Protection against unfair dismissal and TUPE

Dismissals in the context of TUPE are subject to the general law of unfair dismissal and redundancy (see Chapters 10 and 11). In addition, regulation 7 of TUPE provides some extra protection. Either way, two years’ service is required.

For transfers on or after 31 January 2014, the protection provided by Regulation 7 has been reduced in important ways. The changes impact on all cases where notice of dismissal was given on or after 31 January 2014 (or if no notice was given, the dismissal took place on or after 31 January 2014).

The changes make it easier and faster to dismiss employees in the context of a TUPE transfer. Under TUPE as amended by the 2014 Regulations:

• it is a breach of TUPE and automatically unfair for either the transferor or the transferee to dismiss an employee if the reason for the dismissal is the transfer. For example it would be a breach of TUPE for a seller to dismiss its employees because the buyer refuses to take them on;

• a dismissal is not automatically unfair under TUPE where there is an economic, technical or organisational (ETO) reason for the dismissal entailing changes to the workforce, for example, genuine redundancies (see Chapter 11);

• a dismissal for a valid ETO reason will be fair as long as the employer meets all the normal requirements of unfair dismissal law (see Chapter 10);

• a dismissal for a valid ETO reason will either be for:

◊ redundancy (section 98(2)(c) ERA 96); or

◊ “some other substantial reason” (section 98(4) ERA 96).

• if the dismissal is for redundancy, all the normal redundancy rules apply (see Chapter 11).

• TUPE protection applies to dismissals before and after the transfer, by either the transferor or the transferee.

TUPE also protects against constructive unfair dismissal, as well as deemed dismissal under regulation 4(9) of TUPE. This is where an employee resigns as a result of a substantial and detrimental change in working conditions (see page 384).

Employers are free to dismiss for a reason unrelated to the transfer, such as gross misconduct.

Employers are not allowed to rely on an economic technical or organisational reason unless that reason relates to their own plans to continue their business as a going concern. For example, an administrator is not allowed to rely on a buyer’s future plans to justify making redundancies before the transfer (Hynd v Armstrong (Court of Sessions) [2007] CSIH 16, Spaceright Europe Limited v Baillavoine [2011] EWCA Civ 1565).

Where a seller knows the buyer is planning redundancies, the correct course is for the seller’s employees to transfer to the seller’s business on the transfer date and for the new employer to make redundancies by selecting from the combined workforce.

There is no time limit to TUPE protection against dismissal, but the more time that passes, the harder it is to demonstrate a link between transfer and dismissal. In Taylor v Connex South Eastern EAT/1243/99, a dismissal two years after the transfer was automatically unfair.