4 July 2012

TUPE anoraks this way

For sad TUPE anoraks, Landsorganisationen i Danmark v Ny Molle Kro and Daddy's Dance Hall are classic cases, where transfers of leases of a bar and nightclub respectively were found to be transfers of undertakings.  LOM Management Ltd v Sweeny (Transfer of Undertakings) (2012) UKEAT was a case where the daughter of tenants of a Glasgow pub maintained that she was transferred to the new tenant when the lease was transferred. She argued that her situation was the same as in those cases. The ET agreed, but the EAT took the view that while it was possible for the reversion of a pub tenancy to the brewery and reletting to a second to amount to a transfer of an undertaking, it would not do so unless there was evidence of a transfer of an economic entity which retains its identity, and according to the EAT there was no such economic entity in this case.

Interestingly (at least to anoraks), prior to the original TUPE regulations being introduced in 1981, there had been a line of authority ( Young v Daniel Thwaites & Co Ltd[1977] ICR 877, EAT)  suggesting that in the case of licenced premises, employees' continuity of employment would be preserved on the transfer to a new tenant, under what is now s218(2) of the Employment Rights Act 1996. The premise was that in the case of pubs, there would be a transfer of a going concern when the new tenant took over. This possibility seems not to have been discussed in this case. Still, that was an awfully long time ago and the provision in question does not give the same protection against dismissal as TUPE.