The case of Abellio London Ltd v Musse & Ors has added force to previous case law in stating that in a transfer involving TUPE, an incoming employer planning to move inherited employees to another location risks such a move as being an ‘automatically unfair’ dismissal.
Employers therefore need to exercise caution in considering relocating inherited staff In both cases, employees successfully claimed constructive (unfair) dismissal when they resigned in response to a change of work place.
In a TUPE situation, employees have two different routes to claim constructive dismissal.
- Regulation 4(9) of TUPE states that a resignation by an employee will be a dismissal where there is a “substantial change in working conditions to [their] material detriment”.
- Regulation 4(11) which refers to the existing right for an employee to claim constructive dismissal in the event of a repudiatory breach of contract by an employer
The case of Abellio stated relocation alone did not constitute an ETO reason which is a possible defence under TUPE where an employer makes changes to terms and conditions. In this case, the claimants worked as bus drivers for CentreWest from its Westbourne park depot. The location suited the drivers’ domestic circumstances. The route was then transferred to Abellio who operated from a depot in Battersea. The claimants were opposed to the new location, which would entail between 1 and 2 hours additional travel per day. Both resigned.
Their resignation was found to fall under both Regulations 4(9) and 4(11) of TUPE as the change was both a substantial change to the employees’ working conditions to their material detriment and a repudiatory breach of contract, as the mobility clause in their contract did not extend to the new location.
Of wider significance is the conclusion that the dismissal was automatically unfair as a result of TUPE. The result is that all dismissals of this kind are likely to be unfair.
So what are the implications for employers?
The Government has reacted to this. In view of the heavy burden on employers, imposed by case law in this area, the Government has initiated steps towards a reform by publishing a call for evidence, which is to be shortly followed by formal consultation. It will be interesting to see what recommendations are made following this on the effectiveness of TUPE.
Until these principles are revisited in subsequent case law, or the outcome of the consultation initiates a reform in this area, employers risk claims against them for unfair dismissal where an workforce inherited by TUPE transfer are asked to relocate.
For the moment, where any change of location can not be considered a ‘reasonable’, employers should be careful that the terms and conditions and the scope of mobility clauses within employment contracts are wide enough to deal with these issues.
Where there is no provision in employment contracts for such a move, there are a number of different ways to deal with this issue. There is no one right or wrong approach. Depending on the circumstances, employers may need to consider taking advice regarding dismissing employees and re-engaging them on a different contract. However, in most circumstances we have advised clients that a post transfer change in location can justify redundancies thereby avoiding the effect of the Abellio case.