Crystal Palace FC went into administration in January 2010 to avoid the prospect of liquidation. In May 2010, the administrators dismissed 29 staff with the intention of ‘mothballing’ the club and having a ‘skeleton workforce’ over the closed season. Only those staff who were absolutely crucial to enable the club to continue its core operations were retained. The administrators ultimately sold the club as a going concern in August 2010.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) (Regulation 7 (1)) provides: ‘Where either before or after a transfer, any employee of the transferor or transferee is dismissed, that employee shall be treated as unfairly dismissed if the sole or principal reason for his dismissal is: the transfer itself; or a reason connected with the transfer that is not an economic, technical or organisational reason [ETO reason] entailing changes in the workforce.’
If a dismissal is connected to the transfer but is not for an ETO reason, then it will be automatically unfair and liability for it will pass to the transferee. Conversely, if a dismissal is for an ETO reason, then the dismissal will not be automatically unfair (although it will still be subject to the normal rules on fairness of dismissals) and liability for it will remain with the transferor…
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