This case concerned an appeal against a decision that the claimants had transferred to the transferee (C) due to the fact that the official appointment of administrators to the haulage company Bulmers (B) had taken place after the transfer.
It was argued the potential administrators acted in a purely consultative capacity when they were asked (prior to the transfer) about the inevitability of a termination of the business’ trading activity and the likelihood of a voluntary winding up. B was in severe financial difficulties and a winding up order had been issued by HMRC. Trading activities ceased on Friday and C adopted the business’ major contracts on the Monday.
Before B reached the stage of complete cessation of trade, B invited a firm of insolvency practitioners to the premises. It was only after the transfer of employees that other insolvency practitioners were appointed to B. C argued that B under the supervision of an insolvency practitioner within Reg. 8(7) of TUPE 2006, and as a result Regs 4 and 7 of TUPE did not apply and it was not obligatory for C to employ B’s employees on identical terms of their previous employment contracts. This argument was dismissed by the ET.
The ET held that the potential insolvency practitioners were not supervising B or its business or the liquidation of its assets and that B was not under the management of an insolvency practitioner. This decision was subsequently appealed by C but the appeal was ultimately rejected by the EAT on the grounds that there had been no appointment, formal or informal, of a insolvency practitioner.
The EAT relied on the case of Slater v Secretary of State for Industry (2007 IRLR 928) and Key2Law v De Antiquis (2012 URLR 212) which affirms that an appointment was 58 essential before there could be said to be supervision by an insolvency practitioner. The practitioners had been on site by invitation and for advisory purposes only. http://bit.ly/1cUyI2I
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