Mark Ellis Blog

Obviously the venerable Victorian novelist was not gazing into his crystal ball and assessing a particular piece of 21st century legislation when he penned Mr Bumble’s infamous outpouring. However many agree that Dickens’ critique of stupid, inequitable laws is an apt a preamble to the TUPE Regulations as could be.

Arguably, Mr Dickens’ is being somewhat unfair to Ass, Donkeys, mules etc, as these beasts of burden can be extremely helpful and useful. I have very fond memories of seaside jaunts up and down Scarborough & Bridlington beaches on donkeys with names such as Saturn, Poppy, Willow & Snowdrop.

Drawing upon his own experiences as a legal clerk then a member of the English Bar, his novels: Bleak House, Dombey & Son and Nicholas Nickleby clearly evidence a writer who was no great fan of an English Legal System that gave birth to unjust and inept laws. His vivid writings and descriptions of the endless machinations, strangling bureaucracy and red tape of the legal system of mid-19th-century England, perfectly satirized in the fictional, interminable court case of Jarndyce v Jarndyce,  were clearly a vehicle for dissemination of Dickens’s own views regarding, particularly, the injustice and chronic exploitation of individuals by legal systems, wherein the only individuals who benefit are the  “Fat Cat” lawyers.

Vague, complex, indecipherable, unworkable, unintelligible; all suitable epithets for the TUPE Regulations? On balance perhaps the TUPE acronym is better served by “Totally Unworkable, Penalises Everybody.” ?

Experienced Employment Lawyers, whether they act for individual Claimants, Trade Unions or Respondent companies, wrestle with the opaqueness of the TUPE Regulations. I have listened to numerous Solicitors and Barristers who when advising clients on whether a particular buy-out, acquisition or service provision change will constitute a TUPE transfer, are incapable of definitively saying whether a particular transaction is a TUPE transfer or not, this is clearly not satisfactory for any party. It is ultimately left to the Employment Tribunal as a finding of fact to decide whether a particular transaction is a TUPE transfer or not. As such the TUPE Regulations have resulted in more litigation not less due to their inexcusable lack of clarity and the expenditure of unnecessary legal costs by all parties.

Within the TUPE Regulations we find vague legal definitions which ultimately underpin and determine whether TUPE will or will not apply. Indeterminate terms such as  “Relevant Transfer”, “Stable Economic Entity”, “Retention of Identity” ,”Assignment” are all open to a myriad of interpretations and which again will only find any finality when the particular Employment Tribunal is ultimately called upon to arbitrate the particular issue. It is no wonder that the TUPE Regulations have spawned a ridiculous volume of conflicting and contradictory case law.

I have tried to square such cases and to be honest it makes your head bleed and you need a few stiff whiskies afterwards to recover any ounce of sanity. I am sure many academic lawyers out there would be happy to sit down with me over a peaty Lagavulin or honeyed Dalwhinnie single malt and pore over these decisions for hours in an attempt to rationalise how these cases were decided, which principles the court applied and how one can distinguish certain cases on particular facts. But this is just the point I am making.
If it takes hours of academic extrapolation by learned lawyers to attempt to unravel the case law offspring of TUPE, this is simply not satisfactory, especially when it involves costs to UK businesses which can stretch to £millions. Lawyers should be able to give concise and definitive advice to their clients and not sign off with cautionary, uncertain legal advice that therefore “TUPE may/may not apply”.

Further, stark examples of the very real and damaging impact due to the imprecise language of TUPE are found in its application in relation to the rescuing of Insolvent Businesses. The Government wanted/wants TUPE to promote a rescue culture within the economy for failing companies and to avoid job losses and redundancies. The TUPE Regulations result in the exact opposite and has lead to large scale job losses as potential buyers of failing businesses and Insolvency Practitioners are left uncertain as to what liabilities will be acquired as a result of an attempted rescue buy-out. As a result potential buyers are frightened off. Take the sad demise of Woolworths Plc, the closing of its 815 stores and the lamentable loss of thousands of jobs. Numerous rescue plans were mooted in the media and business pages. As no potential buyer could be certain as to the precise impact of the TUPE Regulations, they were not prepared to fumble about in the dark and suck it and see. As a result thousands of individuals lost their jobs and a well known high street brand was lost forever. 

This is no way for a 21st Century legal system to operate, especially in such a fundamentally important arena such as business transactions. Another point is that the mechanics and operation of TUPE itself frightens off potential buyers of failing businesses. No owner of a successful company wants to potentially pick up the liabilities of a lame duck business.

It is reported that potentially half of Woolworths’ 815 stores and approximately half of the jobs could have been saved if a potential buyer could have acquired Woolworths without all the resulting TUPE acquired liabilities.
In this respect, Unions, employees and employers alike should rally and unite in a call for a radical re-drafting of TUPE. Further, I would call upon the EU to abolish it and start again for the sake of jobs and businesses across Europe and not just UK Plc. It is estimated that TUPE alone, since 2006 has cost UK businesses £billions in its application, capital I am sure could have been better utilised in a time of tight finance and credit.

I know I am not alone in these views and over the past few months I have seen many lobbying bodies call for a radical review of TUPE. The IPA (Institute of Practitioners in Advertising), the ISBA (“the voice of British advertising), the PRCA (Public Relations Consultants Association), as well as many Insolvency Practitioners and Legal Firms are united in calling for a TUPE rethink and/or repeal or abolish. 

The whole premise of TUPE was to save jobs, in this respect it has failed wholescale and like any medication which cures the ailment but kills the patient in the process it should be done away with immediately.