Crystal Palace scores a win on appeal: TUPE and company administration
Crystal Palace FC (2000) Ltd entered administration on 26 January 2010. The administrator attempted to sell the club as a going concern but negotiations were protracted and the sale did not complete until 19 August. On 28 May the administrator dismissed 29 employees in order to ‘mothball’ the club over the close season by reducing running costs and so avoid liquidation (which would effectively destroy value in the club). The claimants argued that their dismissals were unfair under Regulation 7 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), which makes any dismissal automatically unfair if the reason for the dismissal is one connected with the transfer that is not an economic, technical or organisational reason entailing changes in the workforce (ETO reason).
The Court of Appeal reversed the EAT decision and upheld the original ET decision that the dismissals were connected with the transfer of the club to a new owner but were for an ETO reason (since the wage bill must be reduced if the club was to survive) and so the employees had not been unfairly dismissed…
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