Appellate court, Crystal Palace F.C., Economic Technical or Organisational Reason Exception, employment tribunal, ETO, Harini Iyengar, Insolvency, Reason, Transfer of Undertakings (Protection of Employment) Regulations 2006, TUPE
With a title such as this one, you know it will be a gripping read, so I will make it easy for you!!
In a welcome judgment for employers involved in TUPE the elusive ETO defence can be operated successfully but (yes there is a large but) the Court of Appeal (CA) has stressed that the use of the ETO defence is highly fact-sensitive.
Obtaining the right evidence is going to be crucial and the CA’s analysis shows clearly that success will continue to depend upon the quality of the documentary and witness evidence available, and upon cross examination of witnesses, with its inherent uncertainties.
In Crystal Palace FC Ltd and CPFC 2010 Ltd v Kavanagh and others  EWCA Civ 1410 the CA restored the judgment of the Employment Tribunal (“the ET”) that the employees should not be treated as unfairly dismissed for a reason connected with a transfer under regulation 7 of the TUPE (“Regulation 7”) because the reason for dismissal had been an economic, technical or organisational reason entailing changes in the workforce. Briggs LJ stated:
“Regulation 7 unambiguously requires a subjective fact-intensive analysis of the ‘sole or principal reason’ for the relevant dismissal, so that the Employment Tribunal needs to be astute to detect cases where office holders of insolvent companies have attempted to dress up a dismissal as being for an ETO reason, where in truth it has not been.”
Not lost you so far, well here is a treat…. in the employment law blog 11kbw Harini Iyengar writes very well on how the CA looked at the Economic Technical or Organisational Reason Exception (“ETO”) under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) and the tension between the employment regime and the insolvency regime.
If TUPE is your bag then I highly recommend reading the full blog and commentary here. You can also subscribe to their newly relaunched employment law blog – very useful and highly commended.