Reason for dismissal

Case 4: The facts

When car firm MG Rover went into administration, a supplier of vehicle interiors (most of whose business had been with MG Rover) made 72 staff redundant before itself going into administration. Its remaining assets were transferred to a new company, which secured a contract to design another car’s interior.

A number of staff brought unfair dismissal claims, arguing that their dismissals were automatically unfair under TUPE. A tribunal agreed.

The ruling

The Employment Appeal Tribunal (EAT) found that the tribunal had not properly considered the issues and sent the case back to it for further consideration. However, the EAT confirmed that the case rested on whether or not the company knew before it dismissed staff that there was going to be a transfer. If it did, and the reason for the dismissals was to make the company more attractive to a potential purchaser, the dismissals were by reason of the transfer or a reason connected with it, and therefore unfair. If this was not the case, the transfer was not the reason and TUPE did not apply.