TUPE protection against unfair dismissal 


Dismissals in the context of TUPE are covered by the general law of unfair dismissal and redundancy (see Chapters 10 and 11). In addition, regulation 7, TUPE provides some extra protection. Two years’ service is required, even if the dismissal is automatically unfair in breach of TUPE. 


For transfers on or after 31 January 2014, the law changed in important ways under the 2014 Regulations. The effect of these changes is to reduce the protection provided by Regulation 7, TUPE, and to make it easier and faster to dismiss employees caught up in a TUPE transfer. 


Under TUPE, as amended by the 2014 Regulations:


• it is a breach of TUPE and automatically unfair for a transferor or 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 employ them; 


• 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) (see Chapter 10);


• if the dismissal is for redundancy, all the normal redundancy rules 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. This is where an employee resigns due to a substantial and detrimental change in working conditions (see page 424).


Employers are always free to dismiss for a reason unrelated to the transfer such as gross misconduct, subject to the normal unfair dismissal regime explained in Chapter 10. 


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


Where a seller knows a buyer is planning 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 will be under an obligation to consult collectively over those redundancies, as they are a "measure" intended by the buyer after the transfer (see page 429).


It is automatically unfair for a seller to make redundancies before the transfer at the buyer’s request. Liability for these unfair redundancies would 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 becomes 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.