Sale of shares

Case 3: The facts

Mr Millam was employed as a printer by Fencourt Printers (FP), which was sold to a separate company, McCorquodale Confidential Print Ltd (MCP), under a share sale agreement. After the sale, Millam’s wages were paid by MCP, which controlled the business of FP. However, the companies existed as two separate entities, with separate VAT registrations and accounts.

Both companies later went into administration. Millam was dismissed, and the next day MCP was sold to The Print Factory.

Millam brought claims including unfair and wrongful dismissal and outstanding wages, for which he first had to establish the identity of his employer.

The ruling

Share sale agreements are specifically excluded from the TUPE regulations, and the transfer of management control by itself does not involve a transfer of the business.

The Employment Appeal Tribunal noted that MCP exercised a lot of control over FP, but said this was not unusual where there was a parent company and a subsidiary. It held that the companies had separate legal identities which were run independently, and there was no evidence that they were set up as a sham or façade.

As a result, there had been no business transfer, meaning that Millam could not pursue his claims against The Print Factory.

The Print Factory (London) 1991 Ltd v Millam UKEAT/0253/06