TUPE: post-transfer changes to terms and conditions of employment
A recent EAT decision demonstrates the importance of evidencing reasons for post-TUPE changes to terms and conditions of employment, in order to successfully defend claims.
Post-transfer changes to terms and conditions
The Transfer of Undertakings (Protection of Employment) Regulations (TUPE) operate to protect the workforce where a business is sold or where the responsibility for providing a service transfers from one entity to another. In either of these scenarios, staff contracts automatically transfer from the outgoing to incoming employer. Changes to the terms and conditions of transferring employees are void if the sole or principal reason for the changes is the TUPE transfer. In addition, where the sole or principal reason for an employee's dismissal is the TUPE transfer, the dismissal will be automatically unfair, unless the change is for an "economic, technical or organisational" reason which entails changes in the workforce.
Facts of the case
In the case of Lewis v Dow Silicones UK Ltd, Mr Lewis was a power plant operations technician. His employment transferred to a new employer under TUPE. Following the transfer, Mr Lewis' new employer (the eventual respondent) sought to make changes to his terms and conditions of employment. In response, Mr Lewis resigned and claimed constructive dismissal. He claimed that his dismissal was automatically unfair because the sole or principal reason for the dismissal was the TUPE transfer.
This claim has had a complicated passage through the Tribunal system so far. This article focuses on learning points from the most recent EAT decision, which overturns the decision of the Tribunal before it. The Tribunal had found that the respondent had sought to change Mr Lewis' terms and conditions of employment for health and safety reasons and that this was an ETO reason. It found that Mr Lewis' dismissal was fair on this basis.
EAT decision
The EAT found that the Tribunal erred in its decision. Mr Lewis was unfairly dismissed because the sole or principal reason for his dismissal was the TUPE transfer. It was up to the respondent to establish the reason for dismissal. The respondent had neither pleaded that it wanted to change Mr Lewis' terms and conditions for health and safety reasons, nor had it submitted any evidence that indicated this to be so. As there was no evidence to support that the respondent had been motivated by health and safety concerns, the only possible outcome was that the sole or principal reason for Mr Lewis' constructive dismissal was the transfer.
The EAT has remitted the claim to a new Tribunal to determine remedy.
Learning points for employers
This decision acts as a reminder to employers of the importance of documenting and evidencing the sole and principle reason behind any changes to employment terms following a TUPE transfer. Employers should take proactive steps to document any changes and strategically consider pleadings in the event of litigation.