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TUPE: location change amounts to constructive dismissal

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The Law 

Under TUPE, any dismissal of an employee before or after a “relevant transfer” will be automatically unfair where the sole or principle reason for the dismissal is the transfer itself, or a reason connected with the transfer that is not an economic, technical or organisational reason entailing changes in the workforce (an “ETO”).

Regulation 4 (9), further provides that transferring employees may resign and deem themselves dismissed in the event of a substantial change in working conditions to their material detriment. In such situations, employees may treat such changes as a repudiatory breach of contract by the employer and claim constructive dismissal.

It has previously been established that a change of location is not by itself an ETO reason. For a change of location to qualify as an ETO it would have to be accompanied by a change in number or function of employees

Case Facts

The claimants were bus drivers who all worked a particular route in West London. On 17 September 2009, the claimants were informed in writing that the contract to run their route would be transferring to Abellio London Limited, and would be operated from an alternative depot six miles away. The claimants were not happy with the transfer of their employment to the new location, claiming that the additional travel time to and from work (alleged to have added up to 2 hours to the working day and involving a move from north to south of the river in London) was not reasonable. They therefore objected to the transfer and resigned.

The Decision

The EAT agreed with the Tribunal decision that the change in location was a substantial change to the employees’ working conditions to their material detriment. Whether or not there had been a substantial change in working conditions that was of “material detriment” was a question of fact, and it’s impact was to be considered from the employee’s point of view (confirming the decision in Tapere v South London and Maudsley NHS Trust2). In this case, the extension to the working day caused by the relocation was found to be material. Therefore the employees were entitled to resign and claim that they had been dismissed for the purposes of regulation 4(9) of TUPE. It was further held that it was irrelevant that the employee’s contracts contained a mobility clause; ‘working conditions’ in regulation 4(9) referred to an employee’s actual circumstances, not what they could be required to do under their contract.

Comment

The case confirms that a change in location will not be considered an ETO reason unless the change confirms a change in the number/function of employees. Further, claimants do not have a high threshold to get over in order to satisfy regulation 4 (9) because the tribunal must view “material detriment” from the employee’s perspective.

Companies inheriting employees under TUPE should ensure that they take care when effecting any post-transfer changes, and in particular should be mindful of the potential risks of automatic unfair dismissal claims and try and seek indemnity protection in the contractual arrangements with the transferor.

For further information please contact Alexandra Dean of Gepp & Sons on 01245 228141 or deana@gepp.co.uk

The above is not legal advice; it is intended to provide information of general interest about current legal issues.