News and Events from November 2011

News Archive November 2011

Michael Howlin QC gives keynote address

Michael Howlin QC gave the keynote address at this year's Hastie Stable-WS Society's employment law conference on 20 October 2011.  His talk (entitled "Unfair Dismissal and TUPE Update") reviewed recent case-law on a number of topics of interest to employment lawyers.

The "Unfair Dismissal" chapter examined Aberdeen City Council -v.- McNeill, in which the EAT held that, because of the common-law principle of mutuality of contractual obligations, an employee who had committed a repudiatory breach of his contract of employment was not entitled to rely upon a subsequent repudiatory breach by the employer as a ground for treating himself as having been constructively dismissed.  By contrast, in GISDA -v.- Barratt the Supreme Court has warned against allowing common law considerations to encroach upon employee rights which are conferred by statute.

The "TUPE" chapter of the talk dealt first of all with UK case-law on the nature of administration proceedings under Schedule B1 to the Insolvency Act 1986 and what effect (if any) administration has on the operation of TUPE regulations in light of regulation 8(7).  Consideration was given to the EAT's decisions in Oakland -v.- Wellswood – a much-criticised decision - and OTG -v.- Barke - a powerfully-reasoned judgment which examined the correct approaches and determined that administration can never engage Regulation 8(7).

The remainder of the "TUPE" chapter dealt with recent European case-law on the Acquired Rights Directive.  Looking at labour-intensive employment, the question arises whether the Acquired Rights Directive requires the transfer of at least something by way of assets, or can there be a transfer of an undertaking within the meaning of the Directive even if no assets are transferred?  On one view, in its (unpublished) decision in Case C-108/10 Ivana Scattolon (6 September 2011) the ECJ has finally taken the step of recognising that in some labour-intensive sectors there are no substantial assets and that in such sectors the absence of any transferred assets does not of itself prevent the Directive from applying. An examination was also undertaken of the decision of the French Court of Appeal at Angers in a case (CNH, 10 May 2011) involving the French TUPE legislation and the Acquired Rights Directive.  The essential facts were: After a tendering process, a town council awarded the contract for the management of a travelling people's site to Company A, which then sub-contracted the "cleaning" part of the contract to Company B.  Subsequently the council put the contract out to tender again and awarded it this time to Company C, which then took over the employment of some, but not all, of the employees of Company B and carried on the "cleaning" part of the contract with those employees.   A disgruntled cleaner who had not been taken on by Company C sued Company B, saying that he was still employed by them and was therefore entitled to continue to be paid by them.  Company B argued that there had been a transfer of part of an undertaking within the meaning of the French TUPE legislation, with the result that Company's C was now the complainer's employer.  Under reference to the underlying Directive, the Court of Appeal found against Company B, holding inter alia that where there was no transfer of significant corporeal or incorporeal assets, the mere loss of a contract to another employer was not sufficient to bring about the transfer of an undertaking within the meaning of the legislation.

In another unpublished decision (Case C-242/09 Albron Catering BV (21 October 2010) the ECJ created a distinction between "contractual employment" and "non-contractual employment" and held that the Directive can apply to both forms of employment.  On the facts of the case,

this meant that where the catering services for the whole of the Heineken group were provided by employees who were employed (as a matter of contract) by one group company and assigned by their (contractual) employer to work for another group company (the "non-contractual employer"), a transfer of the catering business by the non-contractual employer to an outside entity could indeed, under the Acquired Rights Directive, transfer the employment of the assigned employees. This was so because the Directive applies not only to an employment "contract" but also to an employment "relationship".

The full notes for Michael's talk are available on request from