In this case, the Court of Session (the Scottish equivalent of the Court of Appeal) held that a transferor cannot rely on a transferee’s reason for dismissal in defending an automatic unfair dismissal claim under TUPE. Facts: Mr Hynd worked as a corporate lawyer for Morison Bishop in its Glasgow office. It was decided to split the firm. The Glasgow office was to become Bishops, whilst the Edinburgh office was to become Morisons.
The Glasgow partners decided that Bishops would not specialise in corporate law and that Mr Hynd would no longer be needed. However, it was Morisons Bishop that made Mr Hynd redundant before the firm was formally dissolved.
Mr Hynd brought a claim for unfair dismissal against Morisons Bishop on the basis that he was dismissed for a reason relating to the transfer of Morisons Bishop to Bishop. Morison Bishop asserted that the dismissal was fair as it was for an Economic Technical or Organisational reason entailing changes in the workforce (‘ETO reason’).
The Court of Session agreed with Mr Hynd. The Court held that the dismissal could only be fair if Morison Bishop could show that, at the time of the dismissal (that is, before the transfer), Morison Bishop (as opposed to Bishops) had an ETO reason for the dismissal. Morison Bishop could not demonstrate this. At the time of the dismissal, there was still a need for corporate lawyers. It was only post-transfer that that requirement ceased.
In conclusion, a transferor should avoid making any pre-transfer dismissals on the basis of a transferee’s post-transfer ETO reason.
Although this case was decided by the Scottish Court of Session it is likely to be followed by English courts in practice, particularly in light of previous decisions in English courts.