€22,000 Award in Contract Transfer Case: What Employers Must Know About TUPE Obligations
A recent Workplace Relations Commission (WRC) decision highlights the significant risks employers face when taking over service contracts and failing to properly manage employee transfer rights.
A cleaning supervisor has been awarded over €22,000 in compensation after a new contractor failed to provide her with work following a contract change at an industrial facility.
The ruling reinforces that employers cannot avoid responsibility for transferring employees simply because operational challenges arise.
The Background
The employee had worked as a cleaning supervisor on a long-term contract at a manufacturing site.
Following a dispute relating to cleaning duties ahead of a factory audit, she was issued with a site ban by the client organisation but remained employed and on full pay by her employer.
When a new contractor took over the cleaning services contract later that year, she was the only employee who did not transfer.
The new provider argued that because she was banned from the premises, she was not eligible to move with the contract.
What the WRC Found
The adjudicator rejected this position and found that:
- The employee remained in an employment relationship at the date of the transfer
- She was still assigned to the contract
- She was not consulted regarding the transfer
- She was effectively dismissed when work was not provided
The failure to facilitate the transfer and consult with the employee was found to breach TUPE regulations.
The employee was awarded:
- Seven months’ pay for dismissal
- Four weeks’ pay for failure to consult
Total compensation exceeded €22,000.
Key Employer Risks in Contract Transfers
This case illustrates several common misunderstandings around TUPE obligations.
1️⃣ Employees Do Not Lose Transfer Rights Due to Temporary Absence
Being:
- Suspended
- On leave
- Medically absent
- Or restricted from site
does not automatically remove an employee’s right to transfer.
The decisive factor is whether an employment relationship exists at the transfer date.
2️⃣ Incoming Contractors May Inherit Liability
New service providers can face legal exposure where they:
- Fail to recognise transferring employees
- Refuse to assign work
- Do not engage in consultation
- Rely solely on operational restrictions imposed by clients
TUPE rights cannot be avoided because a transfer creates inconvenience.
3️⃣ Consultation Is a Legal Requirement
Both outgoing and incoming employers must inform and consult employees affected by a transfer.
Failure to do so can lead to additional compensation awards.
4️⃣ Client Decisions Can Complicate Employer Obligations
Site bans or access restrictions imposed by clients do not remove an employer’s legal responsibilities.
Employers must still explore:
✔ Alternative deployment
✔ Consultation
✔ Continuity options
✔ Redundancy procedures if necessary
Ignoring these steps can result in findings of dismissal.
Practical Lessons for Employers
Employers taking over contracts should:
✅ Conduct early workforce due diligence
✅ Identify all employees assigned to the contract
✅ Assess any site restrictions or disputes
✅ Communicate clearly with transferring staff
✅ Seek legal advice where uncertainty exists
✅ Document consultation processes
Proactive planning can significantly reduce risk.
How Ormonde Solicitors Can Help
Ormonde Solicitors advises employers on:
- TUPE and contract transfers
- workforce restructuring
- redundancy and redeployment
- consultation obligations
- WRC defence and compliance audits
Proper preparation before taking over a contract can prevent costly disputes later.
📞 Contact us today for confidential guidance.
Disclaimer: This article is for general information purposes only and does not constitute legal advice.
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