Pre-pack Administration and TUPE

Shiva Shadi, Partner and Head of Employment at Davis Blank Furniss

The CJEU has held in a Dutch case that administration (including “pre-packs”) is not primarily aimed at liquidating the undertaking.  Therefore employees would not lose the right to transfer when all or part of that undertaking is transferred.

The position would be different if the organisation was being liquidated for the benefit of creditors.  The Court also held that TUPE transfer would not occur in the event of “bankruptcy proceedings or any analogous insolvency proceedings”.

The TUPE Regulations are very specific as to whether TUPE applies or doesn’t in terms of organisations that go into administration or alternatively where there are insolvency proceedings in place.  It is always crucial to check the facts against the TUPE Regulations to ensure that you don’t fall foul of the consequences of whether a company is in administration and whether proceedings have been instituted with a view to liquidating the assets of the company.

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