It's a trap!

Employment Law Newsletter - May 2014


In this issue ...

  Business – there's no place to hide and it's getting personal   Will better training for managers reduce absence among the staff?  
  A flying start!   Avoiding own goals during the World Cup  
  More than fair shares in TUPE   Collinson Grant HR outsourcing  

Business – there's no place to hide and it's getting personal

In Warm Zones v Sophie Thurley, the High Court decided that an injunction should be issued to compel former employees to allow their former employer, Warm Zones (WZ), to view and copy files on their personal computers.

This was in interlocutory proceedings (before a full trial), where there was strong evidence that the individuals had, when still in employment, copied and/or passed a customer database to a competitor and where the court felt that, if their defence failed at full trial, damages would then be an inadequate remedy for WZ. Nevertheless, those pre-requisites will often be present in such cases. And the ruling is not unique. Less than 12 months' ago, in Fairstar Heavy Transport v Adkins, the Court of Appeal held that material on a director's personal computer could be inspected – on the basis that a principal (the company) is entitled to require its agent (the director or manager) to deliver up material relating to the principal's affairs. So the Warm Zones decision is part of a growing trend favouring employers who seek to discourage improper use of their confidential information.


A flying start!

The figures are out! In the four weeks or so to 6th May, there were about 4,000 enquiries to Acas about early conciliation (see our April issue). And some 99% of enquirers pursued that route.

Of course, the first statistic has little relevance going forward. The now required trigger for potential tribunal claimants to notify Acas and for Acas then to ask about early conciliation means that there will no longer be discretionary 'enquirers' – everybody will be asked about their interest as a matter of course. But what about the rate of uptake? Is that a good indicator of receptive or positive attitudes prevailing henceforth? It might be nice to think so, but remember that the 99% is derived from a pool of those who were motivated to look at the facility voluntarily. And our previous feature noted reasons why employers might well eschew early conciliation, as they are quite entitled to do.


More than fair shares in TUPE

We are used to reciting that an acquisition of a (majority) shareholding does not amount to a TUPE transfer between seller and buyer. In terms, that is quite correct. But this mantra has a couple of wrinkles in it. They are derived from the fundamental principle that the existence (or not) of a TUPE transfer ultimately rests on where the assets, activities and day-to-day management of the acquired company will reside after that transaction.

So, seven years ago, in Millam v The Print Factory, the Court of Appeal was able to find that the purchaser of shares in company X also became, under TUPE, the direct employer of the workforce – because the evidence was that that purchaser (a holding company) was thereafter directly carrying out the activities of company X.

Now, in Jackson Lloyd and Mears Group v Smith, the Employment Appeal Tribunal (EAT) has gone a step farther. A subsidiary (ML) of Mears Group (MG), purchased the shares in Jackson Lloyd (JL). The employees of JL were found, in a separate but 'coextensive' TUPE transfer, to have passed to MG, even though it was not a party to the share transaction. That ruling rested on several indicators which showed that control of the activities of JL had passed directly to MG, whereas ML had been used only as a 'vehicle' to buy the shares. These indicators included:

the introduction into JL of MG's systems, policies, procedures, methods and central services
the removal of JL's directors and their replacement with MG's nominees
statements to JL's employees that MG had acquired JL and that, following an integration programme, they would move over to MG
integration teams from MG working at JL's sites
the consultant overseeing the integration programme reported to the CEO of MG through another MG employee who had been appointed as ML's managing director.

Against these considerations, it counted for little that the employees continued to work in JL livery and that JL was retained as a trading name or brand.

Broadly, this sort of corporate partition for share purchases and these types of subsequent influences or actions by 'group' are not uncommon. But those unwary of the blurred dividing line between share transactions and TUPE transfers can get caught – both by transferring terms and conditions and by financial liability for a failure to comply with a duty to inform/consult with employee representatives pre-transfer which was not appreciated by the parties at the material time.

So beware: while it is accurate to say a share purchase does not automatically or of itself amount to a TUPE transfer, it is dangerous to go so far as to assert that it cannot result in a TUPE transfer.


Will better training for managers reduce absence among the staff?

If you go to the trouble of training your line managers in managing absence only to see it rise immediately afterwards, don't worry. That's what happened to a handful of employers who reported their experiences to XpertHR. The organisations concerned put this down to better record keeping and found that the position soon improved.

The survey, snappily entitled 'Training line managers to manage absence effectively' obtained answers from 225 organisations employing more than 750,000 people. Only one in 10 respondents said training had made no difference while nearly half (48.6%) said they had seen absence fall as a result. That still left 41% who admitted they had no idea whether the investment had produced any return or not.

Most importantly, perhaps, 59% said that training had reduced the cost of absence to the organisation. With lost days estimated to cost companies £595 per employee, it may seem surprising that 23% of organisations still do not provide any training for line managers on managing absence.


Avoiding own goals during the World Cup

Employers that operate night shifts will no doubt be dealing with multiple requests for time off to coincide with World Cup matches. Many will have policies in place to deal with this, and with associated matters such as watching coverage on the internet while at work and alcohol consumption by those allowed to take a break while matches are being played.

Just to complicate matters a little more, employers should be careful not to assume that female employees will be less interested in watching matches than males. Giving time-off requests from men a higher priority than those from women would be discriminatory. And in workplaces where other nationalities involved in the tournament are represented, employers should be careful to treat their requests for time off or flexible working in exactly the same way as those from supporters of the England team.


Collinson Grant HR outsourcing

Some HR services, such as legal compliance and payroll, are mandatory. Many others are only cost-effective if they produce tangible benefits. They are a drain on resources if they do not. You have a choice about what to provide and how. And about how much to spend.

Collinson Grant has been helping clients manage people for more than 40 years. We provide a fully outsourced human resources function that manages people more effectively at lower cost.

Our service covers all aspects of HR. You can select which tasks you want to outsource fully and those you wish to retain in-house. Typically, we reduce the costs of running an HR function by 20%. Outsourcing also puts a wider range of specialist resources at your disposal.

Our clients include some of the UK's largest care home operators, the UK's largest provider of off-street parking, and a distribution business with a turnover of more than £1.4bn. We also work for owner-managed businesses and charities with fewer than 100 employees.

If this approach to managing HR sounds interesting, please contact David Mosscrop on +44 161 703 5600 or e-mail To find out more, go to:


If you would like to discuss this or any other issue facing your organisation please speak to your usual contact at Collinson Grant or Jo Hale on 0161 703 5600

Although care has been taken in the preparation of this Newsletter, Collinson Grant cannot accept responsibility for errors, omissions or advice given. Readers should note that only Acts of Parliament and Statutory Instruments have the force of law and only the courts can authoritatively interpret the law.