Scrase Law Employment Solicitors

Does an employer remain liable for harassment of an employee if the perpetrator transfers under TUPE?

Where TUPE (the Transfer of Undertakings (Protection of Employment) Regulations 2006) applies, employees automatically transfer from one employer to another with their terms of employment intact. The new employer (transferee) steps into the shoes of the transferring employer (transferor) in relation to the transferred employees.  All of the transferor’s rights, powers, duties and liabilities in connection with the transferring employees’ contracts pass to the new employer.  Any act or omission committed by the transferor is treated as having been done by the new employer.

In a recent case, the Employment Appeal Tribunal (EAT) considered which employer is liable where an individual issues a harassment claim against their former employer, and the perpetrator (but not the individual) then transfers to a new employer under TUPE.

Background

Mr M resigned from his employment with SPT in April 2021.  He issued claims in the Employment Tribunal for unfair constructive dismissal and harassment.  He claimed that the harassment was perpetrated by another employee, Mr O.  The claims were issued against SPT. 

At the start of the Tribunal hearing, SPT applied to amend its response to the claim. It claimed that in July 2021 there had been a transfer of the business to a new company, and that Mr O’s employment had transferred to that new company.  SPT argued that liability for Mr M’s claims had transferred to the new company under TUPE.  The Tribunal refused the application to amend the response.  It upheld Mr M’s claims against SPT and awarded him compensation. 

Did liability for harassment transfer?

SPT appealed to the EAT, arguing that liability for the claim transferred to the new company if Mr O transferred, even if Mr M did not.  The EAT did not agree.  It noted that Mr M was employed at all times by SPT, that he had resigned before the alleged TUPE transfer, and not for reasons connected with the transfer.

The EAT found that even if Mr O’s employment had transferred to a new employer, as Mr M’s employment had not transferred, liability for the claim could not have transferred under TUPE.  TUPE only transfers responsibility to the new employer for acts or omissions in relation to the transferring employee, not for a non-transferring employee.  SPT therefore remained liable for the claim.

Comment

The EAT commented that this was a novel point of law where a claim is brought by a claimant under the Equality Act against their employer; and after the acts complained of, the alleged perpetrator transfers under TUPE to a new employer but the claimant does not.  It found in this case that liability does not transfer unless the claimant also transfers.

Employers can be vicariously liable for acts of harassment by employees done in the course of employment.  However, a claim of harassment can also be issued against individual employees.  In this case, Mr M did not issue a claim against Mr O and so Mr O did not incur any liability. 

We can provide bespoke equality awareness training in your workplace for managers. Contact us to find out more.

Sean Pong Tyres Limited v Mr B Moore

15 February 2024

If you would like to receive monthly employment law updates and news of our events, sign up for our email alerts.

©2024 SCRASE LAW LTD. THIS POST IS FOR GENERAL INFORMATION ONLY AND IS NOT ADVICE. YOU ARE RECOMMENDED TO SEEK PROFESSIONAL ADVICE BEFORE TAKING ANY ACTION ON THE BASIS OF THIS POST