TUPE: incorrect statement on ELI was not a breach of Reg 11

13.07.2017

The EAT has held in Born London Ltd -v- Spire Production Services Limited 2017 that a transferor was not liable for incorrectly stating in the employee liability information (ELI) it provided to the transferor that a bonus was non-contractual. The duty to give ELI is not limited only to contractual terms, nor is there an obligation on the transferor to distinguish between contractual and non-contractual matters.
Thirty two employees transferred from Spire to Born. Spire provided the ELI in accordance with Reg 11 of TUPE, and it separated the transferring employees’ terms and conditions into two sections, contractual and non-contractual. Spire listed a Christmas bonus in the non-contractual section. It later emerged that the bonus was contractual (or was likely to be) and Born sought compensation form Spire for providing incorrect ELI.form Spire for providing incorrect ELI.
The Tribunal dismissed Born’s claim, and an appeal against this decision was dismissed by the EAT. The obligation to provide ELI is not limited to providing contractual information only (Born had argued that if ELI was intended to be contractual information only, then by stating the bonus was non-contractual Spire had failed to give all the required contractual information). Furthermore, there is no requirement to specify whether or not a particular term is contractual. The ELI alone might not enable a transferee to understand whether a term, such as a bonus, is contractual or not, but it is up to the transferee to resolve this issue for itself by carrying out due diligence.

Justin Costley

Author