TUPE transfer: employees win compensation for failure to inform and consult
Four former employees of B&W Machinery Ltd were awarded over £22,000 after the company failed to inform or consult them about a TUPE transfer before entering liquidation.
1 min read · Last updated 18 May 2026
Case details
- #transfer-of-undertakings
- #failure-to-inform-consult
- #compensatory-award
- #joint-and-several-liability
- #creditors-voluntary-liquidation
Key facts
- The claimants were employees of B&W Machinery Ltd, which went into creditors' voluntary liquidation.
- The business transferred to Karpa Engineering Solutions Ltd as a relevant transfer under TUPE.
- The transferor failed to inform or consult the claimants about the transfer.
- The claimants withdrew their wrongful dismissal claims.
- The tribunal awarded compensation of 13 weeks' gross pay to each claimant.
Timeline
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Hearing and judgment
The tribunal heard the case and issued a judgment declaring failure to inform/consult under TUPE and awarding compensation.
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Judgment sent to parties
The written judgment was sent to the parties.
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Correction of judgment
Employment Judge Butler corrected the judgment under Rule 69, correcting the name of Mr Susco.
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Corrected judgment sent
The corrected judgment was sent to the parties.
The legal issue
Whether the transferor of a business had failed to inform or consult its employees about a relevant transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006, and what compensation should be awarded.
The outcome
The tribunal found in favour of the claimants, declaring that B&W Machinery Ltd had breached its duty to inform and consult them about the transfer to Karpa Engineering Solutions Ltd.
The compensation awarded was:
- Mrs Hill: £3,042 (13 weeks x £234 weekly gross pay)
- Mr Arrowsmith: £5,460 (13 weeks x £420 weekly gross pay)
- Mr Susco: £6,760 (13 weeks x £520 weekly gross pay)
- Mr Pendleton: £6,760 (13 weeks x £520 weekly gross pay)
Total: £22,022. The first and second respondents were jointly and severally liable.
Lessons & takeaways
- Employers must inform and consult affected employees before a TUPE transfer, even if the business is in financial difficulty.
- Failure to comply with TUPE consultation duties can result in a compensatory award of up to 13 weeks' gross pay per employee.
- Both the transferor and the transferee can be held jointly and severally liable for compensation if consultation obligations are not met.
- Employees affected by a TUPE transfer should seek advice early, as they may have claims even if the transferor becomes insolvent.
When a business changes hands, employees have rights
This case shows what can happen when a company fails to follow the rules on informing and consulting staff during a business transfer. The four former employees of B&W Machinery Ltd were not told about the transfer of their employment to Karpa Engineering Solutions Ltd before the company went into creditors' voluntary liquidation. The tribunal found that this was a clear breach of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
What the employer could have done differently
B&W Machinery Ltd could have avoided this claim by simply informing the employees about the proposed transfer and consulting with them in good time. Even if the company was in financial trouble, the duty to inform and consult remains. The fact that the company entered liquidation did not extinguish its obligations. The transferee, Karpa Engineering Solutions Ltd, was also held jointly liable, which means it too could have taken steps to ensure the process was followed.
Why this matters for similar claims
The case is a reminder that TUPE rights are robust, even when the transferor is insolvent. Employees who are not informed or consulted can claim compensation of up to 13 weeks' gross pay. The tribunal made a straightforward calculation based on each employee's weekly pay, without any reduction for contributory fault or Polkey factors. This is a relatively clear-cut claim for employees who find themselves in a similar situation. The involvement of a lay representative from the Citizens Advice Bureau shows that specialist legal representation is not always necessary, but early advice is crucial.
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