Sean Pong Tyres Ltd v Moore – TUPE does not transfer liability for discrimination and harassment

Summary

The facts of this case were that Mr Moore resigned from Sean Pong Tyres Ltd on the basis that he was being subject to unlawful discrimination and harassment by Mr Owusu. Once the employee resigned, he brought a claim for unfair constructive dismissal, age and race related discrimination and harassment. Mr Moore’s claims were brought specifically against the employer rather than Mr Owusu. One month after the employee made the claim, Mr Owusu transferred to another company by way of a TUPE transfer.

The employer tried to argue that liability had transferred to Mr Owusu’s new employer. The EAT dismissed their appeal, finding that liability under the Equality Act did not pass to a transferee where the individual making the claim also did not transfer under TUPE. Given that the employee had resigned well before the TUPE transfer, his employment was at all times with the employer. As such, the liability for the unfair dismissal claim lay directly with the employer.

It was also found that in order to suggest that liability had transferred to Mr Owusu’s new employer by way of TUPE, Mr Moore would have been required to bring a claim against Mr Owusu’s new employer directly and given that he had no contractual or employment relationship with that company, he had no right to bring such a claim.

Key takeaway points

This case highlights the duty of employers to ensure that harassment and discrimination are prevented in the workplace, regardless of whether the responsible individual has moved or transferred to another company by way of TUPE. Sean Pong Tyres Ltd remained liable for the unfair dismissal and were required to compensate the employee around £22,000.

Ahead of any TUPE transfers, employers should always ensure that they are carrying out thorough due diligence investigations to confirm that there are no historic or pending claims which relate to either transferring or remaining employees.

If issues do arise ahead of a TUPE transfer, employers may be able to obtain warranties and indemnities to provide protection for claims but they need to be aware of all the facts so that they have a full picture of what the potential liability could be. If employers have any queries in relation to TUPE and its application, they should consult a solicitor to ensure that they are fully protected.