Employment Law – Case Law Update

Our Employment team update you on some recent decisions in employment law cases…

Can dismissal of an employee before the sale of the business impact on the new owner(s)?

The Employment Appeal Tribunal recently held that the protection offered to employees by the Transfer of Undertakings (Protection of Employment) Regulations can extend to employees dismissed before a buyer is even identified.

For the protection to apply, the dismissal will:-

  • Be connected to the contemplated transfer
  • Not be as a result of an economic, technical or organisational reason entailing change in the workforce.

Where the protection applies the dismissal will be deemed automatically unfair, and the dismissed employee will be entitled to a remedy. The remedies available are reinstatement, re-engagement or/and compensation.

This was an unusual situation. However, the general message is clear: a purchaser cannot simply rely on the seller to dismiss the employees which they do not require. If you are thinking of buying or selling a business with employees, you could avoid costly complications by discussing the transaction with us at an early stage.

When does a contractual notice period commence for the purposes of unfair dismissal claims?

Recently the Employment Appeal Tribunal reaffirmed that unless, a contract provides otherwise, contractual notice (whether oral or written) runs from the day after notice is given, and not, as believed by some, on the day that notice is given. The period for which payment in lieu of notice is paid is irrelevant as this will often be paid from the date on which notice is given rather than the day after.

The Employment Appeal Tribunal also observed as an aside that notice could be given by text, email or even instant messaging, although such course of action would obviously not be recommended. In order to avoid the uncertainty of notice being provided by emails, text message and/or instant messaging, a clause will need to be inserted into the employees’ contract.

If you would like any assistance or advice in relation to these updates, please contact our team on commercial@blasermills.co.uk.