The Court of Appeal has held in Hare Wines Ltd v Kaur and anor that dismissing an employee on the day of a TUPE transfer due to difficulties in her working relationship with an employee of the transferee was automatically unfair in accordance with Reg 7 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”). It was concluded that as the dismissal stemmed from the reluctance of the transferee to take on Ms Kaur, the transfer was the sole or principal reason for the dismissal.
Ms Kaur was employed by H&WW Ltd, whose directors were H and W, and had a strained relationship with a colleague. In December 2014, H&WW decided to cease trading for financial reasons. In turn, it was decided that H&WW Ltd’s business and employees would be taken on by a new company, named HW Ltd. H was initially the sole director and shareholder of HW Ltd and it was intended that the colleague with which Ms Kaur had a poor relationship would eventually become a director.
On 9 December 2014, H&WW Ltd transferred as a going concern and Ms Kaur was dismissed. The reason given for the dismissal was that H&WW Ltd was ceasing to trade due to unforeseen circumstances. Ms Kaur brought a tribunal claim for automatic unfair dismissal under TUPE among other things. Both H&WW Ltd and HW Ltd were named as respondents.
Once the employment judge had dealt with a conflict of evidence and preferred Ms Kaur’s evidence about how the dismissal took place, her automatic unfair dismissal claim was upheld. It was held that Ms Kaur was dismissed due to the anticipated difficulties between her and the colleague with whom she had a strained relationship. It was therefore concluded that the sole or principal reason for her dismissal was the transfer, and so it was deemed to be automatically unfair.
HW Ltd appealed unsuccessfully to the EAT and in turn to the Court of Appeal. It was argued that the reason for dismissal was the difficulties in her working relationship with the colleague, which was personal to her and therefore the transfer was not the reason for dismissal. The Court of Appeal also dismissed this appeal and held that the employment judge was entitled to reach the conclusion that she did.
It was highlighted that Ms Kaur was dismissed on the day of the transfer which, while not conclusive, was strong evidence that the reason for her dismissal was the transfer itself. The Court also pointed to the fact that the poor relationship had been tolerated for some time with no effort made to terminate Ms Kaur’s employment.
This case should serve as a guide to employers seeking to dismiss employees in advance of or following a TUPE transfer. Dismissals should only be unfair under TUPE when the sole or principal reason is the transfer. However, this case shows that even where there may be ‘personal’ reasons for a dismissal, particular caution must be taken if a dismissal takes place close to the transfer itself. New employers cannot simply ‘cherry pick’ who they want to transfer.