Pre-transfer dismissal by administrator not automatically unfair

In Page and anor v Lakeside Collection and anor the EAT confirmed the circumstances in which it is possible to avoid liability for automatic unfair dismissal in a TUPE situation.

In this case, the administrator of the employer company 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 amounted to an 'economic technical and organisational' reason under the TUPE regulations, so that any liability for their dismissals did not pass to the transferee company to whom the administrator sold the undertaking shortly afterwards.

It would have been different if there had been any collusion between the administrator and the transferee over the dismissals, but there was no evidence of that in this case.