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Claimants can continue claims against other respondents even after signing COT3 with one respondent – holds the EAT.

SUMMARY: The Employment Appeal Tribunal has held that a claimant can continue claims against other respondents even when it has signed a COT3 with one respondent.

Background

In the case of Tanang and another v Act Security Ltd and another, the Employment Appeal Tribunal (“EAT”) considered whether Mr T and Mr W (“the Claimants”) could continue to pursue claims against two respondents when it had reached a settlement of a tribunal claim with a third respondent in the form of a COT3 agreement.  A COT3 is a settlement agreement negotiated with the assistance of an ACAS conciliation officer in relation to a tribunal claim.

This case related to a failure to inform and consult in relation to an outsourcing of security services which was governed by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).

Under TUPE, the employers both before and after the transfer have an obligation to inform and (if appropriate) consult with representatives of employees who may be affected by the transfer or any measures taken in relation to it.  Liability for a failure to inform and consult is joint and several.  The respondents in this case could have therefore potentially been held jointly and severally liable for a failure to inform and consult under TUPE.

Facts

The Claimants were employed by Reliance and worked as security guards at a site leased to Euro.  The Claimants were informed in June 2010 that they would not be working for Reliance as ACT had taken over the site.

The Claimants brought claims against Reliance, Euro and ACT for failure to inform and consult under the TUPE Regulations.  The Claimants subsequently agreed to a settlement with the assistance of ACAS by using a COT3.  The settlement agreement referred to proceedings against Reliance only.

The Claimants attempted to continue their claims against Euro and ACT, but an employment tribunal judge held that they could not continue their claims against Euro and ACT due to the settlement they had reached.  The Claimants appealed against this decision.

Decision

The EAT overturned the employment tribunal judge’s decision and held that the Claimants could continue their claims against Euro and ACT.  This was the case even though Reliance was one of the respondents which could in theory be held jointly and severally liable with Euro and ACT, should the Claimant’s claims succeed.

What does this mean for employers?

Employers should ensure that if a settlement is intended to result in the claimant being unable to bring proceedings against any potential respondents, all potential respondents should be expressly named as parties to the settlement agreement.

If an employer becomes aware of a settlement agreement being made by another organisation with an individual which it currently or formerly employed, it should take an active interest in this settlement agreement.  Commonly this type of scenario will arise where TUPE is involved, but equally may be relevant in discrimination claims.  If an employer is unsure whether it may have a responsibility to inform and potentially consult and could do so under TUPE, we would strongly advise seeking legal advice.

We would also advise ensuring that appropriate warranties and indemnities are in place in relation to the obligation to inform and consult with the relevant contracting parties, if there is a possibility that the TUPE Regulations apply.  We cannot detail here all the instances where the TUPE Regulations apply, but this should be considered, for example, where services carried out in-house are being outsourced, where services are being brought back in-house, or where one organisation is acquiring another organisation.

Hazel Robbins, Solicitor

Contact Information

fgmedia@floydgraham.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice. 

Updated: by FG Solicitors
Call us on:  0808 172 93 22

CLAIMANTS CAN CONTINUE CLAIMS AGAINST OTHER RESPONDENTS EVEN AFTER SIGNING COT3 WITH ONE RESPONDENT – HOLDS THE EAT.

SUMMARY: The Employment Appeal Tribunal has held that a claimant can continue claims against other respondents even when it has signed a COT3 with one respondent.

Background

In the case of Tanang and another v Act Security Ltd and another, the Employment Appeal Tribunal (“EAT”) considered whether Mr T and Mr W (“the Claimants”) could continue to pursue claims against two respondents when it had reached a settlement of a tribunal claim with a third respondent in the form of a COT3 agreement.  A COT3 is a settlement agreement negotiated with the assistance of an ACAS conciliation officer in relation to a tribunal claim.

This case related to a failure to inform and consult in relation to an outsourcing of security services which was governed by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).

Under TUPE, the employers both before and after the transfer have an obligation to inform and (if appropriate) consult with representatives of employees who may be affected by the transfer or any measures taken in relation to it.  Liability for a failure to inform and consult is joint and several.  The respondents in this case could have therefore potentially been held jointly and severally liable for a failure to inform and consult under TUPE.

Facts

The Claimants were employed by Reliance and worked as security guards at a site leased to Euro.  The Claimants were informed in June 2010 that they would not be working for Reliance as ACT had taken over the site.

The Claimants brought claims against Reliance, Euro and ACT for failure to inform and consult under the TUPE Regulations.  The Claimants subsequently agreed to a settlement with the assistance of ACAS by using a COT3.  The settlement agreement referred to proceedings against Reliance only.

The Claimants attempted to continue their claims against Euro and ACT, but an employment tribunal judge held that they could not continue their claims against Euro and ACT due to the settlement they had reached.  The Claimants appealed against this decision.

Decision

The EAT overturned the employment tribunal judge’s decision and held that the Claimants could continue their claims against Euro and ACT.  This was the case even though Reliance was one of the respondents which could in theory be held jointly and severally liable with Euro and ACT, should the Claimant’s claims succeed.

What does this mean for employers?

Employers should ensure that if a settlement is intended to result in the claimant being unable to bring proceedings against any potential respondents, all potential respondents should be expressly named as parties to the settlement agreement.

If an employer becomes aware of a settlement agreement being made by another organisation with an individual which it currently or formerly employed, it should take an active interest in this settlement agreement.  Commonly this type of scenario will arise where TUPE is involved, but equally may be relevant in discrimination claims.  If an employer is unsure whether it may have a responsibility to inform and potentially consult and could do so under TUPE, we would strongly advise seeking legal advice.

We would also advise ensuring that appropriate warranties and indemnities are in place in relation to the obligation to inform and consult with the relevant contracting parties, if there is a possibility that the TUPE Regulations apply.  We cannot detail here all the instances where the TUPE Regulations apply, but this should be considered, for example, where services carried out in-house are being outsourced, where services are being brought back in-house, or where one organisation is acquiring another organisation.

Hazel Robbins, Solicitor

Contact Information

fgmedia@floydgraham.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.