Transfer of rights and liabilities

By Tolley in association with Dr John McMullen, Partner, Wrigleys Solicitors LLP and Visiting Professor of Law, Durham University
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The following Employment Tax guidance note by Tolley in association with Dr John McMullen, Partner, Wrigleys Solicitors LLP and Visiting Professor of Law, Durham University provides comprehensive and up to date tax information covering:

  • Transfer of rights and liabilities
  • Liabilities in relation to transferring employees
  • Terms that cannot be replicated
  • Pensions
  • Collective agreements
  • Trade union recognition
  • ICE consultation bodies
  • Liabilities for pre-transfer dismissals
  • Liability for transferor’s failure to inform and consult

Please note that all legislative and case references in this guidance note are subscription sensitive.

Liabilities in relation to transferring employees

Following a TUPE transfer the transferee acquires:

  • all rights, powers, duties and liabilities under or in connection with the contracts of employment of transferring employees
  • liability for all pre-transfer acts and omissions of or in relation to the transferor in respect of transferring employees or their contracts of employment

SI 2006/246, reg 4(2)

Most employment terms are protected by TUPE. Transferring employees retain continuity of service for determining eligibility to claim unfair dismissal, statutory redundancy payments etc. They also retain their existing terms and conditions, except those relating to old age, invalidity or survivors' benefits under occupational pension schemes.

In addition, the transferee inherits liability for all acts or omissions by the transferor (or an earlier employer) in relation to transferring employees, except for criminal liabilities (eg health and safety offences). These could include:

  • personal injury claims
  • discrimination claims
  • arrears of wages

Knowledge of an employee's disability, a constituent part of some disability discrimination claims, has also been held to transfer under TUPE so that a transferee is deemed to be aware of the disability even if not actually aware. However, this is only an Employment Tribunal decision (Jolly v Namdarkham and Greene King Retail Services ET case no. 2602411/03, Equal Opportunities Review, August 2004, Issue 132 page 22), which means that it has never been tested in the courts and its correctness is uncertain.

The transferee also inherits the right to claim for pre-transfer personal injuries to transferring employees under the transferor's compulsory

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