House of Lords on Secondment

 Weekly Law Reports Case Summaries

Seconded Employees Subsequently Employed - When
Does Continuous Employment Begin?
North Wales Training and Enterprise Council Ltd (t/a Celtec) v
Astley and others
HL
21 June 2006
Daily Law Notes Report Summary
House of Lords Judgment
A group of civil servants whose department was privatised in 1990
were to be deemed to have transferred to the new undertaking at
that time even though they initially worked for it on secondment
and did not resign from the civil service to become employees of
the transferee until 1993. They had thus changed employer "by
reason of" the transfer of the undertaking within art 3(1) of the
"Acquired Rights" Directive 77/187/EEC and their continuous
employment began when they had commenced work for the Civil
Service.

And see Daniel Barnett's commentary below:

 Date of TUPE Transfers
21 June 2006
The House of Lords has handed down a 4:1 ruling in Celtec v
Astley, following the ECJ's decision last year.
Upholding the employment tribunal and Court of Appeal's decisions,
but on different grounds, it held:
* following the ECJ ruling, a TUPE transfer must take place on a
specific date, rather than over an extended period
* employees and employers cannot agree or arrange fo the transfer
to take place on a date other than the true legal date of the
transfer.
It is a complicated decision, made slightly easier if put into its
factual background. In the early 1990s, the Department of
Education created Training and Enterprise Councils (TECs) to take
over its responsibility for training young people.
A large number of civil servants were seconded from the DofE to
the TECs. Three years later, they were offered the opportunity to
return to the DofE, or stay with the TECs and be transferred into
the employment of the TECs. Thus in 1993, the Claimants resigned
from the DofE and signed new contracts with Celtec (the employer)
The TUPE transfer (when the TECs actually opened for business) was
found to be in September 1990.
When the Claimants were made redundant in 1998, they claimed
redundancy payments based on continuity of employment back to the
beginning of their employment with the DofE. Celtec argued that
they were only entitled to continuity of employment from 1993.
The House of Lords, in five separate opinions, decided (4:1) that,
in fact, the Claimants had all TUPE-transferred to Celtec in
September 1990, irrespective of the fact that everyone believed
they remained employees of the DofE and had simply been seconded
out. Because it was not possible for the parties to agree a
different transfer date, the operation of TUPE 'trumped' any
understanding or arrangement between the parties. Accordingly, the
Claimants were entitled to rely on their continuity of employment
with the DofE.
The dissenting judgment (that of Lord Mance) is impressive and
worth reading, to appreciate the potential commercial implications
of this decision.