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Finality of TUPE settlements

In the recent case of Tamang v ACT Security and Euro Storage the EAT held that where liability is joint and several and a Claimant settles their Tribunal claim against one Respondent, this does not automatically bar them from pursuing the same claims against other potential or actual Respondents.

In Tamang, the Claimants presented claims alleging that during a service provision change from their original employer Reliance to either ACT Security or Euro Storage, there had been a breach of the information and consultation obligations contained within TUPE (where there is joint and several liability) followed by an unfair and wrongful dismissal. They lodged their claims against their original employer, Reliance, and the two potential new employers, ACT Security and Euro Storage.

The Claimants entered into an ACAS settlement agreement with their original employer, Reliance and, as a result of this, the claim lodged against Reliance was withdrawn and dismissed. The Claimants then sought to proceed with their claims against the two potential new employers. The EAT considered whether the Claimants were entitled to do this.

The EAT held that the ACAS settlement agreement was a covenant by the Claimants not to sue Reliance, and not a release of all Respondents to the claim. The agreement was not, therefore, sufficient to discharge the other Respondents’ potential liability.

This case serves as a reminder that when seeking to achieve a full and final settlement of a claim involving a potential TUPE transfer, it is important to consider whether all parties involved in the transfer should sign up to any settlement agreement.

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