownership of the undertaking, or of the part of the undertaking, for the purposes of which the employee was employed, has become the owner of the undertaking or part”.


Thus, the EAT could conclude nothing other than that section 235 requires a change in legal ownership of the undertaking itself.


In the material case, the local authority had terminated the service provided by CIC and awarded the service contract to Cornerstone. This kind of transaction is commonplace where contractors are removed and replaced. Ownership remained with the local authority, while there was no change in the ownership of the service from CIC to Cornerstone either. Alas, Cornerstone was not a successor employer within the meaning of section 235 ERA for the purposes of sections 115 and 116 ERA, and thus this limb of the appeal failed.


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