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The Ordinary TUPE Rules apply when a business enters administration- 01/04/2011
For sometime it was questionable whether the usual rules of TUPE applied when a company went into administration. In certain circumstances if there was “a relevant insolvency procedure” then the ordinary rules of TUPE would not apply meaning that there would not be an automatic unfair dismissal for dismissals that arise because of or connected to a transfer of a business.
At last we now have clarity on the situation in that the Employment Appeal Tribunal has ruled that an administration cannot be a relevant insolvency procedure and a business in administration does not take the benefit of the exception to the TUPE rules. Therefore if a business fails and enters into administration the ordinary rules of TUPE will apply meaning that if there is a dismissal arising out of the transfer of the business will be automatically unfair unless the defence of an economic, technical or organisational reason entailing changes in the workforce can be established.