Nature of a commercial undertaking

Case 2: The facts

Ronald Davies and another 121 workers were refuse collectors whose work was transferred to the private-sector contractor Onyx.

Davies and some of his colleagues were offered jobs with the company but on inferior terms to those they had enjoyed with the council. Onyx said that there had not been a TUPE transfer because the refuse collection prior to privatisation had not been a commercial venture.

Davies and his fellow workers took a claim against the UK government. They argued that, if Onyx was right, it meant that the UK law was deficient and that the government was liable to pay them compensation for failing to properly transpose the European directive into UK law.

The ruling

The Court of Appeal ruled against Davies. It held that the transfer had been covered by TUPE, and that the only claim he and the others could advance would have been against the new contractor.

The court says that where an undertaking after the transfer is a commercial venture, and where it has all the characteristics that it had before the transfer (other than that it had not operated for profit), the undertaking before the transfer would be a commercial venture.

Alderson v Secretary of State for Trade and Industry Case No: 2003/0661