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Dismissal of football club employees not an ETO reason
In Kavanagh and others v Crystal Palace FC (2000) Limited and others, the EAT has held that a Tribunal was wrong to conclude that the dismissals of the employees by the club’s administrator before the business was sold, and which were clearly connected to the sale, were not automatically unfair because they were carried out for an ETO reason entailing changes in the workforce.
In one of the authorities on this issue, Spaceright Europe Limited v Baillavoine and another, the Court of Appeal has held that where an administrator’s reason for dismissal is to continue the business, this can be an ETO reason. However, if the reason for the dismissals is purely to accentuate the sale of the business, this cannot be an ETO reason. It was clear from the facts of this case that the administrator wanted to effectively put the club in “mothballs” during the close season in advance of a possible sale and so the only conclusion was that the employees had been dismissed in order to sell the business. Consequently there was no ETO reason and the dismissals were automatically unfair.
This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.
For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.
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