News Feed
In what may turn out to be a landmark case the Employment Appeals Tribunal has handed down a judgement which indicates that even if a transferor does not have a specific transferee in contemplation, a dismissal in consideration of any potential transfer will be automatically unfair under Reg. 7(1) of the Transfer of Under Takings Protection of Employment Regulations 2006.
The case was Spaceright Europe Ltd. V Bajllayoine. The Claimant was employed as a Managing Director of a business which was up for sale. Whilst the business was up for sale no potential buyer had been established. In view of any future the sale it was decided that the Claimant’s salary was too high and would discourage any potential buyers. Consequently the Claimant was informed that he was to be made redundant and was dismissed accordingly.
The EAT held that the dismissal was connected tot the transfer under Reg. 7(1) and therefore the dismissal was unfair. The EAT held it irrelevant that no potential buyer had been lined up; the Claimant was dismissed because of the future transfer.
When making its decision the EAT had to ask whether or not there was an economic, technical or organisational (ETO) reason for the decision which would render the dismissal not automatically unfair. The EAT held that because the Claimant’s position was necessary for the performance of the business there was not an ETO for the dismissal.
The consequences of this case are that even when a Company is just contemplating selling, any dismissal made because of the contemplated sale shall be held to be automatically unfair.
