Cautionary TUPE Tale


Yet again employers involved in a TUPE transfer have managed to get themselves into trouble in a TUPE transfer. The law in this area is complex if only because of the number of case precedent rulings says Chris from Expert HR Solutions, we would always advise that both the Transferee and the Transferor companies seek expert advice well before any consultations with staff or their representatives take place he continues. In this case, an employee with work relationship difficulties was dismissed two days before a TUPE transfer was unfairly dismissed.

The employee was employed as a cashier by a wine and beer business (the Transferor). When the company encountered financial difficulties another company (the Transferee) agreed to purchase its stock and take on any employees on the basis that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applied to the transaction.

The Transferee assumed responsibility for the employment contracts of all existing Transferor employees with the exception of the employee, whose employment was terminated.

According to tribunal documents, a Transferor director had met with “six or seven” employees to talk about their future employment in the run-up to the business being sold. The employee was the last to meet with the director, and her employment was terminated on 9th December 2014. The transfer of business took place a couple of days later on 11th December.

The employee brought proceedings before an employment tribunal claiming unfair dismissal, as well as redundancy pay and notice. She insisted the principal reason for her dismissal was the transfer. She added that neither business wanted her to transfer because she had a strained working relationship with a colleague.

The Transferee argued that the employee had objected to a transfer in the 9 December meeting, and the liability for her claims remained with the Transferor. The tribunal rejected this argument.

The tribunal heard that according to the Transferor’s director, the employee stated she was not happy to work for the Transferee and did not wish to transfer. The director regarded this an objection to the transfer, and her employment was terminated for that reason.

But the judge rejected the director’s evidence as she considered there were “significant” discrepancies between his written and oral evidence. The ET ruled in favour of the employee, concluding that she would have transferred but for her dismissal. As such, it concluded the reason for Kaur’s dismissal was the transfer.

The Transferee appealed the ruling, arguing the reason for the dismissal was entirely personal to the employee and not related to the transfer. The EAT dismissed the appeal and upheld the ET’s ruling.

It ruled the ET did not err in finding the reason for Kaur’s dismissal was the transfer notwithstanding the fact there were ongoing relationship difficulties between her and a colleague. In his ruling, Mr Justice Choudhury added: “An issue affecting an employee’s conduct or competence, if suddenly acted upon at the point of transfer, is unlikely to be the sole or principal reason for the dismissal.”

Chris says the judgment should remind employers that a TUPE transfer cannot be used as a way of getting rid of ‘problem’ employees. Nor, he continues can employers pick and choose which employees transfer. It also serves as a reminder that issues relating to conduct or capability must be dealt with as they occur. Finally he says that at expert HR Solutions we always ask employees who are objecting to the transfer to write a letter to the employer stating that they object to the transfer and realise that as a result their employment will terminate on the date of the transfer and that they will not be entitled to any financial compensation. We also advise all such meetings are conducted by two people so that there is a witness to what was said.

If you would like advice about this or any other employment issue give us a call on 01202 611033, your first 30 minutes are FREE.

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