Apportioning liability for breach of TUPE consultation duties
TUPE makes both transferor and transferee jointly and severally liable for a failure to consult employees. Under ‘joint and several liability’ a claimant is entitled to recover all the sum awarded to him from either respondent regardless of their share of the liability and it is the responsibility of the respondents to sort out their respective proportions of liability and payment.
But if an employment tribunal makes an order against two or more respondents jointly (or jointly and severally), does it have power to determine the respondents’ relative share of liability? No, according to the EAT. Any issue between jointly liable respondents as to the relative share of liability is one that has to be determined in separate proceedings in the county court.
In the case in question, the Claimant was employed as a wedding consultant by the Second Respondent. The Second Respondent got into financial difficulties (and subsequently went into liquidation) and transferred its business to the First Respondent. However, there was no notice to the employees or any attempt to comply with TUPE obligations. The employment tribunal apportioned compensation for a breach TUPE so as to make the whole sum payable by the First Respondent which appealed.
Allowing the appeal, and substituting an order that both respondents were jointly and severally liable to pay the compensation, the EAT ruled that it was clear that TUPE provided for the liability to be joint and several between transferor and transferee and had no power to apportion liability between them.
In a situation like this, a claimant, who receives an award against more than one respondent jointly, or jointly and severally, will undoubtedly look to the respondent with the deepest pockets to pay the entire award and the paying respondent will have to start separate proceedings to recover a contribution from the other respondent.
If you would like advice about how the issues in this note apply to your situation, please contact Tony Brown on 01225 740097 or by e mail to email@example.com
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