Moving Employees to a New Employer

Businesses sometimes move their employees from one employer company to another. A recent case at the Employment Appeal Tribunal has emphasised the importance of getting consent from the employees in order to make this effective.

The case concerned Peninsula Business Services Ltd. Peninsula bought the shares of a consulting company, Taxwise. Peninsula moved one of its employees, Ms G, to work in the Taxwise department. A year later, she was moved to the Taxwise payroll. A year after that, Peninsula sent an email informing its employees working in Taxwise that their employment was being transferred and Taxwise would be their new employer. However, Ms G never received the email. Although she received payslips and a P60 identifying Taxwise as her employer, she continued to believe that she was employed by Peninsula.

The EAT ruled that the transfer to Taxwise was not effective because Ms G had no knowledge and had not consented to it. She remained a Peninsula employee until the time that she was specifically informed that Taxwise was her employer.

In these situations, it is vital that the employees are informed of the transfer of their employment and consent to it. Although consent may be implied, the best position is to obtain the employees’ express agreement.

Note that this was not a TUPE scenario – that is a topic in itself!

For more information please contact Martin Sinclair or Nicola Gray or call 01224 632464.