A recent ruling by the European Court of Justice (ECJ) has posed some interesting questions on the timescale under which the normal rules of a TUPE transfer apply.
The matter revolved around a Spanish music teacher. He was employed to teach in a music school by a contractor that was managing service provision for a local authority. Falling pupil numbers placed the contractor in financial difficulties that led, ultimately, to its ceasing to operate, but not before it dismissed all of its staff. This was in April 2013. The following August a new contractor was appointed and the school reopened in the September, but with an entirely new staff.
The teacher, Mr Colino Sigüenza, argued that under the EU’s Acquired Rights Directive (TUPE in the UK) his employment should have been transferred, but the Spanish court disagreed. It argued that there had been no transfer of an economic entity, because the claimant had been dismissed by a contractor that then ceased to exist, and the new contractor had been awarded the work following a five-month gap and a new tendering process.
The ECJ thought differently. Its ruling is that because three out of the five months of the gap would have been school holiday anyway, meaning the school would have been closed, and because the new contractor was using the same premises and physical resources such as instruments, an argument for a TUPE transfer can be made. The matter has been referred back to Spain’s national court of appeal.
The existing UK TUPE laws are already slightly broader than those in Spain, so here this issue would may have been less contentious, but the matter serves as a useful reminder that the suspension of services or activities for a period, even for several months, does not, in and of itself, mean that TUPE does not apply.
Have a question about TUPE transfers? Contact Alison via email for more information.
