Mrs K Killian & Others v Icon Consultancy Limited and 1 other — 2019

This was a preliminary hearing to decide whether the 1 February 2018 sale of the entire share capital of Icon Consultancy Limited to Sweet Squared was a relevant transfer for TUPE purposes. The tribunal found that the transaction on 1 February 2018 was a share sale only. It noted that 15 claimants were involved, that only two senior employees had known in advance that a sale was possible, and that the employees were not consulted before the share sale.

The tribunal applied the established approach that a share sale does not ordinarily amount to a transfer of an undertaking, while also recognising that a relevant transfer can be found on the facts if the purchaser in substance takes over day-to-day control of the business. It referred to Brookes v Borough Care Services Ltd, Print Factory (London) 1991 Ltd v Millam, ICAP Management Services Ltd v Berry, and Guvera Ltd v Butler. On the evidence, it found that the new directors’ role after 1 February 2018 was not determinative, and that Mr Mortimer’s involvement was at a strategic or information-gathering level rather than day-to-day operational control.

The tribunal accepted that Mr Raza’s day-to-day work remained broadly the same after the share sale, with his line management unchanged. It also relied on evidence that the first respondent continued to operate separately after 1 February 2018: a separate payroll arrangement was used, payslips remained in the first respondent’s name, employees kept their first respondent email addresses and benefits, and the two businesses continued to sell distinct products. Consultation under TUPE began on 5 March 2018 and the staff transfer took place on 1 June 2018 after the consultation process.

The tribunal therefore held that the 1 February 2018 share sale was not a relevant transfer and did not trigger an obligation to inform and consult affected employees under TUPE. The claimants’ claims that both respondents failed to inform and consult before the share sale were dismissed.