TUPE: duty to inform and consult does not apply if transfer never takes place

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The Employment Appeal Tribunal has handed down a helpful decision on identifying the affected employees with whom information and consultation must take place on a TUPE transfer. Under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) employers have a duty to inform and consult with the appropriate representatives of any “affected employees”. Affected employees are defined as those employees of the transferor or transferee who, “may be affected by the transfer or may be affected by measures taken in connection with it”.

The claimants in this case were employed by ILab (UK) Limited (ILUK), a company which operated in the film industry. Initially it did only rushes work but it subsequently merged with RKT, a company which specialised in post-production work. While there was a degree of overlap between the two businesses, they remained distinct after the merger with the original rushes staff and the post-production staff working at different premises, doing different work, at different hours. ILUK got into financial difficulties and sold the rushes business to a third party company while the post-production business, formerly carried out by RKT, was closed down by the liquidator.

Initially it had been hoped that some of the post-production work would be taken on by the company which bought the rushes business and the employees were informed that some of them would be re-hired on new contracts. However, the situation changed and in the event none of the post-production employees were re-employed…

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