Representation:-

a sale of a business was covered by the TUPE regulations even though none of the employees were taken on by the new owner; and

Authority for the propositions that:-

1. there is a distinction between the reason for a dismissal of an employee and the occasion for it (see Whitehouse v Blatchford & Sons Ltd 2000 ICR 542, CA). If the principal reason for a dismissal is the transfer of the employing business then that dismissal is automatically unfair (TUPE regulations 1981 (SI 1981/1794) reg 8) and in that case there is not an "economic, technical or organisational reason entailing changes in the workforce" (ie an "ETO" reason - see TUPE regs 1981, reg 8(2)) and therefore no consideration should be given to normal "fair or unfair" principles;

2. the obligation to consult employees before sale of an employing business arises under TUPE regulations 1981 (SI 1981/1794) reg 10 regardless of how many employees are involved and regardless of whether or not they are represented by a trade union.

3. liability for compensation due to dismissed employees both for unfair dismissal and failure to consult in circumstances such as those of the present case passes to the new owner of the business under TUPE regulations 1981 (SI 1981/1794) reg 5.

editor's note:
The specific problem addressed in this case is now likely to be of historical interest only. The 2006 TUPE regulations provide that if compensation is due to an employee because of failure to inform/consult before a relevant transfer above then the transferor and transferee employer shall be jointly and severally liable (TUPE regulations 2006 (SI 2006/246) reg 15(9)).

For relevant general notes see Transfer of business or undertaking/economic, technical or organisational defence and the notes on Transfer of business or undertaking/consultation .