The Court of Appeal has heard the appeal in Oakland v Wellswood (Yorkshire) Ltd. Although its written judgment has not yet been published, it appears that it heard an appeal only on a narrow point of employment law and did not give definitive guidance on the application of the insolvency provisions in the TUPE Regulations which had been the principal issue in the EAT. See our previous E-Bulletin on the EAT decision.

Pursuing a new line of argument on appeal, Mr Oakland relied on section 218 of the Employment Rights Act 1996 to contend that as the business in which he worked had transferred to the buyer, his continuity of employment had not been broken. The Court agreed and accordingly he had sufficient length of service to bring an unfair dismissal claim, even though there was no finding that he had transferred to the buyer under TUPE.

The Court was not required to consider the application of regulations 8(6) and 8(7) of the TUPE Regulations to the sale of a business in administration and it did not expressly overturn the EAT's decision on this issue. It did, however, express doubts that regulation 8(7) would automatically apply in an administration.

Impact

  • In our view, the EAT decision on the application of regulation 8 of TUPE was of limited application even before this appeal.
  • It must be regarded with caution and should not be taken as being of general application to the sale of a business from administration, whether by a pre-pack sale or otherwise.
  • Given the remaining conflict between the EAT decision and government guidance on the application of regulation 8 of TUPE, the application of TUPE in insolvency situations must be considered very much on a case by case basis taking into account factors such as the type of insolvency procedure, the circumstances in which it began, the content of any report(s) by the insolvency practitioner and the assets being disposed of.