Transfer rumours

Lawyers are warning anyone who is considering buying a business to look again at TUPE regulations and tread carefully after a recent ruling held a purchaser responsible for the mis-deeds of the vendor.

Damages of £190,000 were awarded to four claimants against Express Gifts Ltd, which bought Health & Home Shopping out of administration in October 2007, after a judge ruled that the purchaser of a company is responsible for staff dismissals that have taken place even before any deal to buy the business has been concluded.

The tribunal held that the dismissal of one of the claimants was connected with the transfer and thus attracted the protection offered by the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), even though Express Gifts had not been identifi ed as the purchaser at the time of dismissal, which occurred three weeks before the transfer. At that time, Express Gifts was only one of a large number of potential purchasers.

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