Dismissals of football club employees shortly before sale of the club by the administrator not automatically unfair

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Overturning the decision of the Employment Appeal Tribunal (EAT), the Court of Appeal has found that dismissals of football club employees shortly before a sale of the club by the administrator were not automatically unfair under Regulation 7 of TUPE 2006 because they were for an ‘economic, technical or organisational’ reason (Crystal Palace FC Ltd and another v Kavanagh and others).

Crystal Palace went into administration in January 2010. A potential buyer consortium was incorporated in March but negotiations became protracted, complicated partly by the fact that the consortium refused to buy the club unless they could also buy the stadium, Selhurst Park. The stadium was owned by a separate company (also in administration) and so the administrator for the club had little power to influence a sale of the stadium. Towards the end of May, the stadium situation had still not been resolved and the club was experiencing severe cashflow difficulties.

The administrator decided to ‘mothball’ the club during the close season; he proposed to make the majority of the administrative staff redundant and threatened to proceed with the immediate sale of the club’s more valuable players. Twenty-nine staff, including the claimants, were duly dismissed as redundant on 28 May…

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