Changing Terms on a TUPE transfer and automatically unfair dismissal
The Employment Appeal Tribunal confirms communication of an intention to change the terms of transferring employees amounts to automatically unfair dismissal.
The Claimants were bus drivers working in North West London. The business in which they worked was sold to another operator based in Battersea, a process which involved the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The new operator informed the drivers that, following the transfer of the business to it, they would be required to be based in Battersea going forward, not North West London as they were at the time. The drivers resigned claiming they had all been constructively dismissed as they could not be required to work at Battersea under their contracts. The Tribunal upheld the claims. The EAT agreed, finding that a transferee employer confirming an intention to impose a change in terms would be acting in breach of contract. The employees had been constructively dismissed and, as this was connected with a TUPE transfer, the dismissals were automatically unfair.
This decision makes it clear that if a transferee employer communicates an intention to impose changes to the terms and conditions of staff transferring under TUPE, it will do so at some considerable risk of claims of automatically unfair dismissal from the staff concerned.
Great care should therefore be taken to ensure that employers who are taking on staff in a TUPE transfer situation do not communicate anything which suggests an intention to unilaterally change terms of employment. The case underscores the extent of protection which TUPE gives employees in these circumstances, making changes difficult to make.
Where the change required involves a new location of work then the correct approach would be to approach it as a redundancy exercise at the transferring employees’ current workplace offering reengagement at the new location, if appropriate. Liability would in those circumstances (assuming proper consultation has first taken place) be limited to redundancy payments rather than the much more onerous unfair dismissal compensatory award currently running at a maximum of just under £70,000.
For further information or to discuss the issues raised, please contact David Widdowson +44 (0)20 3051 5711.