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Change of workplace: not an ETO defence under TUPE


Dismissals of transferred employees for refusing to work in a different workplace following a TUPE transfer were not dismissals for an ETO reason entailing changes in the workforce.

Pursuant to Regulation 7(1) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) if the sole or principal reason for the dismissal for an employee of either the transferor or transferee was a reason connected with the transfer that was not an economic, technical or organisational (“ETO”) reason entailing changes in the workforce the dismissal is automatically unfair.

Regulation 7(1) TUPE was amended with effect from 31 January 2014 so that Regulation 7(3A) TUPE now provides that ‘changes to the workforce’ ‘includes a change to the place where employees are employed by the employer to carry on the business of the employer or to carry out work of a particular kind for the employer (and the reference to such a place has the same meaning as in section 139 of [the Employment Rights Act 1996]’. However, the amendment only applies where the TUPE transfer has taken place on or after 31 January 2014 and notice of termination of employment is given on 31 January 2014 (or, in the case of dismissal without notice, the dismissal takes effect on 31 January 2014).

In the conjoined appeals of RR Donnelly Global Document Solutions v. Besagni and others and NSL Ltd v. Besagni and others UKEAT/0397/13/JOJ; UKEAT/0398/13/JOJ the claimants, all UNISON members, had been employed in the parking enforcement and related services department of the London Borough of Barnet (“Barnet”). When the majority of Barnet’s parking operations were outsourced the contract was awarded to NSL Ltd (“NSL”) who intended to transfer the back office functions to its offices in Croydon. NSL sub-contracted the post room and payment processing operations to RR Donnelly Global Document Solutions (“RRD”) and, prior to the transfer, RRD indicated that it would move the payment processing services to its offices in Lancing, West Sussex.

The transfer of the undertaking, which amounted to a TUPE transfer, took place on 1 May 2012 and the claimants’ employment transferred to either NSL or RRD, depending in which operation they worked. All the claimants indicated they were not prepared to move to Croydon or Lancing and they were all dismissed on 31 May 2012 on grounds of redundancy. The reason for their dismissals, as found by the Employment Judge, was that they were not prepared to move to Croydon or Lancing. He went on to find that this was for a reason connected with the transfer and, although it was an economic and organisational reason, following Berriman v. Delabole Slate Ltd [1985] ICR 546 the relocations did not entail changes in the workforce since they did not involve a reduction in the numbers of or a change in the functions being performed by the relevant employees. Accordingly, the dismissals were automatically unfair.

At the Employment Appeal Tribunal Slade J dismissed the appeals by NSL and RRD. Slade J noted the absence of any definition of ‘entailing changes in the workforce’ in TUPE or the Council Directive 2001/23/EC and found that several factors were to be taken into account in determining their meaning: the ordinary meaning of the words taken in context, the domestic authorities on their meaning, the 2014 amendments to Regulation 7(1) TUPE, and whether their meaning was affected by European jurisprudence.

Slade J had regard to observations by Browne-Wilkinson in Berriman before concluding that a ‘workforce’ “is made up of workers, people. ‘Workforce’ is not ‘workplace’ or any other physical or abstract concept such as the way in which work is organised or where it takes place”.

Furthermore, Slade J held that not all dismissals for an ETO reason entailing changes in the workforce are dismissals for redundancy, noting that dismissals for redundancy within the meaning of s.139 Employment Rights Act 1996 had not been excluded from the scope of automatic unfair dismissal under Regulation 7(1) TUPE. The objective of Directive 2001/23/EC “was to provide for the protection of employees in the event of a change of employer, in particular to ensure that their rights are safeguarded” and the CJEU’s Judgment in Alemo-Herron v. Parkwood Leisure [2013] ICR 1116 “does not alter the earlier European jurisprudence on the mandatory nature of the obligations in the Acquired Rights Directive”. In the absence of clear language, which had since been introduced by the 2014 amendment to Regulation 7(1) TUPE, interpreting ‘entailing changes in the workforce’ to include a change in the location of the workforce would mean that employees dismissed for refusing to relocate following a TUPE transfer would be deprived of the protection of a finding of automatic unfair dismissal.

Slade J referred to the opinion expressed, obiter, in Meter-U Ltd v. Ackroyd [2012] ICR 834 that changes in the number of employees employed or in their duties are not the only changes which may constitute ‘changes in the workforce’ under Regulation 7(1) TUPE and stated that in order to fall within Regulation 7(2) TUPE the changes must be to the body or people constituting the workforce the changes could also include a requirement for additional skills or qualifications (even if the job remained the same).

Emma Smith represented the claimants at the Employment Tribunal and Employment Appeal Tribunal and was instructed at both stages by Shantha David of UNISON Legal Services.

Dismissals of transferred employees for refusing to work in a different workplace following a TUPE transfer were not dismissals for an ETO reason entailing changes in the workforce.

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