The EAT has confirmed that it is not necessary for the eventual transferee to have been identified in order for an employee, dismissed in the run up to a transfer, to claim automatic unfair dismissal by reason of a relevant transfer under TUPE (Spaceright Europe Ltd v Baillavoine & another).

Administrators will note with concern the decision of the East London Employment Tribunal in Spencer v Lehman Brothers (in administration) and Others, which suggests that administrators can be held to be personally liable for the discrimination of employees of the business in administration.

The Court of Appeal in Haine v Secretary of State for Business Enterprise & Regulatory Reform has held that where redundancies are made in breach of obligations to carry out collective consultation and the employer then goes into insolvency, a protective award subsequently ordered by an employment tribunal is a debt in the liquidation.

Impact on employers

In Dynamex Friction Ltd v Amicus an administrator had dismissed the entire workforce immediately on being appointed because the company had no money to pay its debts. At that time no transferee of the insolvent business had been identified and there was no prospect of a sale. However, the administrator did shortly afterwards agree a sale of the remaining company assets to a newly formed purchaser company that had links with the directors of the ‘old’ company.