TUPE & Moving Place of Work

TUPE: ‘automatic unfair dismissal’ where employees refused to move to new workplace

Following a TUPE transfer (under the old TUPE 2006 Regulations), where the new contractor (transferee) dismisses an employee on the grounds of ‘redundancy’ because they refuse to move to the new workplace, this will be an ‘automatic unfair dismissal’, the EAT has held in NSL v Besagni.

Brent Council decided to outsource its parking enforcement and related services. The two transferee companies were based in Croydon and Lancing (Sussex) respectively, and intended to carry out the services from these locations. The transferees gave the incoming employees the opportunity to move to the new workplace but the employees were not prepared to do so and were dismissed on the grounds of redundancy.

The employees brought claims of ‘automatic unfair dismissal’ before the employment tribunal and were successful. The Employment Judge considered the TUPE 2006 Regulations, which provide that where there is a dismissal for ‘an economic, technical or organisational reason entailing changes in the workforce’ the dismissal of an employee shall not be unfair. However, the Employment Judge decided that whilst there had been an economic and organisational reason for wanting the employees to move, the proposed move itself i.e. change of workplace, was not a ‘change in the workforce’ as this only related to changes in the actual numbers of employees or their functions. Simply requiring employees to move from one location to another did not fit this definition as the numbers of employees and their functions would stay the same.

The EAT agreed with the Employment Judge and dismissed the transferees’ appeal, holding that “dismissals of employees by reason of or connected with a transfer of an undertaking for refusing to change the location of their workplace are not dismissals which entail changes in the workforce within the meaning of the TUPE [2006] Regulations”. Accordingly, the dismissals were ‘automatically unfair’.

For a long time a number of transferees (often supported by the advice of their employment lawyers) had taken the risk of dismissing any in-coming employees on the grounds of ‘redundancy’ where they refused to change location and hoping that no claims of unfair dismissal would be brought. Luckily, they managed to get away with this as the area was relatively untested and there was very little litigation in this field. In fact, as far as we are aware, this is the first time that the point has been specifically dealt with at appeal level.

Fortunately, for employers at least, the point is now academic and they will not have worry about the effects of the EAT’s judgment. This is because the new TUPE 2014 Regulations specifically provide that ‘changes in the workforce’ include a change to the place where employees are employed. Therefore, a transferee would be able to dismiss, on the grounds of redundancy, an in-coming employee who refuses to move to a new location and be free to argue that the dismissal was fair. This is certainly music to the ears of employers and a big relief.

http://www.bailii.org/uk/cases/UKEAT/2014/0397_13_1605.html