Marshall v Game Retail Ltd

In a claim that dismissal was automatically unfair under regulation 7(1) of the Transfer of Undertakings (Protection of Employment) Regulations 2006, an employee who alleges a prohibited transfer-related reason need only produce some evidence supporting that case. The employer must then show the actual reason or principal reason for dismissal.

An employer's failure to establish its asserted reason does not inevitably establish the employee's asserted reason. The tribunal must determine the reason from all the evidence and permissible inferences. A failure to apply that allocation of proof is an error of law, but remission is required where the appellate court cannot safely decide what the tribunal would have found had the burden been correctly applied.

The claimant was a senior finance employee of Game Stores Group Plc. Administrators dismissed him for redundancy on 26 March 2012. Six days later, the surviving UK business transferred to the respondent in an accepted TUPE transfer.

The Employment Tribunal at Southampton found that the claimant was assigned to the UK business, but dismissed his claim that the dismissal was automatically unfair under regulation 7(1). It held that he had not proved that the transfer, or a reason connected with it, was the sole or principal reason for dismissal. It also dismissed consequential claims for holiday pay and expenses.

The claimant appealed. The central issue was whether the Employment Judge had wrongly placed the burden of proving the prohibited reason on the claimant, rather than requiring the respondent to establish the reason for dismissal once the claimant had adduced some supporting evidence.

1. Appeal allowed and remitted. The Employment Judge erred in placing on the claimant the burden of proving, on the balance of probabilities, that the transfer or a connected reason was the sole or principal reason for dismissal. The applicable approach was that in Kuzel v Roche Products Ltd [2008] IRLR 530.

2. The claimant had to produce some evidence supporting his positive case. Once that threshold was met, the respondent had to show the actual reason or principal reason for dismissal and that it was not the prohibited reason under regulation 7(1) of the Transfer of Undertakings (Protection of Employment) Regulations 2006, or establish a permissible ETO reason. The Employment Judge's language at paragraphs 55, 67 and 86 showed that he had imposed the higher, incorrect burden on the claimant. That error was decisive.

3. The absence of evidence from the administrator who made the dismissal decision did not itself impose an obligation on the claimant to call that witness. The Employment Judge had merely made a neutral observation about an evidential gap. The court also rejected the submission that the evidence compelled a finding for the claimant. These cases are fact-sensitive, and comparisons with Spaceright Europe Ltd v Baillavoine [2012] ICR 520 could not determine the result.

4. The Employment Judge had not misunderstood the principle in Hynd v Armstrong [2007] IRLR 338 that a relevant ETO reason must be that of the transferor rather than the transferee. Nor was the original decision perverse.

5. The case was remitted to the same Employment Judge to reconsider the claims according to law. Applying Sinclair Roche & Temperley v Heard [2004] IRLR 763, there was no compelling reason for a fresh tribunal: the decision was not wholly flawed, no further evidence was said to be necessary, and rehearing the evidence would be disproportionate.

• Employment Appeal Tribunal: Appeal allowed on the burden-of-proof ground only. The claims were remitted to the same Employment Judge for reconsideration.
• Employment Tribunal, Southampton: On 12 March 2013, the Employment Judge dismissed the claimant's regulation 7 TUPE claim and consequential claims for holiday pay and expenses.