Changing Terms of Employment in a Transfer

27 June 2012

Worthingtons Solicitors provide legal advice on the law on change of service provisions and transfers of business which is constantly being interpreted by the Courts and Tribunals

Changing Terms of Employment in a Transfer

The Transfer of Undertakings (Protections of Employees) (Northern Ireland) Regulations 2006 and Service Provision Change (Protection of Employment) Regulation (NI) 2003 stipulates that dismissals are automatically unfair by reason of the transfer if there has been “a substantial change to the employees’ working conditions to their material detriment”.  Accordingly, in the event that a business is acquired and there is a substantial change to the working conditions in the employees’ contracts of employment this amounts to a dismissal which is automatically unfair.

A recent Employment Appeal Tribunal case considered what was a substantial change to an employee’s working conditions and therefore a material detriment under the contract in a transfer.

Five employees were employed as Bus Drivers for CentraWest, which ran the 414 bus route operating from its Westbourne Park Depot.  This location suited all the employees’ family circumstances and where they all lived.  The route was transferred to Abellio London whose intention was to operate this route from its own depot in Battersea.  

The transfer of the service from CentraWest to Abellio London was a relevant transfer under the TUPE regulations.  The employees each objected to Abellio London’s intention to move the location from which the route was to operate as it affected their travel and domestic arrangements.  The new location would mean between one and two hours extra travelling per day.  The five employees resigned and claimed constructive dismissal and automatically unfair dismissal under the TUPE Regulations.

The Employment Tribunal held that the new location and the intention to relocate them to this new location had been a substantial change to the employees’ working conditions which was to their material detriment under the Regulations.  The Tribunal also held that the move was additionally a repudiatory breach of their contract of employment.  

There was a mobility clause in their contracts of employment that transferred at the date of the acquisition however this did not extend to the Battersea location.  The Tribunal therefore held that the employees were also constructively dismissed for the purposes of the Regulations and that the dismissals were automatically unfair as being by reason of the transfer.

This was appealed to the Employment Appeal Tribunal which confirmed the decision. 

In the current economic climate change of service provisions and transfers of business are all too common and the law in relation to same is constantly being interpreted by the Courts and Tribunals. 

Businesses should always take professional legal advice in relation to any business acquisitions or change of services to ensure that they comply with the legislation.

Maxine Orr is head of the Employment department in Worthingtons Solicitors Belfast.

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