Could a TUPE transfer occur before a school transfers into a MAT?

We consider the potential TUPE risks for a Multi Academy Trust which takes day to day control of a school before the transfer date.

It is becoming common practice for a Multi Academy Trust (MAT) to assume some control of a school prior to its conversion or transfer to the MAT. A principal and/or other senior leaders employed by the MAT may take on leadership of the school under a secondment agreement, consultancy arrangement or school to school support contract. MAT policies may be adopted by the school well in advance of the transfer date. While the school is still officially under the control of the local authority or its own trust, significant financial, strategic and operational decisions could be made by employees and trustees of the MAT.

A recent Employment Appeal Tribunal case highlights the possible TUPE risk where one organisation takes on responsibility for running another prior to any official transfer.

Case details

In Guvera v Butler and others, the EAT held that a TUPE transfer had taken place following a share sale (to which TUPE would not ordinarily apply) because the acquiring company had assumed day to day control of the business in a way that went beyond the mere exercise of ordinary supervision or information gathering by a parent company.

Blinkbox was a music streaming service which was acquired by Tesco in 2012. In January 2015, Guvera UK bought the shares in Blinkbox from Tesco. A share sale constitutes a change of ownership but does not usually effect a change of employer. In May 2015, an employee of Guvera took day to day control of Blinkbox, making key business decisions including deciding which creditors to pay and implementing redundancies.

An employment tribunal found that Blinkbox staff had transferred under TUPE to Guvera on the date where Guvera had effectively taken over conduct of Blinkbox's day to day activities. Guvera was therefore held liable for claims made by employees who were subsequently dismissed.

The EAT agreed, dismissing Guvera's argument that it had not taken responsibility for paying Blinkbox employees and so could not be their employer. The EAT made clear that the key test is whether there has been a change in the legal or natural person who is responsible for carrying on the business and who by virtue of that fact incurs the obligations of an employer.

Considerations for MATs

Chris Billington, Head of Education at Wrigleys notes that "Where a MAT takes control of a school prior to transfer, it is likely that a TUPE transfer is envisaged in the fairly near future. However, MATs must consider whether their pre-transfer involvement in another school is so significant as to be effectively "stepping into the shoes of the employer."

If MAT staff are making financial, budgeting, employment and other day to day business decisions for the school, the Guvera case raises a distinct possibility that a tribunal would find employment of staff at the school had transferred to the MAT from the date on which such control was assumed. In that case, the MAT would take on the obligations and liabilities of the employer before the formalities of the transfer process had taken place, raising the potential for the MAT being liable for employment-related claims it was not expecting.