Dismissal During TUPE Transfer

TUPE (Transfer of Undertakings Protection of Employment) provides strong protection against dismissal when businesses change hands.

What Is TUPE?

Transfer of Undertakings

TUPE applies when:

• Business or part of business is sold or transferred
• Service provision changes (outsourcing, insourcing, re-tendering)
• Assets, contracts, employees move to new employer

Core Principle

Employees transfer automatically:

• Same terms and conditions
• Continuous employment preserved
• As if no change occurred
• "Warts and all"

Purpose

Protects employees from:

• Losing jobs due to transfer
• Worsening of terms
• Breaking continuity of service
• Unfair treatment

Automatic Unfair Dismissal

Basic Rule

Dismissal is automatically unfair if:

• Sole or principal reason is the transfer
• Or reason connected to the transfer

Unless:

• There is an ETO reason (see below)

No Qualifying Service

For TUPE dismissals:

• No 2 years' service needed
• Protection from day one
• Compensation uncapped for automatically unfair
• Strong employee protection

What's "Connected to the Transfer"?

Clearly Connected

Dismissals obviously connected:

• "We're being taken over, you're dismissed"
• Dismissed to make business more attractive to buyer
• Dismissed because new employer wants fewer staff
• Dismissed to cut costs before transfer
• Dismissed because terms don't match new employer's

Timing

Suspicious timing suggests connection:

• Dismissed just before transfer
• Dismissed during transfer period
• Dismissed immediately after transfer
• Close proximity creates inference

Burden of Proof

If dismissal close to transfer:

• Burden on employer to prove not connected
• Must show genuine ETO reason
• Or completely unrelated reason

ETO Reasons

What Is ETO?

"Economic, Technical or Organisational reason entailing changes in the workforce"

Three types:

Type	Meaning
Economic	Financial or business reasons requiring workforce changes
Technical	Changes to equipment, processes, technology requiring workforce changes
Organisational	Changes to structure, management, workflow requiring workforce changes

"Entailing Changes in the Workforce"

Crucial requirement:

• Must involve changes to workforce
• Numbers or functions of employees
• Job losses or role changes
• Not just harmonization of terms
• Actual headcount or job content changes

Examples of Valid ETO

• Genuine redundancy due to merged roles after transfer
• Restructure requiring fewer staff in combined business
• Different skills needed in new structure
• Relocation making role redundant

NOT ETO

These don't qualify:

• Cutting costs without changing workforce structure
• Harmonizing pay and conditions
• Transfer itself
• New employer preference
• Making business more attractive to buy

When Dismissal May Be Fair

Valid ETO Reason

Dismissal fair if:

1. Genuine ETO reason - economic, technical or organisational
2. Entails workforce changes - actual changes to roles/numbers
3. Fair process - proper consultation and procedure
4. Reason is principal reason - not just convenient timing
5. Within reasonable responses - proportionate action

Example Fair Dismissals

Scenario	Why Fair
Two businesses merge, duplicate roles genuinely redundant	ETO - genuine redundancy
New technology post-transfer, role no longer needed	ETO - technical reason
Restructure for efficiency, fewer roles needed	ETO - organisational reason

Still Needs Fair Process

Even with ETO reason:

• Proper consultation required
• Fair selection if redundancy
• Consider alternatives
• Follow procedure
• Allow appeals

When Dismissal Is Automatically Unfair

Connected to Transfer

Automatically unfair if:

• Dismissed to facilitate transfer
• Terms don't suit new employer
• Cost-cutting before transfer
• New employer wants different structure (without ETO)
• Harmonization of terms
• Transfer itself is reason

Examples Automatically Unfair

Scenario	Why Automatically Unfair
Dismissed week before transfer to reduce headcount	Connected to transfer, not ETO
Salary too high for new employer's structure	Cost reason not entailing workforce changes
New employer wants own staff	Transfer reason, not ETO
Refuse to accept worse terms after transfer	Connected to transfer

No ETO Defense

If reason doesn't entail workforce changes:

• Cost-cutting alone not enough
• Must be actual job changes
• Harmonization not sufficient

Dismissal Before Transfer

By Old Employer

If dismissed before transfer:

• Protection still applies
• Cannot dismiss to facilitate transfer
• Must have ETO reason or be unrelated
• Timing will be scrutinized

Void Dismissals

In some cases:

• Dismissal may be void
• Employment deemed to transfer anyway
• New employer liable
• Complex legal position

Dismissal After Transfer

By New Employer

If dismissed after transfer:

• Still protected if connected to transfer
• Must show ETO or unrelated reason
• Timing still relevant
• Cannot escape TUPE protection

When Connection Fades

Over time:

• Connection to transfer weakens
• Months or years after, less connected
• But immediate post-transfer dismissals highly suspicious

Refusing to Transfer

Your Right to Object

You can refuse to transfer:

• Must object before transfer
• Employment ends on transfer date
• NOT dismissal
• No unfair dismissal claim
• No redundancy pay
• Clean break

Weighing Up

Consider:

• New employer's reputation
• Terms likely to change
• Job security with new employer
• Alternative employment
• Financial position

Changing Terms After TUPE

Immediate Changes Void

Changes connected to transfer are void:

• Cannot worsen terms because of transfer
• Even if you agree
• Protection for period after transfer

When Changes Permitted

May change terms if:

• Unconnected to transfer
• ETO reason exists
• Genuine business reason later
• You genuinely agree (and not transfer-connected)

Dismissal for Refusing Changes

If you refuse changes after transfer:

• Dismissal automatically unfair if changes connected to transfer
• May be fair if ETO reason or unconnected
• Timing and reason crucial

Information and Consultation

Employer Duties

Old and new employers must:

• Inform employee representatives
• Explain transfer details
• Consult on measures affecting employees
• Provide information in advance

Failure to Inform/Consult

Can claim:

• Protective award (up to 13 weeks' pay)
• If not properly informed/consulted
• Separate from unfair dismissal

Redundancy and TUPE

Genuine Redundancy

If redundancy arises:

• Must be genuine ETO reason
• Fair selection required
• Proper consultation
• Redundancy pay due
• Alternative roles considered

Bumping

Can dismiss different employee:

• Select A for redundancy
• Transfer B instead
• If ETO reason exists
• Fair process essential

Discrimination and TUPE

Protected Characteristics

TUPE doesn't override:

• Equality Act protections
• Cannot use TUPE to discriminate
• Dismissal must not be discriminatory
• Selection criteria must be fair

Constructive Dismissal

Breach During Transfer

If employer breaches contract:

• Significantly worsens terms
• Makes working conditions intolerable
• Despite TUPE protections

May resign and claim:

• Constructive dismissal
• Automatically unfair if connected to transfer

Remedies If Dismissed

Automatic Unfair Dismissal

Can claim:

• Basic award (if 2 years' service, but not needed for claim)
• Compensatory award (no cap if automatically unfair)
• Loss of earnings
• Future loss
• Pension loss

Compensation Higher

Because automatically unfair:

• No £25,000 cap on compensatory award (for TUPE)
• Can be substantial
• Reflects seriousness

Reinstatement/Re-engagement

Can request:

• Return to job (reinstatement)
• Different suitable job (re-engagement)
• Rarely ordered but possible

Practical Scenarios

Scenario 1: Dismissed Before Transfer to Cut Costs

Business being sold, 20 staff dismissed week before to make it more attractive to buyer.

• Connected to transfer
• Not ETO (no workforce changes, just cost-cutting)
• Automatically unfair
• High compensation risk

Scenario 2: Post-Transfer Restructure

After transfer, new employer restructures, genuine merger of roles, redundancies with fair process.

• Genuine ETO
• Fair process followed
• May be fair dismissal
• Redundancy pay due

Scenario 3: Refuse Worse Terms After TUPE

Transfer happens, new employer demands pay cut, you refuse, dismissed.

• Connected to transfer
• Not ETO
• Automatically unfair
• Cannot force worse terms

Scenario 4: Different Employer Standards

New employer has different attendance policy, dismisses for absences that old employer tolerated.

• Must assess if connected to transfer
• If immediate, likely connected
• If months later and fair process, may be unconnected
• Timing crucial

Challenging Dismissal

Grounds

Argue dismissal was:

• Connected to transfer
• No valid ETO reason
• ETO reason doesn't entail workforce changes
• Process unfair
• Discriminatory
• Real reason was transfer

Evidence

Gather:

• Timeline of transfer and dismissal
• Communications about transfer
• Business reasons given
• Comparator treatment
• Consultation documents
• Evidence of ETO or lack thereof

Time Limits

• 3 months less 1 day from dismissal
• ACAS early conciliation first
• Also consider consultation failure claim

Employer Best Practice

If Considering Dismissals

• Ensure genuine ETO reason
• Document business case
• Show workforce changes
• Follow fair process
• Get legal advice
• Expect tribunal scrutiny

During Transfer

• Inform and consult properly
• Don't dismiss to facilitate
• Preserve terms and conditions
• Consider alternatives
• Document everything

Summary

Core Protection

• Cannot dismiss solely because of TUPE transfer
• Dismissal connected to transfer is automatically unfair
• Strong employee protection
• No qualifying service needed

ETO Exception

Dismissal may be fair if:

• Genuine economic, technical or organisational reason
• Entails changes in workforce
• Fair process followed
• Proportionate response

Key Points

• TUPE protects against transfer-related dismissals
• Must be genuine ETO reason or unrelated
• Timing creates inference of connection
• Burden on employer to prove valid reason
• Process must be fair
• Compensation uncapped if automatically unfair

For Employees

• Strong protection during transfers
• Employers need valid ETO reason
• Cannot dismiss for transfer itself
• Cannot worsen terms due to transfer
• Can object to transfer
• Challenge if dismissed

For Employers

• TUPE dismissals very high risk
• Must have genuine ETO reason
• Process must be exemplary
• Get specialist legal advice
• Document everything
• Expect tribunal if dismiss near transfer

TUPE provides robust protection. Dismissals connected to business transfers face intense scrutiny and are automatically unfair unless a genuine ETO reason exists and fair process is followed.