The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Joint contracts are used in the social housing sector for a variety of reasons and this decision will give comfort to those organisations already using them, as well as simplifying the set-up of these sorts of contracts.
Mr Layton, who was a multi-skilled decorator, had been employed by Martlet Homes since 31 January 2005. Martlet is a registered provider of social housing and it joined the Hyde Group with effect from 1 January 2008, becoming a subsidiary of Hyde Housing Association Limited. Mr Layton’s employment remained with Martlet.
Hyde Housing Association then started to act as Martlet’s agent for payroll purposes. However, the Claimant continued to be employed just by Martlet up to 1 August 2013. On 18 July 2013 the Hyde Group wrote to Mr Layton offering him a new contract of employment. This stated that his employer was to be all the members of the Hyde Group jointly and severally. Mr Layton did not sign the contract initially. He was then given notice of the termination of his employment with effect from 16 October 2013 and offered re-engagement on the new terms. He accepted the offer of re-engagement with effect from 17 October 2013. He continued working in the same team, carrying out similar services and activities, with the same line managers, wearing the same Hyde Martlet uniforms, badges and driving the same vans with their logos on.
Mr Layton claimed unfair dismissal (including automatic unfair dismissal because of a TUPE transfer). The Employment Tribunal therefore looked at whether there had been a transfer for the purposes of TUPE to decide whether this part of his claim could go ahead.
The Employment Tribunal decided that there was a TUPE transfer. Hyde Housing Association appealed. The Employment Appeal Tribunal (EAT) decided that the control of the relevant business unit remained in the hands of Martlet and the Claimant’s employment relationship also remained with Martlet after the addition of the other employers. Martlet also retained liability for Mr Layton’s employment, even if this was now shared with other members of the Hyde Group. The EAT therefore decided that there was no transfer but gave Mr Layton permission to appeal to the Court of Appeal.
This will be a welcome decision for employers using joint contracts. It is further confirmation that this type of contract is recognised by the courts. It also confirms, for the time being at least, that the simple addition of joint employers where there is no movement in control over the business unit or in the employment relationship, does not result in a TUPE transfer. Employers will not therefore need to comply with the requirements of TUPE in setting up joint contracts in these circumstances.
The position is less clear where, in reality, there has been a change in the control of the business unit or in the employment relationship. In that situation, a Tribunal might still reach the conclusion that there had been a transfer under TUPE.
This would mean that the employers would need to comply with information and consultation obligations to employee representatives or trade unions. Given that Tribunals have the power to impose a penalty of up to 13 weeks’ gross pay per affected employee where information and consultation obligations have not been complied with, employers would be wise to take a cautious approach in circumstances where control or the employment relationship is moving in reality.
Whilst there is also an obligation on the transferring employer to provide employee liability information to the receiving employer, it is unlikely to be an issue in joint employment relationships because, in most cases, the employers will either be members of the same group or will have made provision of employee information a condition of entering into the joint employment contract.
For More Information
About setting up joint employment contracts and how they work, please contact Doug Mullen.
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
Following our recent e-briefing on Possession Notices, Helen Tucker and Emilie Pownall from our housing litigation team discuss the impact of the changes on social landlords.
Not only has the possession stay been extended until 20 September, the notice periods to be given to tenants has been extended in certain circumstances with some important exceptions.
The Court has confirmed that a party cannot withhold its consent in order to re-write the original bargain.
Following the Grenfell Tower tragedy, building safety continues to be a key concern for social housing providers and their residents.
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