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Dismissals with offer of franchises was ETO reason

In Meter U Ltd v Ackroyd and ors the EAT held that where, after a TUPE transfer, transferring employees were dismissed and replaced with limited company franchisees, the transferee had established an economic, technical or organisational (ETO) reason entailing changes in the workforce so the dismissals were potentially fair. The term ‘workforce’, does not include individuals providing their services through sub-contracted limited franchise companies, so using such franchisees to provide the services, and not the transferee’s own employees, did involve changes in the workforce and it would be for a tribunal to decide whether the ETO reason was fair.

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