Transfer of Undertakings Protection of Employment in UK Law

In these circumstances it is the duty of the court to give to regulation 5 a construction which accords with the decisions of the European Court upon the corresponding provisions of the Directive to which the regulation was intended by Parliament to give effect. The precedent established by Pickstone v. Freemans Plc. indicates that this is to be done by implying the words necessary to achieve that result.

Thus the courts of the United Kingdom are under a duty to follow the practice of the European Court of Justice by giving a purposive construction to Directives and to Regulations issued for the purpose of complying with Directives. but no such reason could be advanced in the present case where there was no complaint against the workers, they were not redundant and there were no relevant reasons entailing changes in the workforce.

If the legislation can reasonably be construed so as to conform with those obligations — obligations which are to be ascertained not only from the wording of the relevant Directive but from the interpretation placed upon it by the European Court of Justice at Luxembourg — such a purposive construction will be applied even though, perhaps, it may involve some departure from the strict and literal application of the words which the legislature has elected to use.

Pickstone v. Freemans Plc. [1989] A.C. 66, has established that the greater flexibility available to the court in applying a purposive construction to legislation designed to give effect to the United Kingdom's Treaty obligations to the Community enables the court, where necessary, to supply by implication words appropriate to comply with those obligations.

Article 1.2 provides that the Directive is not to apply to 'workers employed by public administrative bodies or by establishments governed by public law (or, in Member States where this concept is unknown, by equivalent bodies)', an exception that Mr Cavanagh accepted did not extend to workers employed by a foreign sovereign state such as the USA.

From this jurisprudence I would draw these conclusions as to the extent of the reservation. The starting point is to be found in the general rule that the contracts of employment of workers assigned to the undertaking transferred are automatically transferred from the transferor to the transferee on the date of the transfer. Then there is the fact that it is not possible for this rule to be derogated from in a manner unfavourable to the employees.

(2) Without prejudice to paragraph (1) above [but subject to paragraph (4A) below], on the completion of a relevant transfer:-