Legal update - TUPE: does a location change mean employees can bring constructive and automatically unfair dismissal claims?

30 September 2014

There has been real anxiety amongst employers (particularly outsourced service providers) in recent years regarding the ability of employees in a TUPE transfer to bring constructive and automatically unfair dismissal claims based on a change in their working location.  However, the recent case of Cetinsoy & ors v London United Busways Limited illustrates that even under the law previously in force prior to the amendments to TUPE brought into force from 31 January 2014, it did not necessarily follow that a location change in the context of a TUPE transfer meant that the affected employees could establish constructive and automatically unfair dismissal. 

In Cetinsoy the four claimants were employed as bus drivers for CentreWest. They were based at the Westbourne Park depot and drove on the number 10 route.  The running of the number 10 service transferred to London United Busways (LUB).  This was a TUPE transfer. It meant the claimants could no longer be based at Westbourne Park.  Instead, they were required to transfer to a new depot, at Stamford Brook, three and a half miles away.  Two refused to do so and immediately resigned.  The other two resigned about two months later.  They all brought unfair dismissal claims against London United, claiming to have been constructively dismissed on normal contract law principles, as well as the specific provision in TUPE which provides that the resignation of an employee in response to a substantial change to their working conditions to their material detriment amounts to a dismissal.

The claimants’ employment contracts provided that Westbourne Park was their base.  There was a mobility clause allowing a change of location to any of CentreWest’s locations listed in in the Contracts of Employment folder, which did not include Stamford Brook.  As such, LUB’s requirement for them to relocate there was a breach of contract.  However, was it a fundamental (repudiatory) breach of contract that entitled the claimants to resign and treat themselves as constructively dismissed?  If not, was it in any event a substantial change to their working conditions to their material detriment?  The employment tribunal answered both questions in the negative and its judgment has been upheld by the EAT on appeal. 

The EAT noted that these issues were inter-linked.  The claimants claimed that the relocation requirement was a fundamental breach, and also a substantial change in their working conditions.  If the relevant change in their working conditions was not substantial, inevitably it could not be a fundamental breach of contract.   Whilst the EAT was not in agreement with all of the reasoning contained in the tribunal’s judgment, it upheld the central conclusion of the tribunal that in the particular circumstances and facts of this case, the relocation requirement did not amount to a substantial change in the claimants’ working conditions.  The EAT emphasised that this was a question of factual assessment for the tribunal.  Its judgment could only be overturned on appeal if its factual assessment was one that simply was not open to it on the facts.  Therefore the bar for a successful appeal was set high. 

In his judgment, the President of the EAT pointed out that the two lay members who heard the case with him were strongly of the view that the relocation requirement had not been a substantial change in the claimants’ working conditions.  They approved the tribunal’s assessment that in the context of travel within London, and employment terms which allowed relocation to several of CentreWest’s depots that were further away, three and a half miles is not that great. Interestingly, it seems the evidence at tribunal indicated that it increased the commuting time of all the claimants, in two cases by an average of thirty minutes each way, so on average by one hour per day.  In a previous bus drivers’ case also involving the relocation of bus drivers from Westbourne Park, identical contract terms, and given by Mr Justice Langstaff, President of the EAT, the outcome had been different. But in that case the relocation had been around six miles or so, to Battersea. 

This demonstrates that cases like this are highly fact sensitive.   It does not inevitably follow in a TUPE transfer that a relocation requirement in breach of contract will be a substantial change in working conditions or fundamental breach of contract entitling employees to bring claims.  Further, the changes to TUPE that came into force on 31 January 2014, which were intended to address the problem that dismissals resulting from a requirement to relocate were automatically unfair, mean that employers now have an additional argument at their disposal in defending such claims relating to TUPE transfers.  

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