EMPLOYERS LIABILITY INSURANCE - LIABILITY FOR TRANSFERRED EMPLOYEES

(Martin v Lancashire County Council, February 1999, unreported; Bernadone v Pall Mall Services Group (1999) The Times, 1 July)

The EC’s Acquired Rights Directive, Directive 77/187/EEC has, since its implementation in the UK by the Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981 No 1794, proved to be one of the most commonly litigated pieces of EC legislation, although insurers have until recently rarely been troubled by its terms. The Directive itself has recently been amended, and the Regulations have been amended on two main occasions with further amendments due in order to implement the EC’s own altered Directive. The general effect of the Directive and the TUPE Regulations is to provide that where an undertaking (business) is transferred from employer A to employer B, the employment contracts of A’s employees are also transferred to B and their rights are preserved. The question which arose in Martin v Lancashire County Council , February 1999, unreported, and Bernadone v Pall Mall Services Group (1999) The Times , 1 July, was whether the Directive and the TUPE Regulations had any impact on a personal injury claim by the employee against employer A and, if so, what effect there might be on employer A’s insurance cover. As will be seen, conflicting answers were given in these cases.