Perth and Kinross Council v Tony Donaldson and 14 Others Newtown Construction Scotland Ltd Meldru: EAT 30 Oct 2003

EAT Transfer of Undertakings – Acquired rights directive
The European Acquired rights directive sought to protect the rights of employees on the a transfer of a business to another employer. It was transposed into UK law by regulations purportedly made under 2(2) of the 1972 Act. The tribunal held that TUPE applied where the employer became irretrievably insolvent. It was to be considered whether, if TUPE did cover the case, it was to that extent ultra vires, because the Directive did not require the UK to afford that degree of protection in an irretrievable insolvency.
Held: The relevant provision was ultra vires. If it was desired to cover a business in that situation, recourse would have to be had to primary legislation. Lord Johnston: ‘[A] very material question of law arises which does not seem to have been decided authoritatively in the United Kingdom. The broad issue is whether or not, when a European Directive is implemented by subsidiary legislation of the United Kingdom parliament, under section 2 of the Treaty of Rome Act 1972 [sic], can the relevant Regulations be intra vires if the effect of those Regulations brought in by the UK Parliament is to widen the scope of the Directive which it is seeking to implement.’ and ‘The Tribunal focussed on this matter in Addison v. Denholm Ship Management (UK) Ltd [1997] IRLR, commenting critically upon a case R v. Secretary of State for Industry ex parte UNISON [1996] ICR 1003. This Tribunal stated in this context, ‘The child cannot be larger, wider or have great implications than its parent allows. . . Whatever may be the position of a liquidator with regard to the sale of a business as a going concern, when it comes to irretrievable insolvency and cessation of business, we are satisfied that European jurisprudence does not admit the application of the ARD Directive. If it is to be suggested that TUPE has effectively allowed the Directive to operate in that context we consider that if falls foul of the approach that we adopted in Addison to the effect that it is going beyond the scope of the Directive and would in that respect be ultra vires. The issue requires to be addressed by primary legislation.’ Although the Directive did not apply to a case of irretrievable insolvency and cessation of business, neither did it prevent a member state from providing employment protection in such circumstances if it so desired.


The Honourable Lord Johnston




European Communities Act 1972 2(2)

Cited by:

CitedOakley Inc v Animal Ltd and others PatC 17-Feb-2005
A design for sunglasses was challenged for prior publication. However the law in England differed from that apparently imposed from Europe as to the existence of a 12 month period of grace before applying for registration.
Held: Instruments . .
Lists of cited by and citing cases may be incomplete.


Updated: 16 May 2022; Ref: scu.188427