Employment Matters March 2019
DAC Beachcroft's Employment Matters focuses on some of the most interesting cases and events occurring within the Employment Law sector.
Published 14 March 2019
The dismissal of an employee on the day of a TUPE transfer because her new employer anticipated ongoing problems with a fellow employee was automatically unfair under TUPE .
Mrs Kaur was employed by a wholesale wine business, H & W Wholesale Ltd, which ceased trading and transferred its business to Hare Wines Ltd. All the employees of the business except Mrs Kaur transferred under TUPE. Mrs Kaur had a difficult working relationship with a colleague, Mr Chatha, who was to be a manager after the transfer. On the day of the transfer, Mrs Kaur was called into a meeting with a director of H & W, Mr Windsor. In the employment tribunal, they later disagreed about what was said at that meeting. Mr Windsor said that he had told Mrs Kaur that the business was being transferred and that Mrs Kaur had said that she did not want to transfer because of her working relationships with Mr Chatha and another male colleague, and she had objected to the transfer. Mrs Kaur’s version of events, however, was that Mr Windsor told her that she was going to be dismissed because Hare Wines did not want her. She said that there was a long conversation about Mr Chatha, and that she was told that Mr Chatha did not want her and Hare Wines Ltd did not want Mr Chatha to manage her. Following the meeting, Mrs Kaur was sent a letter terminating her employment.
Mrs Kaur brought claims in the employment tribunal against both H & W and Hare Wines. The employment tribunal judge preferred Mrs Kaur’s version of events and held that Mrs Kaur had not objected to the transfer. The employment tribunal believed that Hare Wines Ltd did not want her to transfer to it because it anticipated that there would be ongoing difficulties in the relationship between Mrs Kaur and Mr Chatha. It found she had been dismissed , and the TUPE transfer was the reason for the dismissal. The dismissal was automatically unfair, and Hare Wines Ltd had breached her contract of employment by not paying her notice period.
Hare Wines unsuccessfully appealed to the EAT and then the Court of Appeal. Hare Wines argued that Mrs Kaur’s dismissal was not automatically unfair: it said that the reasons given by the employment tribunal for the dismissal were “purely personal reasons” and not consequent on the TUPE transfer. The liability for her dismissal had not therefore, according to Hare Wines, transferred. The Court of Appeal disagreed. It said that, once the employment tribunal had found that Mrs Kaur had not objected to the transfer, the central question was i) whether she had been dismissed because of her relationship with Mr Chatha and the proximity of the transfer was coincidental or ii) whether she had been dismissed because Hare Wines did not want her, the reason being that she did not get on with Mr Chatha. It was for the employment tribunal to determine which of those was the sole or principal reason for the dismissal. On the evidence, the employment tribunal had been entitled to prefer the second of these reasons. The reason for the dismissal was the transfer.
One of the difficulties that Hare Wines had in this case was that the dismissal had been on the day of the transfer. This was not conclusive, but it was strong evidence in Mrs Kaur’s favour. Employers dismissing employees in the context of a TUPE transfer should tread carefully: where there is no economic, technical or organisational reason for a dismissal, they should consider carefully whether the transfer could be said to be the reason for the dismissal. The closer the dismissal is to the transfer date, the greater the risk will be of an automatically unfair dismissal.