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TUPE and Leases

A recent EAT case considered whether the assignment of a lease of commercial premises amount to a TUPE transfer under TUPE 2006.

In the case of LOM Management v Sweeney a tenant ran a pub in Glasgow under a commercial lease. The lease was later assigned to a new tenant. When that happened, the employees of the old tenant were told they no longer had jobs. One employee of the old tenant raised an unfair dismissal claim claiming she had been automatically unfairly dismissed by the new tenant.

The Employment Tribunal held that there had been a TUPE transfer and therefore the Claimant had been automatically unfairly dismissed by the new tenant.

However, on appeal to the EAT, the EAT held that whilst TUPE can apply where there has been an assignment of a lease of commercial property, the relevant provisions of TUPE must be met i.e. there must be a transfer of an undertaking, business or part of an undertaking or business situated immediately before the transfer in the United Kingdom to another person. As such, the assignment of a commercial lease does not of itself establish that TUPE applies. In the circumstances, the Tribunal had not applied the relevant legal principles and therefore its decision was wrong in law. The EAT upheld the appeal and dismissed the claim.

Whilst this case might be surprising, as on the face it of it looked as if TUPE might apply, it is nonetheless a useful reminder that the principles of TUPE must be applied to the facts of any particular case before a finding that there has been a TUPE transfer will be made.

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