An employee who objected to a TUPE transfer involving a detrimental change in his working...
Objection to TUPE transfer
London United Busways Ltd v De Marchi
An employee who objected to a TUPE transfer involving a detrimental change in his working conditions was dismissed by the transferor.
Background
Mr De Marchi was a bus driver whose route operated out of a garage 15 minutes from his home. His employer, London United Busways (LUB), lost the contract for this route to Abellio London (AL), meaning his employment was set to transfer to AL (the transferee) under TUPE.
When Mr De Marchi discovered that this meant one hour’s travelling time to work instead of 15 minutes, he objected to being transferred and asked to be made redundant. This was rejected by LUB (the transferor). He was offered three options: transfer to AL under TUPE, remain with LUB on amended terms and conditions (including a longer maximum duty time), or resign. Mr De Marchi didn’t agree to the amended terms, continued to object to the transfer, and his employment with LUB ended in November 2019. He brought claims for unfair dismissal and TUPE-related claims – but these depended on establishing how his employment had been terminated. This involved a preliminary tribunal hearing where the tribunal held that he’d been dismissed by LUB as his objection to the transfer prevented his employment transferring to AL. LUB appealed.
EAT decision
The appeal was dismissed, albeit for different reasons from those of the tribunal.
The EAT considered a tricky and far from straightforward question of statutory interpretation: the interplay between TUPE, reg. 4(7) (the right to object to a transfer) and TUPE, reg. 4(9) (the right to resign when there is a substantial change in working conditions).
The EAT’s reasoning was as follows:
- If a relevant transfer involves, or would involve, a substantial change in working conditions to the material detriment of a person whose contract of employment is, or would be transferred, reg 4(9) entitles, but does not oblige, that person to treat the contract as having been terminated.
- If the employee wishes to exercise this right, he or she will be treated as having been dismissed by the employer.
- Dependent on the circumstances, the employer can be either the transferor or the transferee (this is depends on whether the date of termination pre- or post-dates the relevant transfer).
- Where the employee objects to becoming employed by the transferee under reg 4(7) and if reg 4(9) applies, the effect of that objection is to prevent the transfer of their contract to the transferee.
- In these circumstances, despite the employee’s decision not to terminate the contract himself under reg 4(9), reg 4(8) operates to terminate the contract with the transferor.
- The transferor is therefore the entity the employee is treated as having been dismissed by. Any remedies which can be claimed lie with the transferor and the employee has no remedy against the transferee.
Comment
This is a useful reminder of the obligation on a transferor to take more than just a passing interest in the measures being proposed by the transferee and, if necessary, do what they can to resolve any dispute, otherwise the employee could object to the transfer and the claim would be against the transferor. All too often the view of the transferor is that this will become someone else’s problem!