Spaceright Europe Ltd v Baillavoine and anor, UKEAT/0339/10

The EAT in this case held that the dismissal of Mr Baillavoine by his employer, a company in administration, was unfair under TUPE even though no transferee had been identified when the dismissal took place.  

Mr Baillavoine was Chief Executive of Ultralon which was placed into administration on 23 May 2008.  He was dismissed on the same day by the administrators and a month later the business and assets of Ultralon and its two subsidiaries were sold as a going concern to Newco Spaceright, the two directors of which had worked for Ultralon.   

It was claimed that the sole reason for his termination was an ETO reason connected with the transfer because he was dismissed to enable a purchaser to acquire the business and assets without his continued and expensive employment.  His dismissal may have been for an economic or organisational reason but this did not entail changes in Ultralon’s workforce.  The continuing business was always going to need a CEO.  In fact there was no reduction in the number of employees in the new business as he was replaced.  Spaceright was therefore liable for the unfair dismissal.  

Key point:  The dismissal of one employee and the employment of another in his place does not constitute a change in the workforce under TUPE.  It was not necessary for the specific transferee to be identified on or before the moment of dismissal.