Following a referral to the European Court of Justice (ECJ), the House of Lords has handed down its ruling in an important case (Celtec Ltd. v Astley and others) dealing with the date of transfer of a business under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).
In 1990, Mr Astley was one of a group of civil servants which was seconded from the Department of Education to work for the North East Wales Training and Enterprise Council, when their department was privatised. After three years, he chose to resign from the civil service and took up formal employment with the transferee, which later became Celtec Ltd. When he was made redundant in 1998, Mr Astley, in a representative case, won his case at the Employment Tribunal (ET) that his employment with Celtec should be regarded as continuous with his previous employment as a civil servant, for the purposes of determining his redundancy entitlement.
The Employment Appeal Tribunal overturned this decision but Mr Astley won on appeal to the Court of Appeal.
In the light of the ECJ ruling, the House of Lords held that a transfer to which the TUPE Regulations apply must take place on a specific date, rather than over a period of time, and that it is not open to employers and employees to agree a different date. The date of transfer for the civil servants in this case was deemed to be when their department was privatised in 1990, even though they did not actually become employees of Celtec until 1993. Their continuous employment therefore began when they started working for the civil service, which in Mr Astley’s case was in 1975.
New arguments were allowed to be put forward in this case as reference had been made to the ECJ for an interpretation of the law.
This case has implications for employers who have ‘inherited’ workers in similar circumstances. Always take advice in the early planning stages of a business transfer, before any action is taken.