Tribunal decides redundancy was not because of TUPE transfer

Employees may be transferred to another employer when a business changes hands, or when the business stops providing a service that’s then done by someone else. (For example, in-house catering is replaced by an external business providing catering services.) The new employer takes the transferring employees on the same terms and conditions as the old employer. This is called a TUPE transfer (Transfer of Undertakings Protection of Employment). TUPE rules protect the employment rights (and benefits) of employees who are being transferred.

Employees can’t be made redundant solely (or mainly) because of a TUPE transfer – this would be an unfair dismissal. Employment law doesn’t state how long an employer must wait after a TUPE transfer before making redundancies. But if the employer makes redundancies soon after the transfer, the risk is that any such redundancies could become unfair because they’d be deemed as resulting from the TUPE transfer.

An employment tribunal considered whether a manager was made redundant solely because of a TUPE transfer (4 months earlier), or for other reasons, namely an ‘economic, technical or organisational’ (ETO) reason.

Case: Davies v Droylsden Academy (DA)

The TUPE transfer was completed on 1 November 2014. DA distributed her management duties among 3 existing members of staff. She was left with no role after the transfer and stayed at home awaiting instructions. DA made no arrangements for her to take up work and didn’t pay her salary. She was made redundant in March 2015 (4 months after the transfer). She made a claim at an employment tribunal for unfair dismissal that followed a TUPE transfer.

The tribunal found that:

  • Her employment had transferred through a TUPE process
  • DA had restructured the lettings management role when it took the role in-house and no longer had a role for a dedicated lettings manager.

The TUPE transfer was completed on 1 November 2014. DA distributed her management duties among 3 existing members of staff. She was left with no role after the transfer and stayed at home awaiting instructions. DA made no arrangements for her to take up work and didn’t pay her salary. She was made redundant in March 2015 (4 months after the transfer). She made a claim at an employment tribunal for unfair dismissal that followed a TUPE transfer.

The tribunal found that:

  • Her employment had transferred through a TUPE process
  • DA had restructured the lettings management role when it took the role in-house and no longer had a role for a dedicated lettings manager.

The tribunal held that the redundancy was made for an ‘economic, technical or organisational’ reason (ETO) and wasn’t because of the TUPE transfer. Davies appealed to the Employment Appeals Tribunal (EAT).

At the EAT, she claimed that her main duties had been given to another staff member before the transfer and that a decision to make her redundant was made before the transfer. The EAT ruled that her management role had been restructured and she was no longer needed. The redundancy was for an ETO and not because of the TUPE transfer. The EAT rejected the claim.

What this means for you

You must be able to show that any redundancies made after a TUPE transfer were for an economic, technical or organisational reason (ETO), to limit the risk of a claim for unfair dismissal after the transfer. Be aware, however, that this could be a risky strategy – you’re recommended to take legal advice beforehand.

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