Wednesday 18 July 2012 by Jonathan Rayner

Employment contracts of solicitors made redundant when their employers go into administration should not automatically transfer to law firms acting for the administrators, the Employment Appeal Tribunal (EAT) ruled yesterday. The ruling on transfer of undertakings, protection of employment (TUPE) regulations, will free administrators to instruct their own legal advisers.

The appeal was brought by City firm SNR Denton, which was instructed in March 2010 by the administrators of the Jarvis Group of companies. A Jarvis solicitor, who lost her job on 31 March 2010, claimed that there had been a service provision change under TUPE because SNR Denton went on to carry out legal work she had previously been doing.

An employment tribunal agreed that there had been a service provision change and that consequently the solicitor's employment contract should have transferred to SNR Denton.

The EAT overturned this decision in the light of the reasoning in an earlier case (Hunter v McCarrick) that, for there to be a service provision change, the work must be carried out for the same client. The solicitor's work was carried out for her client, Jarvis, whereas SNR Denton's work was carried out for its client, the administrators.

The employment tribunal, it appeared, had treated Jarvis and the administrators as a single client.

SNR Denton employment partner Pauline McArdle said: 'This decision is of particular significance to administrators. Had the original decision been upheld it would have hampered the ability of administrators to instruct their own service providers. We are delighted with the outcome.'