Regulation 7(1) of TUPE usually makes a dismissal automatically unfair if it is for a reason connected with the business transfer. But what if the reason for the dismissal is actually good old personal dislike and the transfer is just the context in which it surfaced?

Enter stage left the Court of Appeal in Hare Wines Limited –v- Kaur last month. In brief, Mrs Kaur worked for H&W Wholesale Limited. She had a longstanding and difficult working relationship with a colleague, Mr Chatha riven with reciprocal animosity to which (it was found) both had contributed their share. In early December 2014, H&W shut its doors for financial reasons and there was a TUPE transfer of its business to Hare Wines on 11th. All H&W staff transferred to Hare except Mrs Kaur. She was told without warning on 9 December that she was being dismissed. She sued both H&W and Hare. H&W had ceased to trade, so in order to obtain any meaningful remedy she had to succeed against Hare. For that she needed to show that her dismissal fell under Regulation 7(1) above.

Hare Wines’ position on all of this wobbled around rather more than the Employment Judge found credible. Its ET3 claimed that Kaur had objected to the transfer and that it was her decision not to move to Hare. This sat very oddly with H&W’s written dismissal of her and its payment of part of her notice. Hare’s main witness statement said that at the dismissal meeting Kaur had discussed her reluctance to continue to work with Mr Chatha, but the adamant oral evidence from the same person was that this had not happened at all. Ultimately the EJ concluded that Hare Wines had not wanted Kaur to join them because of her relationship with Chatha. He became a director of Hare less than a month after the transfer, a position he could not have achieved at H&W because it was going under. The Tribunal found that H&W had known pre-transfer that this was going to happen.

So was the dismissal by reason of those personal problems between Kaur and Chatha and the difficulties it would certainly cause when he started to manage her wearing his new director hat, or was it the transfer?

Hare Wines’ case, already belching smoke and listing heavily because of the inconsistencies in its evidence, finally capsized altogether when it became clear that the poor relationship with Chatha had existed long before the transfer without any suggestion that H&W regarded this as grounds to dismiss. The catalyst was therefore obviously the transfer to Hare Wines where her bête noire was going to be one of her managers. The Employment Judge did not accept that it was Chatha’s promotion and prospective managerial oversight of Kaur which had turned their poor relationship from tolerable to intolerable, with the transfer just as background. Instead, she took the view that although the dismissal was ultimately motivated by Chatha’s personal dislike of Kaur, the transfer was the catalyst, not just context, for a dismissal which would not otherwise have happened. As a result, Kaur’s claim under Regulation 7(1) succeeded and Hare Wines became liable for her clearly unfair dismissal and the balance of her notice pay. The Court of Appeal was unable to poke any holes in this reasoning.

Lessons for employers

  • If you are dismissing someone around the time of a business transfer, keep an eye on whether that dismissal could be said to be related to it. The proximity of the dismissal to the transfer is not determinative in itself of a connection between the two. If Kaur’s dismissal had been at the end of a long prior disciplinary process which just happened to expire a few days before the transfer, that would not make the dismissal transfer-related. However, proximity will be persuasive and since there was no other explanation for the particular timing of the dismissal here, the Court of Appeal here thought that the Employment Judge was entitled to conclude that there was a link between them.
  • If the reality is that the dismissal is transfer-related, consider whether it is for an economic, technical organisational reason entailing changes in the workforce, being the exception to the “usually” in the first paragraph.
  • Any dismissal by the transferor pre-transfer which is at the actual or implicit request of the transferee as here, is likely to fall within Regulation 7(1).
  • Ideally do try to make your pleadings on the point consistent with the facts, or as a minimum if that is too much of a stretch, your own evidence.