TUPE Applies to Pre-pack Administrations

[Thanks to James Medhurst of Employment Law Advocates for preparing this case summary]

The EAT (Underhill P) has handed down its decision in OTG Ltd v Barke, which is authority for the proposition that an administration can never qualify as "insolvency proceedings with a view to the liquidation of the assets of the company" within TUPE regulation 8(7).

Accordingly, any employees who are employed by the transferor immediately before the transfer will have their contracts transferred under TUPE. The earlier decision of the EAT in Oakland v Wellswood was not followed.

The EAT stated that the situation is different for employees who have already been dismissed by the transferor or the administrator by the time of the transfer (unless there is an attempt to circumvent TUPE). The employee will have to make a claim to the Insolvency Fund for any redundancy payment or wages that remain unpaid.