Dismissed for being 'too expensive' after TUPE transfer: unfair dismissal win
A director with 16 years' service was dismissed days after being told he was 'too expensive' and 'no longer needed'. The tribunal found the real reason was not misconduct but cost-cutting, and awarded £61,298.
1 min read · Last updated 18 May 2026
Case details
Key facts
- The claimant was employed by Chic Flower Design Limited following a TUPE transfer on 19 July 2019.
- The claimant was dismissed on 15 January 2020 with immediate effect.
- The respondent gave reasons of unauthorised leave, budget overspend, and retention of scrap metal proceeds.
- The tribunal found the real reason for dismissal was that the claimant was too expensive and no longer needed.
- The respondent failed to follow any disciplinary procedure or ACAS code.
- The claimant received scrap metal payments into his personal account and did not account for them before dismissal.
Timeline
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TUPE transfer
The business of Seasonal Transformations Ltd was sold to Chic Flower Design Ltd, and the claimant transferred as an employee.
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Claimant works from home
The claimant texted Ms Ettridge that he would work from home that week, taking Monday, Wednesday, and Friday as holiday.
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Scrap metal sale
The claimant and Matthew Saunders took scrap metal to a yard; £78 and £498.90 were paid into the claimant's personal account.
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Meeting between claimant and Mr Smith
Mr Smith and the claimant met; the tribunal found only general budget discussions occurred, not the alleged conduct issues.
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Dismissal
Mr Smith told the claimant he was 'too expensive' and 'no longer needed'; the claimant was required to leave immediately.
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Email setting out reasons
Mr Smith sent an email (received by claimant on 1 Feb) listing unauthorised leave, budget overspend, and scrap metal as reasons.
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Claim presented
The claimant presented his claim for unfair dismissal and other claims to the tribunal.
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Preliminary hearing
Employment Judge Allen ruled the claimant was an employee and the claim was in time.
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Chic enters liquidation
Chic Flower Design Ltd entered creditors' voluntary liquidation.
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Full merits hearing
The tribunal heard evidence over two days and found the dismissal unfair.
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Liability judgment
Reserved judgment on liability issued, finding unfair dismissal and setting remedy hearing.
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Remedy hearing
The tribunal heard remedy evidence and reserved judgment.
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Remedy judgment
Final remedy judgment issued, awarding total of £61,298.30.
The legal issue
The tribunal had to decide whether the claimant was unfairly dismissed and, if so, what compensation should be awarded, including whether any reduction should be made for contributory conduct or a Polkey deduction.
The outcome
The tribunal found that the claimant was unfairly dismissed. The real reason for dismissal was not misconduct but that the claimant was 'too expensive' and 'no longer needed' – a potentially fair reason (some other substantial reason) but handled unfairly.
Compensation breakdown:
- Basic award: £9,450.00
- Compensatory award: £26,836.69
- Polkey reduction (75%): applied to reflect chance of fair dismissal
- Contributory conduct reduction (25%): for failing to account for scrap metal proceeds
- ACAS uplift (25%): for failure to follow disciplinary procedure
- Total: £61,298.30
Lessons & takeaways
- Even if an employer believes there is a conduct issue, failing to follow a proper disciplinary process can make a dismissal unfair.
- A TUPE transfer does not give an employer a free pass to dismiss a transferred employee without a fair reason and procedure.
- If an employer tells an employee they are 'too expensive' and 'no longer needed', that is likely to be seen as the real reason for dismissal, not any alleged misconduct.
- Keeping scrap metal proceeds without accounting for them can be contributory conduct, reducing compensation even in an unfair dismissal case.
- An ACAS Code uplift of up to 25% can be applied where an employer fails to follow any disciplinary procedure at all.
When 'too expensive' becomes the real reason for dismissal
This case shows how important it is for employers to be honest about the real reason for dismissal. The claimant, a former director with 16 years' service, had transferred to Chic Flower Design Limited under TUPE. Just months later, he was told he was 'too expensive' and 'no longer needed' – and was required to leave immediately. The employer later tried to justify the dismissal by pointing to alleged misconduct: unauthorised leave, budget overspend, and retention of scrap metal proceeds. But the tribunal saw through this. It found that the real reason was that the claimant was simply too costly and no longer required.
What the employer could have done differently
If the employer genuinely believed the claimant had committed misconduct, it should have followed a proper disciplinary process. It did not. There was no investigation, no hearing, no right of appeal – a complete failure to follow the ACAS Code of Practice. Even if the real reason was 'some other substantial reason' (such as redundancy or reorganisation), the employer should have consulted with the claimant and considered alternatives. Instead, the tribunal found the dismissal was procedurally unfair.
Why this matters for similar claims
This case is a reminder that tribunals will look behind the stated reasons for dismissal to find the real reason. If an employer tells an employee they are 'too expensive', that is strong evidence that the real reason is not misconduct. It also shows that even where an employee has contributed to their own dismissal (here, by failing to account for scrap metal proceeds), compensation can still be substantial – especially when the employer has completely ignored fair procedures. The ACAS uplift of 25% added over £5,000 to the award, reflecting the seriousness of the procedural failure.
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