Prior to being amended in January 2014, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) protected employees against unfair dismissal if the main reason was because of the transfer or for a reason connected to the transfer that was not an ETO reason “entailing changes in the workforce”. In NSL Ltd v Besagni and ors, the Employment Appeal Tribunal (EAT) held that a change in job location following a transfer did not constitute a “change in the workforce”.
The claimants all worked in the parking enforcement department of the London Borough of Barnet. The Council decided to outsource most of its parking operations and at the end of 2011, awarded the contract to NSL. It announced that it would transfer some back office functions to its offices in Croydon and others to the offices of its subcontractor, RRD, in Lancing, West Sussex.
As the claimants were not prepared to move to either Croydon or Lancing because of the distances involved, they were dismissed on 31 May 2012. They claimed automatically unfair dismissal under regulation 7 of TUPE.
Prior to the amendments in January 2014, regulation 7 stated that an employee was automatically unfairly dismissed if the sole or principal reason for the dismissal was because of the transfer or for a reason connected to the transfer that was not an economic, technical or organisational (ETO) reason entailing changes in the workforce.
The tribunal judge held that although NSL could demonstrate both an economic and organisational reason for the changes connected with the transfer, it could not show that it entailed “changes in the workforce” as required by the decision in Berriman v Delabole Slate Ltd.
The Court of Appeal made clear in Berriman that employers have to show “changes in the number of the workforce or possibly changes in the job descriptions of the constituent elements of the workforce, or possibly changes in the job descriptions of the constituent elements of the workforce, which, although involving no overall reduction in numbers, involves a change in the individual employees which together make up the workforce.”
As the dismissals of transferred employees for refusing to work in a different workplace following a transfer of an undertaking were not dismissals which entailed a "change in the workforce”, the employment judge concluded that they were automatically unfair.
The EAT dismissed the appeal. It held that although “changes in numbers of employees or in their duties are not the only changes which may constitute ‘changes in the workforce’” the definition did not extend so far as to include dismissals for refusing to change the location of the employees’ workplace. It said that a workforce is made up of workers, and “’workforce’ is not ‘workplace’”.
It concluded therefore that dismissals of employees by reason of, or connected with, a transfer of an undertaking for refusing to change the location of their workplace did not constitute dismissals for a reason entailing changes in the workforce within the meaning of regulation 7.
This is an important point of principle but this decision only applies if the transfer, the dismissal or notice of dismissal were before 31 January 2014. For more recent transfers or dismissals, the law has been amended by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014.
Under the amended regulations changes in the location of the workforce following a transfer are expressly included within the scope of an ETO reason entailing changes in the workforce. In addition dismissals are only automatically unfair if the sole or principal reason for dismissal is the transfer itself. Dismissals for ETO reasons connected to the transfer are no longer automatically unfair.