Case update (1): TUPE – beware of automatic unfair dismissal

Summary:  Was the dismissal of an employee two days before a TUPE transfer automatically unfair, despite being due in part to the employee’s personal circumstances?

Yes, held the EAT in Hare Wines v (1) Kaur (2) H and W Wholesale available here.

 

Background: The dismissal of an employee of the transferor or the transferee is automatically unfair if the sole or principal reason for the dismissal is ‘the transfer’.

Whether a dismissal is by reason of the transfer is a question of fact for the Tribunal to decide in the light of all the circumstances. If the employer can show that the dismissal would have occurred wholly independently of the transfer, and is therefore unrelated to the transfer, the dismissal is not automatically unfair and fairness will be considered in accordance with normal principles.

 

Facts:  The employee, Ms Kaur, was a cashier working for H&W Wholesale, the employer. Ms Kaur was dismissed two days before the stock and employees of the employer were transferred under TUPE 2006 to Hare Wines.

Ms Kaur brought a Tribunal claim for automatic unfair dismissal because the sole or principal reason for her dismissal was the transfer. Ms Kaur argued that she had a strained working relationship with her colleague, Mr Chatha.  She thought that Mr Chatha did not want to work with her and that Hare Wines did not want Mr Chatha to have to manage her. Both employers denied this and defended the claim on the basis that Ms Kaur’s employment had been ended because she had objected to the transfer.

The Tribunal held that Ms Kaur’s dismissal was automatically unfair because the reason for the dismissal was the transfer. It accepted that Ms Kaur had not objected to the transfer and would have transferred but for her dismissal. As such, it concluded Ms Kaur had been dismissed because Hare Wines had anticipated that there would be ongoing difficulties in the working relationship between her and Mr Chatha and did not wish her contract of employment to transfer.

Hare Wines appealed to the EAT. Hare Wines’ main argument was that the reason for the dismissal was entirely personal to Ms Kaur and did not relate to the transfer.

The EAT dismissed the appeal, holding that:

• for a dismissal to be automatically unfair, the transfer must in fact be the sole or principal reason for the dismissal and that is a matter to be determined by the Tribunal having regard to all the circumstances.
• in this case it could not be suggested that the Tribunal had in mind the wrong test or a lesser test in determining the reason for the dismissal. The wording used by the Tribunal clearly showed that it was considering what was the reason, sole or principal, for the dismissal.
• There were a number of reasons for rejecting the argument that the existence of purely personal reasons precludes the transfer from being the reason for the dismissal:
• first, TUPE 2006 was designed to protect workers’ rights and one needed to be very careful in expanding or introducing what might appear to be new categories of defence, which may undermine the protection afforded to employees in these situations.
• second, an important factor to take into account in determining the reason for the dismissal is the proximity to the transfer (and in this case the dismissal was effective just two days before the transfer)
• Even if the ongoing difficulties in the working relationship between the employee and Mr Chatha can be described as ‘personal’ to the employee, a significant factor is that the difficulties were ongoing. That is to say, an issue affecting an employee’s conduct or competence, if suddenly acted upon at the point of transfer, is unlikely to be the sole or principal reason for the dismissal. An employer taking the opportunity to dismiss in such circumstances could reasonably be said to be motivated by the transfer, thereby making the transfer the principal reason for the dismissal.

 

Implications:  Employers should take care on transfers not to use it as an opportunity to dismiss problem employees, as it is likely to result in an automatically unfair dismissal. Whether a transfer is the sole or principal reason for a dismissal will be a question of fact in each case. However, employers should be aware that the fact that there is a personal reason for a dismissal will not prevent a Tribunal from finding that the sole or principal reason for the dismissal was the transfer.