Under the Transfer of Undertakings (Protection of Employment) (TUPE) Regulations, an employee’s dismissal is usually automatically unfair if the reason for the dismissal is the transfer itself.
In the next case, an employee was dismissed before her employment would have transferred under TUPE. The new business owner’s motive in encouraging the Claimant’s employer to dismiss her was to avoid the new owner having to employ her because she had demonstrated difficulties in working with a colleague who was going to become a director in the new business after transfer.
The issue in this case was whether the reason for the Claimant’s dismissal was the transfer or was it in anticipation of difficulties in the working relationship between her and her colleague and unrelated to the transfer?
When the business employing the Claimant got into financial difficulties, HW Ltd (“HW”) came forward with an offer to purchase the business and to take on all its employees under TUPE, except for the Claimant. HW did not want to take her because she had a difficult working relationship with a colleague (C) who was going to be made a director of HW after the sale. The Claimant was dismissed by her employer immediately after which the business was sold to HW.
The Claimant brought a claim for unfair dismissal against HW. She alleged that the reason for her dismissal was the sale of the business to which TUPE applied and her dismissal was therefore automatically unfair.
Employment Tribunal (ET)
The ET found that the reason for the Claimant’s dismissal was that HW did not want to employ her to avoid a repeat of the difficulties in the working relationship between the Claimant and C. But for that, her employment would have transferred to HW so in the tribunal’s view the sole or principal reason for the Claimant’s dismissal was the transfer which made her dismissal automatically unfair.
HW appealed unsuccessfully to the Employment Appeal Tribunal and to the Court of Appeal.
HW’s argument at the appeal was that the tribunal’s finding that the reason for the dismissal was to avoid a repeat of the difficulties in the working relationship between the Claimant and C was not a reason that was consequent on the TUPE transfer so should not have resulted in a decision that the dismissal was automatically unfair.
The argument was not accepted on the facts of this case. The court highlighted two relevant factors:
First, that dismissal had taken place on the day of the transfer of the business to HW which, while not conclusive, was strong evidence in the Claimant’s favour that the transfer was the principal reason for the dismissal.
Second, the poor relationship between the Claimant and C had existed for some time without the Claimant’s employer attempting to terminate her employment. The fact that the employer only dismissed her at HW’s request gave rise to a strong inference that the principal reason for dismissal was the transfer, rather than the poor relationship.
Although the decision in this case does not create new law, it does illustrate the interplay between competing reasons for dismissal in a TUPE situation. In such a situation, where there are several possible reasons for a dismissal, it is necessary to identify the strongest reason: this is the ‘principal’ reason for the purposes of TUPE. If, as in this case, an issue about an employee’s conduct or capability (which would not normally be transfer related) is ignored until the point of transfer, the transfer might well be the sole or principal reason for the dismissal.
Hare Wines Ltd v Kaur
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