Dismissal on the transfer of an undertaking

Where an undertaking or a part of an undertaking is transferred from one employer to another (for example, through the sale of the undertaking or part of the undertaking), if either the old or the new employer dismisses an employee solely or mainly because the undertaking or part of the undertaking has been transferred, the dismissal will be considered unfair.

However, if a dismissal associated with the transfer, either by the old or the new employer, is necessary for economic, technical or organisational reasons entailing changes in the workforce, it may be considered fair if a tribunal finds that this is the main reason for dismissal and if it also finds that the employer acted reasonably in treating this reason as sufficient to justify dismissal. For further information, see the document Employment rights on the transfer of an undertaking (PL699).