The EAT Decision in Secretary of State for Business and Trade v Sahonta

In Secretary of State for Business and Trade v Sahonta [2025] EAT 166, the EAT considered how to ascertain the date of a relevant transfer and whether regulation 8(7) Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE Regulations 2006) applied when a provisional liquidator had been appointed.

When a transferee is in a 'terminal insolvency' situation, regulation 8(7) operates to disapply the automatic transfer of employment contracts and protection from dismissal under regulations 4 and 7 TUPE Regulations 2006 respectively.

The EAT held as follows.

• Under case law, a relevant transfer takes place on the date on which the responsibility as employer for carrying on the transferred business passes from the transferor to the transferee. Determining this date is a fact sensitive exercise, and a range of factors should be considered. In this case, the employment tribunal had not erred in deciding that the transfer took place on 21 March 2023.    
• In the circumstances of this case, the appointment of a 'provisional liquidator' satisfied the regulation 8(7) requirement that, for the regulation to apply, the insolvency proceedings must be 'under the supervision of an insolvency practitioner' (regulation 2(1) TUPE Regulations 2006, referring to s 388(1) Insolvency Act 1986). The other requirements under regulation 8(7) were also met and so the tribunal had not erred in deciding that it applied to the transfer in question.

For more on the TUPE Regulations 2006, see TUPE.

For more on the impact of insolvency on the transfer of employees under TUPE, see TUPE, Q&A here.

First published on the Employment News Service on 21 November 2025

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