The Transfer of Undertakings (Protection of Employment) Regulations 2006 (known as ‘TUPE’), apply to organisations of all sizes and protect employees’ rights when the organisation or service they work for transfers to a new employer.
TUPE situations can become very complicated where there is a cessation in operation following a transfer. The question of whether a gap in the operation of an economic entity was considered by the Court of Justice of the European Union (CJEU) in the Spanish case of Colino Sigüenza v Ayuntamiento de Valladolid and others.
Colino Sigüenza v Ayuntamiento de Valladolid
Case Summary
The Claimant was employed as a music teacher at a school in Spain. The management of the school was assigned by the local authority to a contractor between 1997 and 2013. Due to a decline in pupil intake and concerns over profitability, the contractor collectively dismissed all the school’s staff on 27th March 2013 and ceased activities on 1st April 2013, two months before the academic year ended.
In August 2013, following a tendering process for the new academic year, the local authority assigned the school’s management to a new contractor which started activities in early September 2013. The new contractor did not engage any of the staff that had been dismissed on 27th March 2013, including the Claimant.
The CJEU highlighted that although the school’s activities had ceased for five months, three months of that period included school holidays. The CJEU concluded that the temporary suspension of activities and the new contractor’s failure to engage the dismissed employees could not preclude the possibility of a TUPE transfer.
Comment
This case serves as an important reminder that a temporary suspension in activities which retain their identity post transfer, will not prevent there from being a transfer which will be caught by TUPE. As is always the case with business transfers or service provision changes each case will turn on its own facts and decisions relating to staff in advance or (and post) a TUPE transfer require careful consideration.
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