#3302 - Tupe Crib Sheet - Mergers and Acquisitions (Private Acquisitions)

TUPE

1. Is there a relevant transfer?

   1. Reg 3(1)(a) Is there an economic entity?

      1. Reg 3(2) an economic entity is an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary

   2. Reg 3(1)(a) Has that economic entity been transferred?

      1. Spikes – this is a question of fact

         1. IF YES GO TO QUESTION 2 – Is there a sale of a distinct business unit?

            1. Is the intention of the parties to transfer sufficient assets to enable the buyer to continue the business in substantially the same form after the sale

   3. Reg 3(1)(b) Has there been a change in a service provision in which activities have ceased and Reg 3(3) applies?

      1. Reg 3(3)(a) Immediately before the service provision change

         1. (i) there is an organised grouping of employees in Great Britain which has as its principal purpose the carrying out of activities concerned on behalf of the client

         2. (ii) the client intendeds that the activities will, following the change, be carried out by the transferee other than in connection with a single specific event or task of short-term duration; and

         3. Reg 3(3)(b) the activities concerned do not consist wholly or mainly of the supply of goods for the client’s use
            

2. What is the effect of a relevant transfer?

   1. Reg 4(1) an employee’s contract of employment is not brought to an end by reason of the transfer and instead transfers from the seller to the buyer

      1. Reg 4(7) except where an employee expressly objects

         1. Reg 4(8) In which case their employment contract is treated as being terminated

   2. Reg 4(2) Employees will have the same rights

   3. Reg 4(3) Applies to all employees employed by the seller immediately before the transfer or who would have been so employed had they not been dismissed in the circumstances described below
      

3. Is the employee eligible to bring a claim for unfair dismissal?

   1. Does the employee have 1 year’s continuous employment (or 2 years if entered into employment contract on or after 6 April 2012)?

   2. Can employee prove they have been dismissed; actual or constructive dismissal?

      1. IF YES TO BOTH THEN GO TO QUESTION 4

      2. No to one or both

         1. Wrongful dismissal claim (if employee did not commit a repudiatory breach)

            1. Was the requisite amount of notice given by the employer?

               1. Fixed term-contract without a break clause

                  1. Termination prior to expiry will be a breach

               2. In absence of any expressly agreed period of notice there is an implied term of ‘reasonable notice’

               3. Statutory minimum notice periods 86 ERA 1996

                  1. 1 weeks’ notice after 1 month’s continuous employment

                  2. 2 weeks’ notice after 2 years’ continuous employment

                  3. Thereafter 1 weeks’ notice for each year, up to a maximum of 12 weeks’ continuous notice

         2. Damages

            1. Starting point is the salary the director would have received over the whole period had he not been dismissed

            2. Tribunal awards restricted to 25,000

4. Was the dismissal because of the transfer?

   1. Reg 7(1)(a) Employees will be deemed to have been automatically unfairly dismissed by reason of a transfer

      1. Question of fact for the Employment Tribunal to determine whether a dismissal is by reason of the transfer itself

      2. A dismissal following pre-transfer collusion between the transferor and the transferee with regard to dismissals is likely to be regarded as a dismissal by reason of the transfer itself

   2. Reg 4(3) employee can bring a claim for unfair dismissal against the Transferee (buyer)

   3. Claim for Redundancy & Wrongful Dismissal too
      

5. Was the dismissal because of a reason connected with the transfer?

   1. Reg 7(1)(b) Employees will be deemed to have been automatically unfairly dismissed for a reason connected with the transfer unless the employer can show an ETO reason

      1. ETO reason must involve a change in the workforce

         1. Economic reason

            1. Relating to the profitability or market performance of the transferee’s business

         2. Technical reason

            1. Relating to the nature of equipment or production process which the transferee operates

         3. Organisational reason

            1. Relating to the management or organisational structure of the transferee’s business

      2. Hynd v Armstrong a transferor employer cannot rely on the transferee’s reason in order to establish an ETO

         1. Therefore to be a valid ETO reason, the reason for the dismissal must relate to the transferor’s position, not the transferee’s

   2. Reg 7(2) & (3) If there is an ETO reason then there is no automatic unfair dismissal and instead the dismissal will be regarded as redundancy or some other substantial reason to justify dismissal

      1. Employee may bring a claim for redundancy payment

         1. Does employee have 2 years’ continuous employment?

         2. Can employee prove that he has been dismissed?

         3. Does the reason for dismissal fit into 139 ERA 1995?

            1. Complete Closedown

            2. Partial Closedown

            3. Over-manning or change in type of work undertaken

         4. Claim must be brought within 6 months

   3. Did employer act fairly in accordance with 98(4) ERA 1996?

      1. Capability

         1. Do the qualifications of employee match the kind of work he was employed to do

         2. Employer should normally warn employee about standard or work, give him the change to improve & perhaps offer additional training & supervision

      2. Conduct

         1. Employer should carry out a thorough investigation & allow the employee to state his case

            1. Do not dismiss unless gross misconduct or persistent misconduct

         2. Employer follow ACAS code of practice

      3. Redundancy

         1. Employer warn & consult affected employees or their representatives & adopt a fair basis of selection for redundancy

            1. Usually involves employers drawing up a matrix of objective selection criteria & fairly marking each employee against each criterion

      4. Illegality

         1. Employee could not continue to work in position he held without contravening some statutory enactment

      5. Substantial reason for justifying dismissal

         1. If dismissal for long-term sickness, employer should consult with employee as to likely duration of illness & its nature

      1. Employer must also show that he acted reasonably in treating that reason as sufficient for dismissing employee having regard to equity and the substantial merits of the case

         1. Follow a fair process

   4. Was the dismissal before the transfer?

      1. Claim against transferor (Seller)

   5. Was the dismissal after the transfer?

      1. Claim against transferee (Buyer)

   6. Claim for Wrongful Dismissal (&...