The Court of Appeal has resolved conflicting EAT decisions and ruled that a dismissal can be "transfer-connected" even if the transferor has yet to identify a likely or actual transferee.
The dismissal by an administrator of a company CEO in order to facilitate the sale of the business was transfer-connected and not for an ETO reason (economic, technical or organisational reason entailing changes to the workforce). It was not a redundancy situation, given that the business would clearly continue to need a managing director in the future. The dismissal was therefore automatically unfair and liability passed to the transferee who purchased the business one month later.
Transferees in this situation will need to try and assess whether any pre-transfer dismissals of employees can be shown to relate to the conduct of the business, or whether they may be viewed as to facilitate its sale, and factor the risk into the price offered. (Spaceright Europe v Baillavoine, CA)
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Disclaimer
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