New Wrinkle to TUPE Law – Verbal Commitments?

There is a recent ruling (Whitney v. Monster Worldwide Ltd) that is going to make HR folks shudder a bit. Typically occupational pension scheme do not convert to the new employer as part of the TUPE undertaking, but in this case it happened. Here is the scenario.
1. Employee worked form employer B, and were part for a pension scheme that was closed in 1989. He and the other employees were given a “no Detriment” pension guarantee.
2. The guarantee occurred verbally, and there is no paper record
3. Employer A buys Employer B, and in that transactions they promise to honour previous employer commitments”including pay and benefits”
4. The employee brought claim saying based on the guarantee that his pension should have gone up every year.
5. The employee Won
So how do you do due diligence in a TUPE transfer on previous verbal commitments? Fun times! So if any of my EMEA colleagues want to comment – please do!

(Source – People Management Magazine Online)

2 thoughts on “New Wrinkle to TUPE Law – Verbal Commitments?

  1. The judgment makes it clear that the right transfers, not by application of the TUPE Regulations, but by contractual novation. Due diligence has always had to look for verbal promises, in addition to written and regulatory evidence, so this is just about how good your HR due diligence is in a transfer of undertaking.

    Regards
    Paul Strange

  2. This goes back to how a contract is formed between an employer and employee – offer, acceptance and consideration. As we all know contractual terms transfer under TUPE so this could be the first of many and as Paul says – due diligence,warranties, indemnities will all help protect the acquiring employer. A comprehensive, open pre transfer employee question and answer process might have brought this to light in time….
    Regards

    Rupert Brice 07786312359

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