OTG Limited v Barke and others UKEAT/0320/09

For an authoritative decision this was one of 5 cases that the Appeal Tribunal considered as to whether regulation 8(7) of TUPE could apply to sales by administrators. The EAT held in this case that a sale of an undertaking by the administrator does not amount to a relevant transfer for the purposes of regulation 8(7) of TUPE 2006 so the employees assigned to that undertaking will transfer to the buyer and be protected against transfer related dismissals, irrespective of whether the sale is pursuant to a pre-pack arrangement or not.

However certain liabilities in respect of the affected employees will be taken over by the Secretary of State rather than passed to the buyer and the buyer will have more scope than usual to agree variations to the transferring employees’ terms and conditions.

The case of Oakland v Wellswood (Yorkshire) Ltd was not followed.

Key point: Subject to any subsequent authoritative decision in the Court of Appeal regulation 8(7) of TUPE will never apply to an administrator’s sale of an insolvent company’s business or assets.