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TUPE Ping Pong Blog – Can an employer be liable for employee harassment which occurred before a TUPE transfer?

February 2, 2024

Under TUPE, when there is an effective TUPE transfer, all of the transferor’s (the outgoing employer’s) rights, powers, duties or liabilities in connection with a transferring contract of employment transfer to the transferee (the incoming employer).   Similarly, any act or omission of the transferor, which occurs before the transfer in relation to any of the transferring staff, shall be deemed to be an act or omission of the transferee. 

An Employment Appeal Tribunal decision from early this week has raised some novel issues that employers in the process of completing a TUPE transfer should be especially aware.

Sean Pong Tyres Limited v Mr B Moore [2024] EAT 1 raised the previously unconsidered question of whether a transferee is liable for any pre-TUPE harassment where the alleged harasser has TUPE transferred into their employment, in circumstances where the claimant was not employed at the time of the TUPE transfer.

In the original ET claim, Mr Moore successfully argued that he was harassed and constructively dismissed by his former employer due to the behaviour of a colleague and the subsequent inaction of the company. However, during the course of the tribunal proceedings, the harasser TUPE transferred from Sean Pong Tyres (“SPT”) to a different company. This was raised by SPT at the final hearing, who applied to amend their ET3 response to include the new employer of the harasser as a respondent.  The ET at first instance rejected this motion based on the overriding objective, stating at para 17, “it was a very late application involving a fundamental change of position, the abandonment of this hearing and a major delay in proceedings. In those circumstances, we took the view that the balance of prejudice was in favour of Mr Moore and we refused the application.”

However, upon appeal the late introduction of a new respondent was discussed at length. In simple terms, the respondent (SPT) argued that due to the transfer of the alleged harasser to another company under TUPE, the vicarious liability for his actions should also pass to his new employer. The EAT considered that Mr Moore (the claimant/victim) had resigned prior to this TUPE transfer and therefore decided at paragraph 33 of its judgement, “even if there was a TUPE transfer from the respondent to Criterion, and Mr Owusu’s (the harasser) employment transferred, the respondent’s (primary) liability to the claimant in this case both under the ERA 1996 and under the EA 2010 would not have transferred to Criterion. If I am right about that, any error that the Tribunal made in considering the respondent’s amendment application would not be a material one and that would be the end of this appeal.”

In the end, the EAT agreed with the ET at first instance. Responsibilities to an employee who has not transferred should not pass to a new employer under TUPE. In this case, the lodging of amendments at the eleventh hour (after the claimant had already given evidence no less) was also critical to SPT’s downfall.  Had both the victim of the harassment and the harasser transferred, the outcome might have been different. 

Interestingly, throughout his judgement, EAT Judge Stout notes that Mr Moore’s disbarment from proceedings means that his judgement lacks any adversarial discussion. This may make it open to scrutiny and conflicting judgements in the future. With this in mind, it would be prudent for companies embarking on the TUPE transfer of a company to exercise caution, and guarantee due diligence when assessing their liability under TUPE.

If you have any questions on this on any other area of Employment law, please get in touch with Blackadders Employment Team, working in Aberdeen, Dundee, Edinburgh, Glasgow and across Scotland.

The opinions expressed in this site are of the author(s) only and do not necessarily represent the opinions of Blackadders LLP.

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