The Transfer of Undertakings (Protection of Employment) (TUPE) Regulations provide that employees that are dismissed because of the transfer, or for a reason connected to the transfer that is not an "economic, technical or organisational reason" involving "changes in the workforce", are automatically unfairly dismissed. The EAT judge found that the original employment tribunal did not make a mistake when it found that although the changes in this case took place for "economic and organisational" reasons, they did not involve "changes in the workforce" for the purposes of this exemption.
Six former employees of the London Borough of Barnet claimed that they had been unfairly dismissed, rather than made redundant, because they refused to move workplace from Barnet to either Croydon or Lansing, West Sussex after their work in the authority's parking enforcement department was outsourced. The employment tribunal judge upheld their claims, finding that "changes in the workforce" within the meaning of the unamended TUPE Regulations referred to changes in the overall numbers or functions of the workforce, rather than a change in location.
TUPE protects the rights of employees whose employers are taken over by new owners; or where work is outsourced, brought back in-house or there is a service provider change (SPC). Changes to the regulations which took effect last month widened the meaning of "changes in the workforce" to explicitly include changes in location. However, the dismissals in this case took place on 31 May 2012, when the old rules applied.
EAT judge Mrs Justice Slade that the wording of this change was "indicative of an amplification of the meaning of 'changes in the workforce'"; a position that was backed up by pre-amendment consultation which stated that the government wished to align the term with the definition of redundancy in the Employment Rights Act (ERA).
"In my judgment the fact that many transfers of undertakings, including service provision changes, will involve a change in the location of where employees work, negates rather than supports an interpretation of 'entailing changes in the workforce' which includes a change in the location of the workforce," the EAT judge said.
"If that interpretation were adopted, employees dismissed for refusing to locate on a transfer of an undertaking would be deprived of the protection of a finding of 'automatic' unfair dismissal. In my judgment, in the absence of clear language as that now introduced by amendment, such an interpretation would go against the grain of TUPE," she said.
It was also relevant that the previous version of the regulations did not explicitly exclude dismissals for redundancy within the meaning of the ERA from the scope of the automatic unfair dismissal provision, she said.
"The meaning of [the relevant section of the ERA] includes in the definition of dismissal for redundancy the concept of dismissal due to a cessation of business in a particular place or a reduction of requirements for employees to carry out work in a particular place," she said. "This specific reference is absent from the unamended [TUPE Regulations]."
"In my judgment on the ordinary language of the unamended [TUPE Regulations], the concept of change in location of the employees' workplace is not included in 'changes in the workforce'," she said.