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TUPE Case Update

08/04/2011

A recent case should act as a salutary warning to all businesses looking to acquire other businesses in administration.

The liability for a pre-acquisition dismissal will transfer to the transferee (i.e. a buyer) where the dismissal was connected to the transfer itself.

In this case even though the administrator had (at the time of the dismissal) not yet identified a particular buyer - the eventual buyer was still held liable for the dismissal.

The tribunal found that the administrator had dismissed the employee (actually the Chief Executive of the insolvent business) to enable a purchaser to acquire the business and assets without the continued employment of its Chief Executive.

KBL provides commercial advice in relation to all employment and TUPE related issues - arising from commercial acquisitions and sales.

Spaceright Europe Ltd v Baillavoine and another Employment Appeal Tribunal