Q&As

On a relevant transfer under TUPE 2006, can one of the parties to the transfer (ie the transferor or the transferee) enter into a settlement agreement with an employee in relation to a claim arising under TUPE 2006 which will protect that party from liability in respect of TUPE 2006 if the other party fails to reach a settlement?

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Published on LexisPSL on 21/12/2018

The following Employment Q&A provides comprehensive and up to date legal information covering:

  • On a relevant transfer under TUPE 2006, can one of the parties to the transfer (ie the transferor or the transferee) enter into a settlement agreement with an employee in relation to a claim arising under TUPE 2006 which will protect that party from liability in respect of TUPE 2006 if the other party fails to reach a settlement?
  • Nature of the claim and apportionment of liability under TUPE 2006
  • Contracting out of TUPE 2006 claims
  • Indemnities given as part of the transaction

On a relevant transfer under TUPE 2006, can one of the parties to the transfer (ie the transferor or the transferee) enter into a settlement agreement with an employee in relation to a claim arising under TUPE 2006 which will protect that party from liability in respect of TUPE 2006 if the other party fails to reach a settlement?

Consideration should be given to:

  1. the nature of the potential claim or claims

  2. the potential liability of the relevant party in question in respect of that claim (including any joint and several liability)

  3. whether it is possible for the claim(s) in question to be contracted out of, and

  4. whether the relevant party has given (or received) indemnities to (or from) the other party to the transaction

Nature of the claim and apportionment of liability under TUPE 2006

Claims arising in a situation to which Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006), SI 2006/246 applies may include:

  1. unfair dismissal

  2. claims arising in respect of the transferor’s acts or omissions before completion of the transfer

  3. failure to inform and consult

See Practice Note: Indemnities in corporate transactions for a useful table setting out how TUPE 2006, SI 2006/246 apportions liability for claims between the transferor and transferee.

As set out in that table, the transferor and transferee will have joint and several liability:

  1. in relation to failure to inform

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