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A TUPE transfer will not 'start the clock' on a harassment claim issued against you by an employee who transfers to you, even if the harassing employee does not transfer to you

When considering the time limit for tribunal claims following a transfer under the Transfer of Undertakings (Protection of Employment) Regulations ("TUPE") many people think of the principle set down in Gutridge and others v Sodexo Limited and another (2009), where the time limit to bring a claim under the Equal Pay Act 1970 started to run from the date of the transfer.

However a new case has distinguished itself from Sodexo and made it clear that in harassment cases the time limit only begins to run from the date of the last act of harassment complained of.

In Vernon v Azure Support Services Limited and others the complainant, Ms Vernon, transferred from Port Vale Football Club Limited to Azure Support Services Limited ("Azure") when the catering function of the football club transferred to Azure under TUPE on 4 July 2011. Both before and after the transfer Ms Vernon complained of sexual harassment at the hands of Mr Bedding, who was Port Vale's football sales manager and who remained employed by the club until 1 October 2011. Ms Vernon raised complaints with both Port Vale Football Club and Azure but the harassment continued.

Following Ms Vernon's dismissal on 19 October 2011, for reasons unconnected to the harassment from Mr Bedding, Ms Vernon brought a claim against Mr Bedding, Port Vale Football Club Limited and Azure regarding her subjection to a series of acts of sexual harassment and Port Vale Football Club's and Azure's failure to take action to prevent it. Ms Vernon further alleged the failure of Port Vale Football Club and Azure to act amounted to sex discrimination.

The Employment Tribunal held that Port Vale, as Mr Bedding's employer, was vicariously liable for his actions of harassment. However, as Mr Bedding did not transfer to Azure, Azure could not be vicariously liable for Mr Bedding's harassment. Although the tribunal considered that Ms Vernon's claim was in time (as Mr Bedding's harassment was a continuing act which continued until 1 October 2011 and the transfer did not break the continuity of the act) Ms Vernon was left without a remedy as shortly before the hearing Port Vale went into administration and was debarred from the proceedings. Ms Vernon therefore appealed against the finding that Port Vale's vicarious liability did not transfer to Azure, whilst Azure appealed against Ms Vernon's claim being in time.

At the beginning of the hearing at the Employment Appeal Tribunal ("EAT") Azure conceded that the vicarious liability for the harassment carried out before the transfer by Mr Bedding transferred to Azure under TUPE regulation 4(2) as what is done by the transferor before the transfer is deemed to be as if done by the transferee. The EAT therefore focused on the time limit in which the claim should be brought.

The EAT made a clear distinction based on the legislative definitions for the applicable time limits. The Equality Act 2010 specifies that a claim must be brought within 3 months from the date of the conduct complained of or, in the case of conduct extending over a period, from the end of that period. The EAT contrasted this wording with that under the Equal Pay Act 1970 which states that limitation provision is based on the date when the relevant employment ended (i.e. the date of transfer).

This distinction is an important point to note for employers as although you will not be liable for acts of harassment committed after the date of the transfer where they are not committed by your employee, these acts will serve to extend the period conduct and thus give claimants more time to bring claims in relation to pre-transfer acts. Employers should be wary when assuming time limits for claims have passed.

This case also serves as a warning to transferees to obtain appropriate indemnities of sufficient length to cover situations like this, as well as demonstrating the need to maintain contact with the transferor to encourage them to take action to prevent harassment continuing. If Azure had encouraged Port Vale to take action against Mr Bedding the time limit for Ms Vernon's claim would have started to run long before 1 October 2011.

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