LRD guides and handbook May 2018

Law at Work 2018

Chapter 12

TUPE protection against unfair dismissal 




[ch 12: pages 446-448]

The general laws of unfair dismissal and redundancy apply to all TUPE dismissals (see Chapters 10 and 11).
In addition, regulation 7, TUPE provides some extra protection summarised below. Two years’ service is needed for a claim under regulation 7. 




The protection against unfair dismissal provided by TUPE was significantly scaled back by the CRTUPEAR regulations, making it easier and faster to dismiss employees caught up in a TUPE transfer. These changes have affected all transfers in England, Wales and Scotland (but not Northern Ireland) on or after 31 January 2014. 




Here is a summary of unfair dismissal protection in England, Wales and Scotland under regulation 7, TUPE, as amended in January 2014:



• it is a breach of TUPE and automatically unfair for a transferor or transferee to dismiss an employee where the sole or principal reason for 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 employ them; or



◊ for a buyer to dismiss incoming employees because they refuse to accept a cut to wages and other contract terms to reduce them to the level of the buyer’s existing workforce (“harmonisation”). 




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




• a dismissal for a valid ETO reason is 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) (see Chapter 10, page 337);


• if the dismissal is for redundancy, all normal redundancy laws apply, including the right to a redundancy payment for those with enough qualifying service and the employer’s duties in relation to alternative employment (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), TUPE, where an employee resigns due to a substantial and detrimental change to their working conditions (see page 428).




TUPE does not prevent dismissals for a reason unrelated to the transfer such as gross misconduct, subject to the normal unfair dismissal regime (see Chapter 10). 




Employers cannot rely on an ETO reason to justify dismissals unless that reason relates to their own plans to continue the business as a going concern (Hynd v Armstrong [2007] CSIH 16). For example, an insolvency administrator cannot rely on the intended buyer’s future plans to justify making redundancies before a transfer (Hynd v Armstrong (Court of Sessions) [2007] CSIH 16). 




Where a seller knows a buyer is planning to make redundancies, the correct course is for the seller’s employees to transfer automatically to the buyer’s business on the transfer date and for any redundancy dismissals to be carried out by the buyer, selecting from the combined workforce. The seller must consult collectively with its own workforce over those planned redundancies, as they are a “measure” the seller knows is intended by the buyer following the transfer (see page 432).
There may also be "pre-transfer collective consultation" over planned redundancies, under the rules set out on page 434. 



It is automatically unfair for a seller to carry out redundancies before the transfer at the buyer’s request. Liability for these unfair redundancies will transfer automatically to the buyer on the transfer date. 




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




A claim for unfair dismissal is usually brought against the transferee (the new employer), even if the employment does not transfer. This is because liability for the unfair dismissal usually transfers to the new employer. However, this is a complex area of law and legal advice must be taken. If there is any doubt over the identity of the employer or as to whether liability transferred, it is better to claim against both employers, and for the issue to be resolved by the tribunal. 




The deadline for a tribunal claim for unfair dismissal is three months (less one day) from the dismissal date (see page 349 for information on calculating the three-month period). The first step is to submit an Acas Early Conciliation (EC) Notification Form. This must be done before the expiry of the three-month deadline for bringing the claim. See Chapter 14 for information on Acas EC and bringing a tribunal claim.