16 August 2018
In this recent case, the management of a school in Spain was sub-contracted out by the local authority. In the midst of a dispute the contractor dismissed all of the school’s staff on 27 March 2013. Around a week later the contractor ceased its activities and was eventually wound up in July 2013. A new contractor was appointed by September 2013. The new contractor did not engage any of the staff who had been dismissed in March 2013, but the school re-opened, using the same premises, instruments and resources.
The Claimant and some of his colleagues brought unfair dismissal claims against the previous and new contractor but they were unsuccessful. One of the points raised by the court was that there had not been a transfer of an undertaking because there had been a 5-month gap between the activities ending and resuming.
The point was referred to the ECJ who found that a situation such as this one was capable of being a transfer. Particularly given that 3 of the 5 months had been school holidays. However, they did also comment that it was likely that an ETO reason could be relied on here as the Claimant was dismissed because the original contractor could not pay him and not because of the transfer (unless the delay was deliberate then this may assist the Claimant). This has been referred back to the Spanish courts to decide.
Previous cases have also looked at this point domestically and noted that a temporary cessation may not defeat TUPE applying and that there is nothing in TUPE itself that requires the employees to be actively engaged in the activity immediately before a service provision change. However, this decision is, like most TUPE cases, very fact specific and employers involved in any kind of transfer will need to carefully consider all relevant factors relating to the break in activities.