News on 19 September 2000
Although primarily an employment issue, TUPE (The Transfer of Undertakings
(Protection of Employment) Regulations) continues to affect property specialists.
Two recent leading Employment Appeal Tribunal (EAT) cases which demonstrate
the courts current approach to TUPE involve property management. The first,
Whitewater Leisure -v- Barnes, concerned a change in the management of
a leisure centre while the second, ADI Limited v Willer, concerned a change
of contractor providing security at a shopping centre.
These cases confirmed that there are two fundamental questions to be asked
to establish whether TUPE applies. The first question is whether there
is an identifiable business, which constitutes an undertaking, namely
a stable and discrete economic entity. If there is an undertaking, the
second question is whether there is a relevant transfer. In Whitewater
it was decided that there was no separate undertaking as the management
was integrated with the outgoing contractor's central management which
ran many other leisure centres. As there was no undertaking it could not
transfer. In ADI the EAT concluded that there was an undertaking as the
security staff were not integrated with the rest of the outgoing contractor's
operations. However there was no transfer as no assets and all of the
staff declined to transfer.
Although both cases show that TUPE is now being interpreted more restrictively
the differences in the conclusions are so subtle that it is still not
going to be easy to distinguish one set of circumstances from another.
