Must you foresee a transfer?

17 Jan 2012

Spaceright Europe Limited v BaillavoineUnder the Transfer of Undertakings (Protection of Employment) Regulations 2006, commonly referred to as TUPE, the dismissal of an employee is automatically unfair if it is for a "reason connected with the transfer".

As could only be expected, the meaning of the word "the" has kept lawyers occupied for many years: does it mean that the dismissal must be connected to the transfer contemplated at the time of dismissal, or does it mean that the dismissal need only be connected to any transfer that eventually happens, notwithstanding that the exact transfer was not contemplated at the time of the dismissal.

On a straight forward reading, it would seem that "the transfer" must mean that the dismissal must be for a reason connected with a transfer contemplated at the time of the dismissal.  This reading was given some support by the case of Ibex Trading v Walton in 19994; however, inevitably, the opposite reading was given support by the case of Harrison Bowden v Bowden also in 1994.  These cases were decided under the old regulations, but the TUPE 2006 Regulations retained the same wording and offered no more clarity.

Thankfully, the Court of Appeal have now come to the rescue to clear up 17 years of ambiguity.  The Court of Appeal, in the case of Spaceright Europe Limited v Baillavoine, has decided that the correct interpretation is that dismissal need only be connected to any transfer that eventually happens, notwithstanding that the exact transfer was not contemplated at the time of the dismissal.  As the Court of Appeal said "It is a common experience of life that an event (A) may sensibly be considered to be connected with a later event (B), even though it was not known, contemplated or foreseen at the time of event (A) that event (B) would happen."

The current position is, therefore, that a person can be considered to be automatically dismissed for a reason connected with the transfer even if the transfer was not known, contemplated or foreseen at the time of the dismissal.

The saving grace of this is that an employee must bring a claim within three months of their dismissal. 

The reality is that, in most cases, an employer will have an idea that a transfer might happen more than three months before it actually occurs.