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EMPLOYEES who lose their jobs as a result of a business transfer can take action for
unfair dismissal regardless of whether or not they have been
employed for a minimum of two years, following a decision in the Employment Appeal Tribunal.
Lawyers say the judgement, handed down last month, will have"radical implications" for those people involved with the
Transfer of Undertakings (Protection of Employment) (Tupe) Regulations 1981.
But they claim it will have little, if any, effect on the number of outsourcing contracts or business sales taking place.
The decision, handed down in the case of Milligan and Bailey v Securicor Cleaning, says employees no longer need two year' qualifying service to take a claim if they are dismissed for any reason connected with the Tupe transfer.
Statutory protection from unfair dismissal is normally only offered to employees with two years' of continuous
The decision deemed that a Tupe dismissal was unfair, emphasising the protectionary purpose of the Acquired Rights Directive.
Elaine Aarons, head of the employment group at Eversheds Jaques & Lewis, says that the decision is a "clever and logical interpretation" of the ARD.
"I think it is correct because the ARD does require domestic legislation to explicitly exclude employees who fall outside its protection," she says.
"Because the transfer regulations did not explicitly exclude employees with two years service, technically the decision seems correct."
However, Aarons also comments: "It is open to the Government to introduce corrective legislation that will explicitly exclude classes of employees - including those with less than two years service.
"Even without that the door is still open to argue that the regulations did in fact apply to those people."
Aarons says she would not be surprised if further litigation were to follow.