A “Worker” qualifies as an employee for the purpose of TUPE
In Dewhurst and others v (1) Revisecatch Ltd t/a Ecourier (2) City Sprint (UK) the three claimants were cycle couriers engaged by City Sprint providing courier services to HCA Healthcare. This contract was won by Ecourier who took over the contract and engaged the claimants from 1 February 2018. The claimants issued claims for holiday pay and a failure to inform and consult . Consequently, the Employment Tribunal had to decide on the interpretation of an “employee” under TUPE and whether or not a “worker” fell within this definition.
The Tribunal concluded that TUPE covers not only ‘employees’ in the traditional sense – those who work under a contract of employment – but also ‘workers’ – anyone who performs work or services for another under a contract personally (sometimes known as a “limb b” worker).
It remains the case that independent contractors who are genuinely in business on their own account are not covered by TUPE.
Practical implications for businesses
This decision is a first instance decision and so it is not binding on other Employment Tribunals. The decision is likely to be appealed and if the Employment Appeal Tribunal upholds it the result will be that limb b workers will have the same rights as employees to be informed and consulted about the contract transfer pursuant to regulations 13 and 14 of TUPE.
In the meantime, pending certainty on this point, careful thought will need to be given to who should be informed and consulted in any TUPE transfer to minimise the risk of liability for failing to comply with TUPE. In particular a transferee is especially exposed as, unless it does careful due diligence, it may not have visibility over the remit of the consultation of the transferor and/or how the transferor has categorised its “employees” and “workers”.
- Compensation for failing to inform and consult is up to 13 weeks’ gross pay per “employee”, companies may now prefer to err on the side of caution by including “workers” in information and consultation unless and until we have further clarity on the issue.
- Parties involved in the acquisition of other businesses or service provision changes should consider seeking additional comfort by way of warranties and indemnities that cover workers as well as employees in terms of this obligation.
- Fortunately, this decision does not mean that workers, who may now be entitled to be informed and consulted with about a transfer, are also protected from automatic unfair dismissal because this right remains limited to traditional employees (those with a contract of employment).