By Helen Barney
Helen Barney discusses the case of Profile Security Services Ltd v Charter Security Plc (ET 3203710/10) which dealt with employee liability provisions and Regulation 11 and 12 TUPE.
An interesting Employment Tribunal case that I was involved in for two days before East London Tribunal recently concerned liability and quantum pursuant to Regulations 11 and 12 TUPE Regulations 2006. There is no apparent reported authority on the employee liability provisions and the Employment Judge confessed the Tribunal would be entering into unchartered territory.
Charter Security provided concierge services for high rise blocks owned by Thurrock Council. The contract was due to expire and a tendering exercise was embarked upon. As part of the tendering process Charter provided Profile Security with a copy of a spreadsheet containing TUPE information. The rate of pay cited for the guards on site was £6.50 per hour. Based on the information provided Profile completed its tender document and was successfully awarded the contract by Thurrock Council.
Three days prior to transfer, after a number of chasing e-mails, Charter provided to Profile ‘updated’ TUPE information. The rate of pay had changed to £7 per hour. Thereby, extinguishing any profit margin Profile had accounted for in the tendering process. 
Profile sought to renegotiate terms with Thurrock Council to no avail. Charter provided explanations as to why the hourly rate of pay had changed, to include a raise allegedly in line with the national minimum wage and the original terms of the contract. The contract was for a 4 year period and Profile were set to loose roughly £40,000.
Regulation 11 TUPE Regulations 2006 states:
Notification of Employee Liability Information
(1) The transferor shall notify to the transferee the employee liability information of any person employed by him who is assigned to the organised grouping of resources or employees that is the subject of a relevant transfer —
-(a) in writing; or
-(b) by making it available to him in a readily accessible form.
(2) In this regulation and in regulation 12 “employee liability information” means—
-(a) the identity and age of the employee;
-(b) those particulars of employment that an employer is obliged to give to an employee pursuant to section 1 of the 1996 Act;
-(c) information of any—
–(i) disciplinary procedure taken against an employee;
–(ii) grievance procedure taken by an employee,
within the previous two years, in circumstances where the Employment Act 2002 (Dispute Resolution) Regulations 2004(1) apply;
-(d) information of any court or tribunal case, claim or action—
–(i) brought by an employee against the transferor, within the previous two years;
–(ii) that the transferor has reasonable grounds to believe that an employee may bring against the transferee, arising out of the employee’s employment with the transferor; and
-(e) information of any collective agreement which will have effect after the transfer, in its application in relation to the employee, pursuant to regulation 5(a).
(3) Employee liability information shall contain information as at a specified date not more than fourteen days before the date on which the information is notified to the transferee.
(5) Following notification of the employee liability information in accordance with this regulation, the transferor shall notify the transferee in writing of any change in the employee liability information.
(6) A notification under this regulation shall be given not less than fourteen days before the relevant transfer or, if special circumstances make this not reasonably practicable, as soon as reasonably practicable thereafter. 
(7) A notification under this regulation may be given—
-(a) in more than one installment;
-(b) indirectly, through a third
In respect of remedy Regulation 12 provides:
Remedy for failure to notify employee liability information
… (3) Where an employment tribunal finds a complaint under paragraph (1) well-founded, the tribunal—
-(a) shall make a declaration to that effect; and
-(b) may make an award of compensation to be paid by the transferor to the transferee.
(4) The amount of the compensation shall be such as the tribunal considers just and equitable in all the circumstances, subject to paragraph (5), having particular regard to—
-(a) any loss sustained by the transferee which is attributable to the matters complained of; and
-(b)the terms of any contract between the transferor and the transferee relating to the transfer under which the transferor may be liable to pay any sum to the transferee in respect of a failure to notify the transferee of employee liability information.
(5) Subject to paragraph (6), the amount of compensation awarded under paragraph (3) shall be not less than £500 per employee in respect of whom the transferor has failed to comply with a provision of regulation 11, unless the tribunal considers it just and equitable, in all the circumstances, to award a lesser sum.
(6) In ascertaining the loss referred to in paragraph (4)(a) the tribunal shall apply the same rule concerning the duty of a person to mitigate his loss as applies to any damages recoverable under the common law of England and Wales, Northern Ireland or Scotland, as applicable.
The Tribunal concluded that Charter had initially complied with Regulation 11(1) and 11(3). However, Charter had breached Regulation 11(5) by failing to provide the change in TUPE information required. The Tribunal rejected Charter’s explanations for the change in pay as ‘unconvincing’ and ‘incredible’. It was accepted by the Tribunal that a conclusion that could be drawn from the circumstances was that Charter had increased the site rate at the 11th hour to deliberately deprive Profile the profitability on the contract.
Equally, the Tribunal concluded that any alleged ‘internal incompetencies’ could not amount to ‘special circumstances’ justifying an extension of the 14 day time frame envisaged by Regulation 11(6). 
The Tribunal accepted that Profile had sought to mitigate its losses and that the losses for the 4 year contract period were reasonably foreseeable. Accordingly, the Tribunal awarded compensation in the sum of £40,331.
Although a breach of the initial duty to provide employee liability information could not be established on the facts, the continuing duty to provide any change in information proved vital in protecting the interests of the transferee. In industries such as the provision of security services, in which contractual documents between the transferor and transferee are invariably non-existent, Regulations 11 and 12 can provide an effective remedy against such sharp practice and possible incompetence. 
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