The EAT's judgment
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United Kingdom, Employment & Labor, Insolvency & Restructuring, Litigation, Gowling WLG, Contractual term, Bankruptcy, Debt, Liquidation, Prejudice, Transfer of Undertakings (Protection of Employment) Regulations 2006 (UK), Transfers of Undertakings Directive (2001/23/EC), Employment Appeal Tribunal
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Pre-2006, it was always clear that TUPE applied to transfer employees working in a business when it was bought out of administration. However, changes in 2006 provided that the automatic transfer principle would not apply to any transfer of a business or undertaking where the transferor was the subject of bankruptcy proceedings, which had been 'instituted with a view to the liquidation of the assets of the transferor'.
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The Court of Appeal has resolved conflicting decisions at EAT level and confirmed that dismissals which are connected with a subsequent TUPE transfer can be automatically unfair under TUPE even where no specific transfer or purchaser is contemplated at the time of dismissal.
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