Transferor not required to provide NMW information after TUPE transfer


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The Employment Appeal Tribunal (EAT) has considered in Mears Homecare Ltd v Bradburn whether a transferor remained responsible under the national minimum wage legislation for providing pay information to former employees after a TUPE transfer.

Under section 9, National Minimum Wage Act 1998 (NMWA 1998) employers have an ongoing duty to keep sufficient records to establish that they have paid their workers the national minimum wage (NMW).  Where workers believe they have been underpaid they can require their employer to produce pay records, and if the employer fails to do so the tribunal can make a declaration and award up to 80 times the relevant NMW rate.  The "employer" is defined as "the person by whom the employee or worker is (or, where the employment has ceased, was) employed".

There had been a TUPE transfer and the claimants served "production notices" on the transferor seeking pay information.  When the transferor failed to respond within the necessary 14 days the claimants issued tribunal proceedings against it. The tribunal held that the transferor was the "employer" and ordered it to pay each of the claimants £600. On appeal, the EAT held that the transferee was the employer for NMW purposes, and all of the transferor's rights, duties and obligations under the contracts of employment transferred to the transferee.  This included the obligation to keep and produce NMW records.

Take note: Following the decision in Mears the obligation to keep and produce NMW records under the NMWA 1998 will pass to the transferee (although the transferor will remain liable for any wilful failure to comply with the NMWA 1998).  In order to comply with this requirement the transferee will need to ensure it receives full records from the transferor.


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