Pre-transfer dismissal was by reason of transfer and automatically unfair
06 September 2018
The Employment Appeal Tribunal (“EAT”) has upheld a decision that the dismissal of an employee immediately before a TUPE transfer was automatically unfair because the principal reason was the transfer. The EAT rejected the transferee employer’s contention that the reason for the dismissal was personal to the employee’s circumstances and so unrelated to the transfer.
Facts of the case
Ms Kaur was employed by a wine and beer wholesale business, H&W Wholesale Ltd (“H&W”). When the business got into financial difficulties, Hare Wines Ltd (“Hare”) agreed to purchase it.
The employment contracts of all H&W’s existing employees, apart from Ms Kaur, were transferred to Hare. Ms Kaur’s employment was terminated two days before the transfer. She was told by H&W that the reason was the business was ceasing to trade, but Hare contended it was because she had objected to transferring.
Ms Kaur initially brought proceedings initially claiming redundancy pay and notice, but later amended her claim to include unfair dismissal claim. She claimed the principal reason for her dismissal was the transfer of the business, so it was automatically unfair under regulation 7 of TUPE. Hare’s defence was that she had objected to the transfer, with the result that any liability for her dismissal remained with H&W.
The main issue for the Employment Tribunal (“ET”) to resolve was whether Ms Kaur had objected to transfer. Her case was that her manager did not want her to transfer because they had a strained strained relationship, and hence Hare did not want her to transfer. The ET preferred Ms Kaur’s evidence and concluded the factual dispute in her favour, concluding that she would have transferred but for her dismissal. It followed that the reason for the dismissal was the transfer.
The EAT’s ruling
Hare appealed to the EAT, its main argument being that the reason for the dismissal was entirely personal to Ms Kaur and did not relate to the transfer. The EAT dismissed the appeal and upheld the ET’s finding that the reason for the dismissal was the transfer, for the following reasons:
- TUPE is designed to protect employees and new categories of defence should be introduced with caution so as not to undermine that protection. The existence of personal reasons does not mean that the reason for the dismissal is not the transfer.
- The proximity of the dismissal to the transfer is an important consideration when determining the reason for the dismissal (P Bork International v Foreningen Af Arbejdsledere I Danmark  IRLR 41).
- Where an employer has taken action to resolve ongoing difficulties only at the point of the transfer by dismissal, it is open to the ET to conclude that the reason for dismissal was the transfer.
The EAT summarised the position as follows: “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. An employer taking the opportunity to dismiss in such circumstances could reasonably be said to be motivated by the transfer, thereby making the transfer the principal reason for the dismissal. It will all, of course, depend upon the facts of individual cases.”
Dismissals will be treated as automatically unfair if the sole or principal reason for the dismissal is the transfer itself, unless it can be shown that the dismissal is for an economic, technical or organisational reason (“ETO”) entailing changes in the workforce. This case underlines that even where an employer believes it has a non-transfer-related rationale for the dismissal – whether that qualifies as an ETO reason or otherwise – caution should be exercised where the dismissal will be occurring close to the transfer date.
Hare Ltd v Kaur and another – judgment available here