The Claimants were employed by a bakery firm Morton. A conditional business transfer agreement was entered into in respect of Morton on 3 March 2023. Morton could not pay its debts and stopped trading on that day. A creditor petitioned for a winding up order in respect of Morton, and a provisional liquidator was appointed on 7 March 2023. A winding up order was made on 31 March 2023. A new company, Phoenix, recommenced production on 21 March 2023. Employees of Morton sought payments from the national insurance fund. The Secretary of State refused their request as it considered that there had been a transfer of Morton’s undertaking to Phoenix, under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”). The Secretary of State argued that the transfer had happened prior to a winding up order being made in respect of Morton, with the result that Phoenix was responsible for employees of Morton, and payments were not due from the national insurance fund. The ET ruled that there had been no transfer and the Secretary of State appealed.

The EAST dismissed the appeal. (1) The ET did not err in law in its findings that the date of the relevant transfer of Morton under regulation 3 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 was 21 March 2023. Ascertaining the date on which responsibility as employer for carrying on the transferred business moved from the transferor to the transferee is a fact sensitive exercise, depending on all of the circumstances, and the date of the conditional business transfer agreement was not decisive. (2) The ET did not err in law when it found that regulation 8(7) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 applied, with the effect that transfer of contracts of employment and dismissal rights under regulations 4 and 7 were disapplied. By the date of the relevant transfer, a provisional liquidator had been appointed by the court following a petition brought by a creditor, leading to the liquidation of the transferor, and the conditions for regulation 8(7) to apply were met. The case was remitted to the ET to consider employee claims from the national insurance fund under the Employment Rights Act 1996.