Spaceright Europe v Baillavoine and others UKEAT/0339/10represents another in a line of recent cases where the EAT has considered how the TUPE regulations apply where an administrator has been appointed to manage the business of the employer company.
In this case, the administrator had dismissed the MD, not because there was a sale in prospect but because 'no purchaser of the business would require such an officer'.
One month later the business was sold and the MD made a claim against the purchasers for automatic unfair dismissal under TUPE, his dismissal being for a reason connected with the transfer. The tribunal and the EAT agreed.
Points to note –
- The EAT confirmed that, although previous EAT decisions are confused on this question, it was correct to say that a dismissal could be connected to a transfer even if no particular transfer was in contemplation at the time of the dismissal.
- This decision contrasts with the EAT decision in Page and anor v Lakeside Collection and anor UKEAT/0296/10 (reported by us in January 2011), where an administrator was held to have fairly terminated the contracts of the directors by reason of redundancy – there being nothing for them to do while the company was in administration. This was for an 'economic, technical and organisational' reason under the TUPE regulations so that no liability for their dismissals passed to the transferee company to whom the administrator sold the undertaking shortly afterwards. One difference seems to have been that in Baillavoine there was a suggestion that there had been collusion between the administrator and the transferee over the dismissal of the MD.