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Compensation CAP and TUPE

Employment Law & HR
BG Purple

The Employment Appeal Tribunal has ruled that the statutory limit on a week’s pay does not apply to awards made to claimants who are not informed and consulted under the TUPE regulations.

In Zaman and others v Kozee Sleep Products Ltd T/A Dorlux Beds UK, Justice Underhill ruled that the limit on a week’s pay, which rose to £400 on 1 February, and which applies principally to statutory redundancy payments and basic unfair compensation awards, does not apply to the 13 weeks’ compensation which employees whose TUPE rights are breached are entitled to.

Employees have a right to be fully informed and consulted in advance of a TUPE transfer, and a failure by the employers to do this gives rise to a claim for compensation. Under the old TUPE regulations, introduced in 1981, there was no limit on a week’s pay, but when the regulations were overhauled in 2006 they appeared to impose  the statutory limit on awards of this kind.

Without getting over technical, what this case means is that employers who fail to inform and consult workforces in advance of TUPE transfers will be liable to pay up to 13 weeks’ normal pay to all affected staff.

The three claimants in this case saw their compensation shoot up from £4,550 to between £9,100 and £13,000 each.

Any Law At Work client who thinks they may become involved in a transfer should consult their legal manager without delay.

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