Caution should be exercised when carrying out dismissals before or after a TUPE transfer

A recent Court of Appeal case again reminds employers that care should be taken when dismissing an employee in circumstances which could be seen to be connected to a TUPE transfer.

In Hare Wines Ltd v 1) Mrs S Kaur 2) H and W Wholesale Ltd (Dissolved): UKEAT/0131/17/JOJ the EAT upheld the tribunal’s finding that an employee’s dismissal prior to a TUPE transfer was connected to the transfer, notwithstanding that there were also ongoing relationship difficulties between her and a colleague.

The Claimant was employed by H&W Wholesale Ltd (H&W), a wine wholesale business, as a cashier. When H&W were to cease trading for financial reasons it was then agreed that Hare Wines Ltd would take on the business and employees of H&W in terms of a TUPE transfer.

The Claimant had a difficult working relationship with one of the employees, who was about to become a director of Hare Wines Ltd. Immediately prior to the transfer meetings were held with the various employees, with the Claimant’s meeting being held last. All other employees were told that their employment would transfer to Hare Wines Ltd. However, following the Claimant’s meeting, she was informed that she was being dismissed, effective immediately.

Regulation 4 of TUPE provides that:

●      “(1)Except where objection is made under paragraph (7), a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee.”

●      (3) Any reference in paragraph (1) to a person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to a relevant transfer, is a reference to a person so employed immediately before the transfer, or who would have been so employed if he had not been dismissed in the circumstances described in regulation 7(1), including, where the transfer is effected by a series of two or more transactions, a person so employed and assigned or who would have been so employed and assigned immediately before any of those transactions.”

Regulation 7 of TUPE provides that:

●      “(1) Where either before or after a relevant transfer, any employee of the transferor or transferee is dismissed, that employee shall be treated for the purposes of Part 10 of the 1996 Act (unfair dismissal) as unfairly dismissed if the sole or principal reason for his dismissal is the transfer.”

The Claimant brought claims for redundancy and notice pay and later amended her claim to include automatic unfair dismissal by reason of a TUPE transfer.

The tribunal heard the Claimant’s evidence that she was dismissed because of the impending transfer, having been told in a meeting that she was being dismissed as Hare Wines Ltd did not want her. The Respondent on the other hand gave evidence that the Claimant objected to the transfer and therefore she should not be treated as having been dismissed – referring to evidence that the Claimant said she was not happy to work for Hare Wines Ltd and did not want to transfer.

The EAT found that the reason for the dismissal was found to be the TUPE transfer; not the turbulent working relationship the Claimant had with her colleague and that she was dismissed because Hare Wines Ltd did not want to employ her. The EAT noted that the difficult working relationship had continued for some time without H&W terminating the relationship and that the Claimant was dismissed on the day of the transfer.

Employers are reminded that even where the reason for dismissal is related to an employee’s conduct, if it is acted on at the point of the transfer there is a risk that the dismissal will automatically be unfair if the transfer is found to be the sole or principal reason for dismissal. This risk increases the closer a dismissal is to the transfer date.

It is also worth pointing out that in this case it was the transfer that made the difference even though there may have been a legitimate issue for dismissal, as something post-transfer became problematic when it wasn’t pre-transfer. Employers should ensure that any issues such as this have been considered before a TUPE transfer is agreed.

Posted on 28 March, 2019 by Ortolan

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