In a recent case, London United Busways Ltd v De Marchi and another, the Employment Appeal Tribunal clarified that if an employee objects to a TUPE transfer due to a substantial change to their working conditions to their material detriment, they can be treated as dismissed, allowing them to bring a claim to an Employment Tribunal.

The purpose of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) is ultimately to protect employees’ rights when a business changes hands or there is a change in service provider. If TUPE applies, employees will transfer to the new provider on their existing terms and conditions.

Under TUPE, employees can object to the transfer of their employment if they do not want to transfer. If they object, their employment is deemed to be terminated on the transfer date, and they are not considered to be dismissed; it effectively operates as a resignation.

However, if there has been (or would be) a substantial change in working conditions to their material detriment, they can treat their employment as terminated and the employee is treated as having been dismissed, and therefore eligible to bring claims including claims of unfair dismissal and statutory redundancy pay.

Whilst employees are not required to explain why they are objecting to a transfer, employers faced with this scenario should seek to understand the reasons behind any objections. It may be that any substantial changes in working conditions could be mitigated. Separately, if a transferor is aware that proposed changes to working conditions are causing objection(s) and those changes cannot be avoided, the transferor should ensure that the commercial terms include appropriate warranties and indemnities to mitigate their liability.

Please contact us if you would like more information about the topics raised in this article or any other aspect of employment law at 029 2034 5511 or employment@berrysmith.com.