An appeal to the Employment Appeal Tribunal (EAT) has successfully been defended by Meaby&Co and in doing so has clarified the law on the complex issue of the Transfer of Undertakings (TUPE). The relevant authority is Hare Wines Limited -v- (1) Mrs S Kaur and (2) H&W Wholesale Limited UKEAT/0752/16/JOJ.
Meaby&Co acts for Mrs Kaur who had been employed for some considerable time as a cashier at a cash and carry business. She was originally employed by H&W Wholesale Limited (H&W) but when the business faced financial difficulties the stock and the staff were transferred to Hare Wines. In reality it was the same Directors involved in both businesses. This automatically triggered the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006.
Consequently Hare Wines took on all staff with the exception of Mrs Kaur who without warning was dismissed two days before the transfer of the business on the basis that her role was ‘redundant’. H&W failed to pay the Claimant any redundancy pay or her full notice pay entitlement that she was entitled to on the basis that they could not afford to do so.
Mrs Kaur then issued a claim to the Employment Tribunal that she had been unfairly dismissed and she also sought her redundancy pay and arrears of notice pay.
At the time of issuing her claim, Mrs Kaur failed to set out that she was seeking compensation for a breach of the TUPE Regulations as at that time she was a litigant in person. At the Preliminary hearing by which time she was legally represented, the Employment Tribunal judge allowed Mrs Kaur to pursue her TUPE claim even though it was many months out of time which in itself was incredibly lucky.
The Employment Tribunal who heard the claims determined that Mrs Kaur had been automatically unfairly dismissed and that the sole or principal reason for her dismissal was the transfer of the business to Hare Wines which was contrary to Regulation 7 of TUPE 2006. It also held that Mrs Kaur had not objected to the transfer at a meeting that took place two days before the transfer, which was the line of argument pursued by Hare Wines in the hope that liability for the claims remained with H&W and did not transfer.
On appeal Hare Wines suggested that the employment tribunal had erred in its decision set out in its written judgment and pointed to their finding that the reason for the dismissal was the previous and anticipated on-going difficulties in the working relationship between Mrs Kaur and her Manager – Mr Chatha. Hare Wines argued that the employment tribunal should have found that the cause of the dismissal was about the difficult working relationship which it was anticipated would continue and which were reasons that were purely personal to Mrs Kaur.
The Employment Appeal Tribunal courtesy of Mr Justice Choudhury QC held that there could be no personal reasons defence which Hare Wines had sought to use, to avoid the application of TUPE.
The EAT also said that it was important to consider worker’s rights and the need to be careful of expanding the categories of employers’ defences which may undermine the protection that Parliament intended to be afforded to employees like Mrs Kaur in this situation.
The EAT in arriving at its decision also relied on the European Court of Justice authority of P Bork International -v- Foreningen AF Arbejdsledere i Danmark 1989, which makes it clear that an important factor in determining the reason for the dismissal is its proximity to the transfer.
It was also determined that although the relationship difficulties between Mrs Kaur and Mr Chatha were expected to continue after the transfer, it was open to the Employment Tribunal to identify the transfer as the strongest reason for the dismissal.
In the circumstances of this case, it was held that the although there were these difficulties they were not acted upon until almost the point of the transfer of the business and that therefore the transfer itself was the sole or principal reason for the dismissal.
Notwithstanding this decision, Hare Wines are currently seeking permission to appeal this narrow point on the issue of a personal relationship defence to the Court of Appeal and Mrs Kaur is now waiting to see if the Court of Appeal will grant permission to allow the appeal to proceed.
It is also important more than ever that business owners who are considering taking on a new business and who inherit transferring employees under TUPE, deal with any such work place difficulties by following fair and reasonable procedures. Any good due diligence exercise should flag up such difficulties in advance of any transfer. It is also not acceptable to simply target those employees who are perceived as difficult and to decide not to take them on. This creates legal risk and exposure as this case highlights.
As always it is best to seek timely legal advice when thinking about buying or selling a business due to the legal ramifications of TUPE. Please contact Steven Eckett at Meaby&Co for timely advice: firstname.lastname@example.org or call 0207 703 5034.
Meaby&Co is authorised and regulated by the Solicitor’s Regulation Authority (SRA Number 447880) and registered in England and Wales with registered number OC322672 at 2 Camberwell Church St, London, SE5 8QY.