Employer Liability for Harassment and TUPE Transfers

In the recent case of Moore v Sean Pong Tyres [2023], the Employment Tribunal considered claims for constructive unfair dismissal, under the Employment Rights Act (ERA) 1996, and harassment, under the Equality Act (EA) 2010. Whilst both claims were brought against the Claimant’s former employer, the allegations concerned harassment by an individual who had subsequently transferred to a new employer under the Transfer of Undertakings (Protection of Employment Regulations 2006 (TUPE).

The Legal Bit

TUPE

Regulation 4 (2) (a) of TUPE confirms that all of the transferor's "rights, powers, duties and liabilities under or in connection with" the transferring employees' contracts pass to the transferee.

Amending a claim or defence

If either party wishes to amend the claim or defence then they must apply for permission to amend the response.

A tribunal can consider the application to amend at any stage of the proceedings (rule 29, Employment Tribunal Rules of Procedure 2013 (ET Rules)). When considering an application to amend the tribunal will be required to consider the nature of the amendment, the applicability of time limits, and the timing and manner of the application. These are known as the Selkent guidelines as they were considered in the case of Selkent Bus Company Ltd v Moore [1996].

Background

The Claimant, Mr Moore, was employed by Sean Pong Tyres Ltd, the Respondent in these proceedings. He resigned in April 2021 and brought claims in the employment tribunal for constructive unfair dismissal and harassment by an individual, Mr Owusu.

In July 2021 Mr Owusu’s, employment was transferred to another Company, Credential.

The argument before the Employment Tribunal

The Respondent sought to argue that liability for the harassing employee’s conduct should transfer to Credential and as such they should be joined as a party to the claims.

The Respondent made the application to amend its defence and to join Credential very late in the proceedings and was criticised by the Tribunal for this.

On considering the application, and using the principles outlined in the case of Selkent, the employment tribunal held that this significant amendment to raise the issue of TUPE as a defence, which constituted a fundamental change of position, and add an additional party at the start of the final hearing was not in accordance with the overriding objective of dealing with cases justly and fairly.

The employment tribunal refused the application and subsequently upheld both claims. The employment tribunal awarded the Claimant £7,486 by way of compensation for unfair dismissal and £14,541.21 by way of compensation under the EA 2010 for injury to feelings.

The Appeal to the Employment Appeal Tribunal

The Respondent appealed, the Employment Appeal Tribunal (EAT) agreed with the Tribunal’s decisions and dismissed the appeal. Nevertheless, it did consider the TUPE issue as a novel matter of law and clarified the following:

1. The purpose of legislation such as the ERA 1996, EA 2010 and TUPE is the protection of employees. It should therefore be read in conjunction with this principle.
2. The harassment occurred whilst both the Claimant and individual concerned were employed with the Respondent.
3. The Claimant resigned in April 2021, and the TUPE transfer occurred in July 2021, for reasons unconnected with the allegations.
4. The Claimant’s employment had not transferred to the new employer, and therefore the Respondent’s liability could not have transferred.

The Respondent referred to the case of Doane v Wimbledon Football Club Ltd and ors, in which a Judge held that Wimbledon Football Club’s vicarious liability for an allegedly negligent tackle by one of its players had transferred to Milton Keynes Dons Ltd when the player’s employment was transferred. The EAT considered the case highly persuasive in respect of the position for the vicarious liability of a transferor employer in tort for the negligent act of an employee whose employment had been transferred. However, it was not persuaded that it was applicable to the position of an employer’s primary liability under EA 2010. Furthermore, it held that without the contractual relationship between the Claimant and the tortfeasor’s new employer, the EA 2010 imposes no duties.

Given the analysis of the TUPE point as a potential defence, the EAT confirmed that any procedural issues in relation to the refused late application would therefore be immaterial to the outcome of the finding of harassment and constructive unfair dismissal. The respondent’s TUPE argument could not change the fact that the claimant had properly brought the claim against his employer.

Comment

This novel case sheds light on the position of an employer’s obligations to its employees in the workplace and serves as a remind of an employer’s duty to prevent discrimination and harassment, regardless of whether individual(s) responsible for misconduct subsequently transfer to another employer under TUPE.

Our employment team can provide expert advice in relation to TUPE queries and its application.