The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) protects employees' terms and conditions of employment when a business is transferred from one owner to another. A recent landmark court case clarified employee’s dismissal rights under TUPE. Richard Brown from rhw solicitors considers what impact this case may have on employees’ rights in the future.
Under TUPE regulations, employees of the previous owner automatically become employees of the new employer when the business changes hands, taking with them the same terms and conditions as before. Their employment contracts remain the same and their continuity of service and all other rights are preserved. Legally, both the old employer and the new one are required to inform and, in certain circumstances, consult employees affected directly or indirectly by the transfer.
Since the TUPE regulations were revised in 2006 there has been some confusion over existing employee’s rights on dismissal procedures when a company transfers to a new owner.
The situation was recently clarified by the case of Spaceright Europe v Baillavoine. Mr Baillavoine, the CEO of the Ultralon Holdings won an unfair dismissal case on the basis that he had been dismissed by his employer so that a purchaser (Spaceright Europe) could buy the business and assets without the continued employment of its Chief Executive.
Employers need to consider that if a transfer is likely to happen and an unrelated dismissal is required, the employer should ensure it keeps documentary evidence of the true reason for the dismissal to avoid any allegation that it was connected to the transfer. An employee must bring a claim within three months of their dismissal.
If you would like advice on any employment law issue or a review of the terms of your standard contracts of employment please contact Richard Brown of rhw Solicitors LLP’ Care Providers Team on:
Tel: 01483 540531 Fax: 01483 301242
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