The Employment Appeal Tribunal (EAT) has upheld a decision that an employee who was dismissed two days before a TUPE transfer was unfairly dismissed – because the principal reason for her business’s actions was the transfer itself.
Mrs S Kaur was employed as a cashier by wine and beer business H&W Wholesale Ltd (H&W). When the company encountered financial difficulties in 2014, Hare Wines Ltd agreed to purchase its stock and take on any employees on the basis that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applied to the transaction.
Hare Wines then assumed responsibility for the employment contracts of all existing H&W employees with the exception of Kaur, whose employment was terminated.
According to tribunal documents, an H&W director had met with “six or seven” employees to talk about their future employment in the run-up to the business being sold. Kaur was the last to meet with the director, and her employment was terminated on 9 December 2014.
The transfer of business took place a couple of days later on 11 December.
Kaur brought proceedings before an employment tribunal (ET) claiming unfair dismissal, as well as redundancy pay and notice. She insisted the principal reason for her dismissal was the transfer of H&W. She added that neither business wanted her to transfer because she had a strained working relationship with a colleague.
Hare Wines argued that Kaur had objected to a transfer in the 9 December meeting, and the liability for Kaur’s claims remained with H&W. The tribunal rejected this argument.
The tribunal heard that according to the H&W director, Kaur stated she was not happy to work for Hare Wines and did not wish to transfer.
The director regarded this an objection to the transfer, and her employment was terminated for that reason.
But the judge rejected the director’s evidence as she considered there were “significant” discrepancies between his written and oral evidence. The ET ruled in favour of Kaur, concluding that she would have transferred but for her dismissal. As such, it concluded the reason for Kaur’s dismissal was the transfer.
Hare appealed the ruling to the EAT, arguing the reason for the dismissal was entirely personal to Kaur and not related to the transfer. The EAT dismissed the appeal and upheld the ET’s ruling.
It ruled the ET did not err in finding the reason for Kaur’s dismissal was the transfer “notwithstanding the fact there were ongoing relationship difficulties between her and a colleague”.
In his ruling, Mr Justice Choudhury added: “An issue affecting an employee’s conduct or competence, if suddenly acted upon at the point of transfer, is unlikely to be the sole or principal reason for the dismissal.”
Andrew Willis, head of legal at CIPD HR-inform, said the judgment should remind employers that a TUPE transfer “cannot be used as a way of getting rid of ‘problem’ employees”.
“Employers must be aware that the TUPE regulations give an automatic right for employees to transfer over provided they meet certain criteria,” Willis said. “It is not open for the new employer to pick and choose which employees they want to take.”
Susan Doris-Obando, counsel at Dentons law firm, added it is “fairly easy” for an employee to prove the reason for their dismissal was the transfer itself if their employment was terminated around the time of a TUPE transfer.
“This can be the case if no action has been taken previously around any issues personal to an employee – whether that relates to conduct or capability,” Doris-Obando said. “This highlights the need for HR to act promptly if there are any issues that need to be addressed with an employee.”
And Alan Lewis, partner at Irwin Mitchell, said employers with a business going through a TUPE transfer should seek advice before terminating any employees.
“A valid objection does negate a transfer, but don’t simply leave it at a verbal objection,” Lewis said. “It could be as simple as having a witness at a meeting, having the employee sign a letter of objection or, at the very least, an email to confirm the objection to transfer.”
Neither Kaur nor Hare Wines Ltd could be reached for comment.