Transferring continuity

Under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE),2006, a transfer must take place at a particular point in time. The Employment Appeal Tribunal (EAT) in Services for Education v White and Birmingham City Council considered whether this was also the case when assessing continuity of employment in the context of a TUPE transfer, and held that the precise identification of “the time of the transfer” for these purposes was a question of fact and degree.

Basic facts

Mr White worked as a sessional music teacher for Birmingham Music Services (part of the Council) under a series of contracts from 1992 which ran from September to the end of July the next year. The last contract expired on 31 July 2013.

In October 2011, the Council started consulting with the unions about a proposed transfer of Birmingham Music Services to S4E, a company limited by guarantee, under TUPE. The transfer was delayed for a number of reasons and the transfer agreement was not made until 1 September 2013. At the beginning of September, S4E gave Mr White a contract of employment, although he did not return it to them. He then worked for S4E under the standard terms.

He subsequently lodged claims against both the Council and S4E for unfair dismissal and unpaid holiday pay on the basis that he had been dismissed by S4E and re-engaged on different terms. Mr White argued that although there was no contract between him and the Council during the summer holidays, section 212 of the Employment Rights Act (ERA) 1996 meant that he had sufficient continuity of employment to bring an unfair dismissal claim.

Relevant law on continuity of service

Section 212(3)(b) ERA states that any week when an employee is absent from work on account of a temporary cessation of work counts in computing their period of employment.

Section 218(2) ERA states that if a business is transferred from one person to another, the employee’s period of employment in the business “at the time of the transfer” counts as a period of employment with the transferee, and the transfer does not break the continuity of the period of employment.

Tribunal decision

The tribunal held that by 1 August 2013, Mr White was no longer the Council’s employee due to the expiry of his fixed-term contract. However, because his absence was due to a temporary cessation of work, his continuity of employment with the Council was preserved by section 212(3)(b) ERA.

As Mr White had been employed “during the period of time covered by the transfer”, bearing in mind that the negotiations and transfer process had begun well before his final fixed-term contract and were ongoing until 1 September 2013, the tribunal found that any gap in his employment was due to the machinery of the transfer and therefore he maintained his continuity of service when his contract with S4E commenced.

EAT decision

The EAT held that the issue was whether Mr White had a period of employment with the Council at the time of the transfer. It said that the tribunal was wrong to rely on section 212(3)(b) because it only applied to employment with one employer, and if Mr White’s employment with the Council ended on 31 July 2013, then his continuity was broken before the transfer.

However, it went on to find that the tribunal was entitled to hold that 31 July 2013 was a date during “the time of the transfer”. It agreed that the transfer in this case was a complex process, with a number of associated transactions as opposed to a single, instantaneous transaction. As such, the precise identification of “the time of the transfer” was a question of fact and degree for the tribunal to decide.

As Mr White was employed by the Council up until 31 July 2013, which was during the time of the transfer, and had worked for S4E after that, he had sufficient continuity of employment to bring an unfair dismissal claim against S4E.