In this week’s MMD, we have a couple of case updates from the Employment Appeals Tribunal this week; one on the maintenance of terms and conditions of employment following a business transfer, and the other an unusual decision on mutual termination of employment.

There have been lots of relevant employment law/HR updates this week.

Does the benefit of a non-contractual share incentive plan transfer under TUPE?

This case considered whether the Claimant’s employer share incentive plan transferred under TUPE, which would require the Company to provide a plan of ‘substantial equivalence’. The Company’s argument was that the benefit plan did not arise ‘under’ or ‘in connection with’ the Claimant’s contract as per the TUPE regulations, which would mean that the benefit did not transfer under TUPE and the Company were not required to provide such a benefit. However, the Court of Session rejected this argument, stating that the restrictive interpretation of TUPE proposed by the Company would allow all employers to undermine TUPE protections by creating separate contracts for benefits an employee received in addition to their salary. It was therefore held that the non-contractual share incentive plan transferred under TUPE.

Ponticelli UK Ltd v Mr A Gallagher: [2022] EAT 140 – GOV.UK (www.gov.uk)

Employee’s ill-health dismissal was by mutual consent

The Claimant in this case was autistic and experienced anxiety and depression whilst working for Direct Line. The Claimant was enrolled on a private health insurance scheme and had an upgraded version of the scheme that offered support until retirement age in the event of incapacity. The Claimant was absent from work between 2014 and October 2027 due to his anxiety and depression and was paid 80% of his salary under the private health insurance scheme during this time. An assessment in 2017 proposed a phased return to work with reasonable adjustments in place. The Claimant carried out a five-month phased return, however after a month of taking calls, his GP declared him unfit to work due to his anxiety and paranoia. Direct Line contacted the insurance provider and stated that it was difficult to see that the Claimant would “recover sufficiently to perform his role in the near or medium future.” Following this, the Claimant was informed that he would be able to leave his job and the insurance provider would pay his salary until retirement age, which the Claimant agreed to, and his employment was subsequently terminated on 19 September 2018. The Claimant then brought tribunal proceedings against Direct Line, claiming he had been ‘tricked’ into leaving the Company and had not understood what he had been told in the meetings. The Tribunal dismissed his claim, finding that he had made an informed decision and that no pressure had been placed on him to leave the firm. It agreed with Direct Line that he had left his job by mutual consent, even though the word “dismissal” had been used.

Matthew Riley v Direct Line Insurance Group PLC: [2023] EAT 118 – GOV.UK (www.gov.uk)

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