Transfer of Undertakings; Share Incentive Plan; Obligation ‘In Connection With’ The Contract of Employment
The claimant’s contract of employment transferred to the appellant under TUPE, 2006 on 1 May 2020. Prior to the transfer, he had been a member of a Share Incentive Plan operated by the transferor which he had joined in August 2018 pursuant to an agreement amongst the claimant, the transferor and the plan trustees. The appellant having refused to provide an equivalent scheme, the claimant brought proceedings before the Employment Tribunal in terms of sections 11 and 12 of the Employment Rights Act, 1996. The Tribunal upheld his claims and found that he was entitled, after the transfer, to participate in a scheme of substantial equivalence to that operated by the transferor (MITIE Managed Services Limited v. French [2002] ICR 1395). The appellant contended that the obligations created when the respondent joined the transferor’s scheme did not arise either ‘under’ the contract of employment or ‘in connection with’ that contract (Chapman v. CP Computer Group [1987] IRLR 462). Accordingly, Regulation 4(2)(a) of TUPE did not apply. The claimant conceded that the obligations in question did not arise ‘under’ the contract, but contended that they arose ‘in connection with’ that contract. It was also argued that the Tribunal’s order was not competent.
Held: Even if the obligations created by the August 2018 Partnership Share Agreement did not arise ‘under’ the contract of employment, they plainly arose ‘in connection with’ that contract for the purposes of Regulation 4(2)(a) of TUPE. Chapman had been decided without reference to the words ‘or in connection with’ under what was then Regulation 5(2)(a) of TUPE, 1981. Chapman was, in any event, distinguishable. Since Regulation 4(2)(a) was engaged, the Tribunal had been correct to hold that MITIE applied. The order pronounced by the Tribunal was competent but should have referred to the statutory statement of particulars rather than to ‘terms and conditions of employment’. Subject to that minor adjustment to paragraph 2 of the Tribunal’s Judgment, the appeal was refused.
Judges:
The Honourable Lord Fairley
Citations:
[2022] EAT 140
Links:
Jurisdiction:
England and Wales
Employment
Updated: 01 October 2022; Ref: scu.681364
