Successful appeal against dismissal revives employment, even after TUPE transfer

The EAT has recently explored the implications of a well-established legal principle that a successful appeal against dismissal will revive the contract of employment: in effect the employee will be treated as if the dismissal had never happened.

In this case the claimant was summarily dismissed for gross misconduct six weeks before a TUPE transfer of the healthcare business in which she worked, from Castlebeck Care to Danshell Healthcare. Her appeal was not, however, decided until two weeks after the transfer. It was heard by two officers whose employment had by then transferred to Danshell. Rather than accepting the claimant back into employment, Danshell instructed its employment consultants to start negotiations on a settlement agreement. No agreement was reached and she brought unfair dismissal proceedings against both Castlebeck (the former employer and transferor) and Danshell (the transferee).

The employment tribunal had dismissed the claim for two reasons. First, Danshell had not made a decision to reinstate the claimant, and secondly this decision had not been communicated to her. The EAT said that neither of these reasons displaced the general rule that, as a matter of contract, upholding an appeal against dismissal meant that the original contract of employment was revived. It therefore followed the claimant had to be treated as employed in the transferring business immediately prior to the transfer, and her employment transferred to Danshell under TUPE.

This case underlines the importance of appreciating that upholding an appeal will automatically result in the contract of employment being revived, unless this principle is displaced by express wording in the contract of employment. Transferees in particular need to be alive to the impact of appeals from pre-transfer dismissals, which reinforces the need for effective due diligence prior to TUPE transfers.