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03 June 2015

Disciplinary action and transfer of undertakings collide

In a case which tackled the issue of what happens when disciplinary action against an employee and a transfer of undertakings take place simultaneously, the Employment Appeal Tribunal (EAT) has ruled that where an employee's appeal against a decision that they should be dismissed is successful, it is not necessary for the outcome of the appeal to be communicated to them for their contract of employment to be 'revived' (Salmon v Castlebeck Care (Teesdale) Limited and Another).

Mrs Salmon had launched an internal appeal against her dismissal by Castlebeck Care (Teesdale) Limited for alleged gross misconduct. Castlebeck's business was subsequently transferred to Danshell Healthcare Limited and her appeal was heard by the transferring HR Director after the transfer had taken place.

Her appeal was successful. However, she was not informed of that decision nor was she reinstated in her old job. Danshell instead instructed employment consultants to agree a settlement with her, but this did not happen.

Mrs Salmon launched proceedings against both companies and, whilst her claim against Castlebeck was upheld by the Employment Tribunal (ET), her claim against Danshell was rejected on the basis that there had been no clear decision made to reinstate her and so it had never been her employer.

In upholding Mrs Salmon's appeal, the EAT found that the ET had erred in law in thinking that the law required there to be not only a successful appeal but also a clear decision to reinstate before her contract of employment was revived. This had occurred when her appeal was allowed. It had not been necessary to communicate to her the result of her appeal – it should not be equated with the situation in which an employee must be told of a decision to dismiss them – nor to arrange her reinstatement for such a revival to occur.

Danshell was thus the correct target of Mrs Salmon's claim and the ET's findings against Castlebeck, which was in administration, were discharged.

Jo Davis, partner in the employment practice at B P Collins, commented: “When a business or a part of a business changes hands, employment issues can become complex and it is important to take advice early on to avoid the pitfalls. We can guide you through the process in order to ensure compliance with the applicable employment law.”

To contact Jo, call 01753 279029 or email

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