The Court of Appeal recently heard the case of Hare Wines Ltd v Kaur to determine if the Employment Tribunal had correctly found that a dismissal was for the sole or principal reason of a TUPE transfer.
Under the TUPE Regulations, the law states that an employee’s contract of employment will not be terminated by the transferring business except where the employee objects to the transfer. The contract of employment continues to have effect as if it was originally formed between the employee and new employer. If an employee objects to a transfer, then upon transfer the contract of employment will be terminated and it will not be treated as a dismissal. If an employee of the transferring business or the new business is dismissed either before or after a transfer, the employee will be treated as being automatically unfairly dismissed if the sole or principal reason for dismissal is the transfer.
In this case, over the course of the Claimant’s employment with the Company, it had been run by several different employers. In 2014, the business again transferred to another entity by TUPE transfer. Mrs Kaur’s employment was terminated on the day of the transfer and she raised a claim for automatic unfair dismissal. The new company, Hare Wines, submitted that Mrs Kaur had objected to the transfer due to her difficult working relationship with a colleague, who was due to become a director of Hare Wines.
The Employment Tribunal decided at first instance that the real reason for the dismissal was because her employer anticipated ongoing difficulties with her colleague and that she did not in fact object to the transfer.
Two unsuccessful appeals from Hare Wines followed to the Employment Appeal Tribunal and the Court of Appeal, who held that Mrs Kaur did not object to the transfer and had to decide what the sole or principal reason for dismissal was.
The court decided that Hare Wines did not want the Claimant because of her poor relationship with her colleague. The court had highlighted two relevant factors which decided the case; firstly, the dismissal happened on the day of the transfer, and secondly, the poor relationship between Mrs Kaur and her colleague had endured for some time prior to the transfer without the transferor seeking to terminate her employment.
This is a helpful reminder of the complexities involved in TUPE transfers. The TUPE Regulations serve the purpose of protecting an employee’s employment rights and caution should be exercised when considering a dismissal close to a transfer date. If you are in this situation and are unsure of the legal implications of a dismissal, then speak with your dedicated employment solicitor as soon as possible to assess any risks.