4th November 2014

TUPE – Relocation, Relocation…

The Transfer of Undertakings Regulations 2006 (“TUPE”) operate to protect the rights of employees in situations where businesses or contracts change hands.  The general rule is that where there is a change of employer, the employees transfer to the new employer on the same terms and conditions of employment as they enjoyed with the old employer.

Where a TUPE transfer involves or would involve a substantial change in working conditions to the material detriment of any employee who would transfer, such an employee can treat the contract as having been terminated and the employee shall be treated as having been dismissed by the employer.  This is regulation 4(9) of TUPE.  This regulation is not to be confused with regulation 4(11) which provides that an employee can resign in response to any repudiatory/fundamental breach of contract by the employer (and then claim constructive dismissal).  The two concepts are similar with the distinction being that a claim under regulation 4(9) does not require any breach of contract.

In Cetinsoy and ors v London United Busways Ltd, the EAT held that a change of base for bus drivers was neither a substantial change in working conditions nor a fundamental breach of contract for constructive dismissal purposes.  Following a TUPE transfer, a bus depot was no longer available and the transferring employees were required to work at another depot some 3.5 miles from where they worked pre-transfer.  The employment contracts contained mobility clauses which allowed the employer to vary the location at which the employees worked (with a number of locations listed in the contract).  The new location at which the drivers had to work post-transfer was not included in the contracts because of course this was a location operated by the new employer and not the old employer (the employment contracts having originally been with the old employer).

The EAT observed that the substantial change and fundamental breach of contract issues were interlinked in that they both related solely to the change in workplace location.  The EAT upheld the employment tribunal’s original finding that there was no substantial change in working conditions and no fundamental breach of contract.  The Judge made a factual assessment of travel within London and found that the drivers would face no more than 30 minutes travel time as a result of the change.  This was not substantial, particularly bearing in mind that the other locations at which the employees could have been required to work under the contract were further away than 3.5 miles.

TUPE cases involving changes in location invariably turn on their facts.  The   Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 came into force on 31 January this year.  Among the changes introduced by the 2014 regulations was the inclusion of changes in workplace location to the types of contract changes permitted by TUPE (economic, technical or organisational changes – “ETO”).  Notwithstanding that a change in location could be an ETO, it is still open for employees to argue that a change in location is a substantial change and/or a fundamental breach of contract.

Jack Boyle
Senior Solicitor – Employment Law
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