The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) apply to any size of business and protect the employment rights of employees when their employer changes as a result of the relevant transfer of a business or a part of one. However, some employers still appear to be unaware of the consequences of breaking the rules, as a recent case illustrates (Pentland Motor Company Limited v McKenzie).

Donald McKenzie had been employed by Frank Ogg, who held the local Land Rover dealership in Elgin, from 3 April 1967 until his employment was transferred under TUPE to Pentland Motor Company Limited on 3 August 2015.

Mr McKenzie’s new employer was aware that his contract of employment entitled him to receive full pay when absent from work due to sickness or injury. However, when he went off sick suffering from stress, the company informed him that he would only receive full pay during his first two weeks off work. He resigned in protest and successfully complained to an Employment Tribunal that he had been unfairly constructively dismissed.

In rejecting Pentland Motor Company’s challenge to that ruling, the Employment Appeal Tribunal found that the sick pay provision in Mr McKenzie’s contract was unambiguous and he was entitled to expect that it would be honoured. There was no evidence that the term had been expressly or impliedly varied, or that it had been included in his contract in error. The company’s refusal to remunerate him in full when on sick leave amounted to a repudiatory breach of his contract and it was ordered to pay him compensation of £87,732.