In London Metropolitan University -v- Sackur and others (a case brought by NATFHE, now UCU), the Employment Appeal Tribunal (EAT) has confirmed that an ETO defence is only available to employers who have reduced the numbers of their workforce, or made changes to the functions of relevant employees.
What were the basic facts?
The London Guildhall University (LGU) and the University of North London (UNL) merged on 1 August 2002 to form the London Metropolitan University, following a TUPE transfer.
In negotiations leading up to the transfer, unions and staff were led to believe that the former LGU contracts would be adopted for all academic staff as the “default position”.
Within a few months of the transfer, the university turned that default position on its head and said that academic staff should revert to, or be placed on, UNL contracts.
Discussions between the parties eventually broke down in August 2004, after which the human resources department sent out a letter, indicating that, if staff continued to work after 1 September 2004, they would be deemed to have accepted the preferred UNL type contract. This followed an earlier letter in April in which the university gave notice of its intention to move staff onto the new contracts.
A number of staff lodged claims of unfair dismissal. The university said the dismissals were for an ETO reason entailing changes in the workforce of LGU, or alternatively, that they were for some other substantial reason and were not unfair.
What did the tribunal decide?
The tribunal found in favour of the claimants, concluding that their dismissal was for a reason relating to the transfer of UNL to LGU.
Referring to the case of Berriman -v- Delabole Slate Limited (1986, ICR 546), the tribunal said that the sole reason for the dismissals was to harmonise contracts, not to reduce numbers of staff, and was not therefore an ETO reason.
The tribunal had to infer from the evidence (because it was not clear from the minutes of meetings) that the decision to dismiss was taken shortly after the transfer, although the intention to do so was not communicated to staff until at least 18 months later, in April 2004.
What did the EAT decide?
The EAT agreed with the tribunal. It said that although the further away a transfer is from a dismissal, the less likely it is that it will be found to be connected to it or related to it, this was always a matter of fact for a tribunal to decide.
In this case, the tribunal “knew exactly what it was to determine: whether there was a connection; and if the connection was the principal reason between the dismissal and the transfer. The tribunal held that the reason was harmonisation.”
The tribunal did not find that the numbers of employees in the workforce had changed, nor that their functions had changed in a way envisaged by Berriman, which meant that the tribunal had correctly applied the law.
The EAT confirmed that an ETO defence is available only where employers have made changes in the workforce as a result of a reduction in the numbers (Berriman), or changes to the functions of relevant employees (Crawford -v- Swinton Insurance Brokers Ltd, 1990, IRLR 42).
It confirmed that Berriman remained good law and had not been adjusted or made significantly more flexible by Crawford. Although there was an organisational reason on the part of the university behind its demand for a change in the terms and conditions so that they could be harmonized, these were still changes in terms and conditions.
Comment
It is difficult to see how the University can challenge the argument that Berriman is good law as Parliament could have effected this change in the 2006 TUPE regulations, but did not do so.