445: Liability for discrimination and harassment does not transfer with perpetrator under TUPE

Where the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) apply to the transfer of a business or service, all of the rights, powers, duties, and liabilities under or in connection with the contracts of employment of transferring employees are automatically transferred to the new employer. Establishing which liabilities transfer is usually reasonably straightforward. In Sean Pong Tyres Ltd v Moore, the EAT considered a more unusual situation where the alleged perpetrator in a harassment and discrimination claim transferred to the new employer under TUPE, but the claimant did not.

Mr Moore resigned from his employment with Sean Pong Tyres (SPT) and brought various Employment Tribunal claims including a claim that he had been subjected to harassment and discrimination by a colleague. His claim was brought solely against SPT. Shortly afterwards, the alleged perpetrator transferred to a new employer, Credential, under TUPE. SPT argued that liability for Mr Moore’s claims had also transferred and applied to add Credential as a party to the proceedings. The Tribunal refused SPT’s application and upheld Mr Moore’s claims.

The EAT has now confirmed the Tribunal’s decision. Liability for a claim under the Equality Act 2010 is owed to the claimant employee. In the context of a TUPE transfer, that liability arises in connection with the claimant’s contract of employment, not the perpetrator’s. Therefore, if the claimant does not transfer, as in this case, liability for a discrimination and harassment claim remains with the original employer.

The EAT distinguished this case from Doane v Wimbledon Football Club, a 2007 County Court case in which it was held that vicarious liability for an alleged negligent football tackle by a transferring player could pass to the new employer under TUPE. Doane concerned vicarious liability in tort for the negligent act of a transferring employee, but was not applicable to the type of primary liability arising under the Equality Act.

The EAT has confirmed that liability for a claim under the Equality Act 2010 does not transfer unless the claimant also transfers. This is not a surprising decision, since TUPE does not operate to transfer rights and obligations in relation to employees who are not transferring. However, it does illustrate the importance of undertaking full due diligence in order to understand which rights and obligations attach to transferring employees.