Facts
Forth Dry Dock & Engineering Co Ltd went into receivership. Its receivers agreed to sell the business to Forth Estuary Engineering Ltd. The employees bringing the claim were dismissed about an hour before the transfer. The reason for the dismissals was the impending transfer.
Issue
Did the employees fall within regulation 5 of the Transfer of Undertakings (Protection of Employment) Regulations 1981 when they had been dismissed just before the transfer? The answer determined whether employment liabilities passed to the buyer.
Decision
The House of Lords allowed the employees’ appeal and restored the Employment Appeal Tribunal’s order. The regulations were intended to implement the European Community’s Acquired Rights Directive. The House read regulation 5(3) to cover employees who would have been employed immediately before the transfer had they not been dismissed by reason of it.
Law Teacher writing support
Writing a law essay?
We choose a writer who is an expert in your area of law and qualified to at least the academic level you select. Most of our writers hold a master’s degree or PhD, have teaching experience, or both.
Send us your question and, if you wish, any marking criteria. We’ll write an essay to your instructions.
The dismissals therefore did not prevent the regulations from treating the employment as continuing with Forth Estuary. The House declined to reopen whether an economic, technical or organisational reason justified the dismissals.
Reported citations: [1990] 1 AC 546, [1990] AC 546, [1989] ICR 341, [1989] 2 WLR 634, 1989 SC (HL) 96, [1989] 2 CMLR 194, [1989] 1 All ER 1134, 1989 SLT 540, [1989] IRLR 161
Source: Full judgment
