Employment law

TUPEThompson v SCS Consulting Ltd and others (2001) IRLR 801A sales executive was dismissed by receivers at the behest of purchasers of an insolvent business shortly before a transfer of undertaking took place.The Employment Appeal Tribunal (EAT) ruled that whether 'an economic, technical or organisation reason' within regulation 8(2) of Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) was the reason for dismissal is a question of fact for the tribunal.

In making its decision, the tribunal must consider whether the reason was connected with the future conduct of the business as a going concern.

The tribunal may take into account whether there was any collusion between the transferor and the transferee and whether the transferor or those acting on its behalf had any funds to carry on the business at the time of the decision to dismiss.On the facts of the present case, it was open to the tribunal to conclude that the business in question was over-staffed, inefficient and insolvent.

The only way in which it could be made viable for the future, and continued as a going concern, was for the workforce to be reduced.The tribunal found as facts that this was not a case of collusion and that if the purchaser had not been on the scene, the receiver would have dismissed all the employees.On that basis, the dismissal of the employee could be seen as taking place not in order to secure a sale or to enhance the sale price or at the behest of the transferee - but for an economic, technical or organisational reason.Furthermore, an employment tribunal had not erred in finding that liability for the dismissal for an economic, technical, or organisational reason was not transferred to the transferee.DiscriminationCoker & Osamor v Lord Chancellor & Lord Chancellor's Department (2002) IRLR 80The Court of Appeal, like the EAT (2001) IRLR 106, ruled that a tribunal was wrong to find that the Lord Chancellor was guilty of sex discrimination because he imposed a requirement or condition that his special adviser must be personally known to him (1999) IRLR 396.According to the Court of Appeal, where a requirement excludes almost the entirety of the pool for comparison, it cannot constitute indirect discrimination.

The test of indirect discrimination focuses on the effect that the requirement objected to has on the pool of potential candidates.

It can only have a discriminatory effect if a significant proportion of the pool are able to satisfy the requirement.Only in that situation will it be possible for the requirement to have a disproportionate effect on the men and the women, or the racial groups, which form the pool.Accordingly, making an appointment from within a circle of family, friends and personal acquaintances is seldom likely to constitute indirect discrimination.

In a postscript, the Court of Appeal emphasised that its judgment was not concerned with the practice of recruiting by word of mouth, which may sometimes constitute indirect discrimination.

The editor of the IRLR criticises the Court of Appeal's reasoning, but leave to appeal to the House of Lords was refused.By Martin Edwards, Mace & Jones, Liverpool