TUPE protection against unfair dismissal 



The general laws of unfair dismissal and redundancy apply to all TUPE dismissals (see Chapters 10 and 11).


In addition, regulation 7, TUPE provides extra protection summarised below. Two years’ service is needed to bring 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. The changes affected all transfers on or after 31 January 2014. 



Here is a summary of unfair dismissal protection under regulation 7, TUPE, as amended by the CRTUPEAR regulations:


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


◊ It would be a breach of TUPE for a buyer to dismiss incoming employees who refuse to accept a cut to their wages or other terms and conditions to bring them into line with those 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 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, page 366);



• 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, whether or not this is a contractual change (see page 462).



Employers are always free to dismiss 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 is not allowed to rely on the buyer’s future 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 that 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 with its own workforce over those redundancies, as they are a “measure” known to be intended by the buyer after the transfer (see page 467).
The intended buyer may also be able to consult with the incoming workforce, under the new "pre-transfer collective consultation" rules summarised on page 468.


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.