215: TUPE covers workers as well as employees: Employment Tribunal

Most employers will exclude workers from the list of staff transferring under TUPE, but this has always come with the risk that workers might be protected by TUPE. This is because TUPE has a separate and less clear definition of ’employee’ than the definition which is used in other employment legislation. In Dewhurst and others v Revisecatch Limited t/a Ecourier and City Sprint (UK) Limited, the Employment Tribunal has ruled that workers do fall within the definition of ’employee’ set out in TUPE (Regulation 2(1)). Whilst not binding on other tribunals, this decision is potentially highly significant for employers.

This issue was to establish whether TUPE applied to three cycle couriers who had brought claims for holiday pay and failure to inform and consult under TUPE. The couriers had been engaged by City Sprint until it lost a contract for the provision of courier services to HCA Healthcare to Revisecatch. In a previous Employment Tribunal decision, one of the claimants had been found to be a worker of City Sprint. The Tribunal had to determine whether the definition of ’employee’ under TUPE covers ‘workers’ as well as traditional ’employees’.

TUPE defines an ’employee’ as:

‘any individual who works for another person whether under a contract of service or apprenticeship or otherwise but does not include anyone who provides services under a contract for services.’

It is clear that this definition excludes individuals who are genuinely self-employed. However, due to the use of the words ‘or otherwise’, it is unclear whether ‘workers’ are included.

The question of employment status is not straightforward under UK law, since domestic legislation can use the term ’employee’ to cover both traditional employees with a contract of service, and ‘workers’, who have a lower level of employment rights. Turning to TUPE, the Tribunal considered that the definition of employee must have been intended to protect a broader class of individuals than just those employed under a contract of employment due to the words ‘or otherwise’. The exclusion for independent contractors engaged under contracts for services was intended to catch only those individuals who did not have any employment rights to be preserved in the event of a transfer. The Tribunal concluded that TUPE must be construed so as to include workers.

This decision is not binding on other tribunals and may be successfully appealed. In any event, when dealing with the sale of a business or loss of a contract which is staffed by individuals who are not employees, it is vital to assess the legal and financial risks of TUPE applying to them, including the risk of liability for failure to inform and consult about the transfer which could amount to 13 weeks’ pay for each affected worker. However, treating individuals as though they are covered by TUPE may influence any subsequent challenge to their employment status. It is also important to note that individuals who are classed as self-employed could be found to be workers by a Tribunal.