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Change of work location under TUPE transfer can give rise to automatic unfair dismissal, tribunal rules

A movement of workers to another location as a result of a change in employer is a "substantial change" in working conditions which can give rise to successful claims for automatic unfair dismissal, an employment tribunal has ruled.08 Mar 2012

In its decision, the Employment Appeal Tribunal said that five bus drivers who were transferred to a depot that would require up to two hours' extra travel each day could claim they were dismissed unfairly under rules designed to protect workers when their contracts are transferred to another employer.

The drivers resigned when their employment with CentreWest, which operated the 414 bus route from its depot in the Westbourne Park area of London, was transferred to Abellio, which intended to run the service from its existing depot in Battersea. This resulted in between one and two additional hours extra travelling per day for each of the affected employees.

The rights of employees are protected under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) when their company is taken over by a new owner or the work that they provide is outsourced, brought back in house or there is a change of service provider. Under TUPE employees may treat an employment contract as terminated when a transfer which is caught by the regulations results in a "substantial change in working conditions" to their "material detriment".

The regulations recognise that in some cases a clause in an employment contract cannot be implemented after the transfer with "precisely the same benefits and obligations" as they had previously, Mr Justice Langstaff said. However, in those cases "equivalent" benefits and obligations can be substituted "so long as neither the benefit nor burden is increased".

The judge said that the Westbourne Park depot suited the "particular family circumstances" of the affected employees. Although the six mile move might not have appeared substantial in a more rural or suburban setting, "bearing in mind the travel conditions involved" it amounted to a substantial change. With regards to the second limb of the test, it could be shown that the change was to the employees' detriment "simply by asking whether the change was to the employee's advantage, to which the response would have to be plainly not".

"To come to a conclusion that an extension of the working day of around two hours, taking both travel to and from work into account, was material is not in our view a conclusion that [the original Tribunal] was disentitled to reach... [T]ravelling at varying hours of the day, often at inconvenient times of morning or night on shift work, when public transport may not be easy... is entirely appropriate to be regarded as a significant and material change to the detriment of the employee," he said.

He added that the reference in the regulations to "working conditions" extended beyond "purely contractual underpinnings" to the actual circumstances in which work is performed. However, he added that although the original contracts with CentreWest contained a mobility clause stating that the drivers could be "required to work at any of the Company's work locations", Abellio would have been in breach of contract even if the move had not been considered a substantial change in working conditions under TUPE.

Because the original mobility clause made specific reference to CentreWest's specific "work locations", this could not be extended to cover Abellio's Battersea depot at the time of the transfer, the judge said. This repudiatory breach of contract meant that the employees' resignations were constructive dismissals, meaning that they were effectively forced to resign because of the company's actions.

"If the employer was requiring the employees to work at a place at which the contract did not provide that they could be told to work, then there was a breach, and the fact that matters might have been otherwise is no different from the fact that in respect of any breach of contract by an employer the employer might have conducted himself differently had he chosen to do so," he said.

It followed that these dismissals were automatically unfair because they came about as a result of the TUPE transfer, he added.

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