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Transferred from One Employer to Another? You Have Legal Rights!

Corporate takeovers, restructuring exercises and the like routinely result in workers being transferred between employers. However, as an Employment Appeal Tribunal (EAT) ruling showed, workers have a right to expect that such a move will not impact detrimentally on the terms and conditions of their ongoing employment.

The case concerned a power plant operations technician whose employment shifted from one company to another. His new employer introduced changes to standby and callout arrangements and extended his duties in relation to safety. Unhappy about those changes, he resigned and launched Employment Tribunal (ET) proceedings on the basis that they amounted to a fundamental breach of his employment contract and that he had been constructively unfairly dismissed.

In support of his claim, he pointed to Regulation 4(9) of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE), which provides that, where a TUPE transfer of employment involves a substantial change in working conditions to the material detriment of a worker, the individual concerned may treat their contract as having been terminated by dismissal. His complaint was, however, rejected by the ET.

In upholding his appeal against that outcome, the EAT ruled that it was open to the ET to find that, under his existing contractual terms, the new employer was entitled to introduce the changes. That finding was, however, irrelevant to the issue under Regulation 4(9) and the ET’s conclusion was thus based on a false premise.

The technician plainly regarded the changes as detrimental to his interests and the new responsibilities and obligations that they sought to impose on him plainly had the potential to impact on his domestic plans and arrangements. That was a reasonable position for him to adopt and the ET’s ruling that the changes were neither substantial nor detrimental was, on the evidence, perverse.

The EAT ruled that, by operation of Regulation 4(9), he was entitled to treat his contract of employment as terminated and was to be treated as having been dismissed. Other issues in the case – including the question of whether his dismissal was unfair – were sent back for determination by an ET. Subject to argument, the EAT was minded to remit the matter to a freshly constituted ET.

Published in
29 March 2021
Last Updated
21 April 2021