www.workrep.co.uk

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• TUPE (2006) Regulations can not be avoided by way of invoking "substantial equivalence" arguments
• TUPE 2006 requires that a tribunal considers the impact of a change from the employee's point of view (as long as the employee's position is reasonable)
• Vague mobility clauses are not 'obvious' or acceptable to tribunals
• After the ECJ decision in Merckx and Neuhuys v Ford Motors Belgium the term "working conditions" should be construed widely and not only in reference to remuneration

The change was protected as a "TUPE transfer." The Transfer of Undertakings (Protection of Employment) Regulations 2006 were enacted in order to protect the rights of workers who were being transferred to different employers or premises. Generally this means that their terms and conditions of employment should remain the same. If they are not the same, and this non-equivalence is to the detriment of the employee, then the employee "may treat the contract of employment as having been terminated, and the employee shall be treated for any purpose as having been dismissed by the employer".(1)

This means that if an employer changes the employee's workplace to a location not included in the original work contract, or if the employee is transferred to other employers, and there is a substantial change of terms or conditions and, for whatever (reasonable) reason this is unattractive to the employee, then if the worker decides that he does not want to continue working, he will be treated as having been dismissed and not as having resigned voluntarily.

The employer tried to argue that although the original contract contained the words "at other locations within the trust," the mobility clause did not act to define the location geographically, but only to state what was 'obvious' with vague words, i.e. that the trust would only transfer the employee to locations which it owned. The Employment Appeal Tribunal (EAT) held that the words "within the trust" did in fact geographically define the contract to the location of the Community Health South London NHS Trust and that requiring her to work outside of this area was to extend her obligations beyond those contained in her contract.

This fact could not be defended with the concept of "substantial equivalence" (2)as it had been in Mitie Managed Services Ltd v French and others since this would be contrary to the purpose of TUPE 2006. The concept of "substantial equivalence" can be invoked when there is a practical difficulty in continuing the exact existing terms and conditions of employment. Here that would have allowed the Trust to transfer the employee without legally transferring her, thus avoiding the TUPE Regulations, and taking away the protection of the act from those it was designed to protect. "Substantial equivalence" could therefore not be invoked.

The EAT found that the case was therefore one of dismissal and remitted the case to an employment tribunal to decide as to redundancy payment entitlement and whether the dismissal was an unfair dismissal

Notes
1) The device of "substantial equivalence" cannot be used where it is possible to continue the contractual term without practical difficulty - thus the benefits and obligations of the parties must remain the same. It is only when there arise "practical impediments", and the clause cannot be implemented without exactly the same benefits and obligations, that equivalent benefits and obligations can be substituted as long as neither benefits nor obligations are enlarged or reduced. It also seems from the case that even if there are "practical impediments", the concept of "substantial equivalence" cannot be engaged where this would be the "antithesis of the purpose of Dir. 2001/23/EC and, thus of TUPE 2006." In this case where the employee's contractual obligations were limited to the geographical location of the PCT, although by nature the transfer to another location created an impractibility of the continuation of the precise contractual terms, to engage "substantial equivalence" would have been contrary to TUPE 2006 as this would have enlarged the set of obligations that the employee had already agreed to in the contract.

2) The Employment tribunal erred at law in its application of Reg. 4 (9) of TUPE 2006 when it imposed an objective determination of "material detriment." Rather, the tribunal must consider firstly "the impact of the proposed change from the employee's point of view" i.e. whether the employee felt the change to be detrimental and secondly whether this was a reasonable position for the employee to hold. The Employment Appeal Tribunal held that the employee had considered herself affected detrimentally and that this was a reasonable position on the facts that her childcare arrangements could potentially have been disrupted and that her journey to work had been altered albeit only lengthened materially by 2.5 miles in what was on average a 90 minute journey.

3) The Appeal Tribunal also quoted the decision of the European Court of Justice in Merckx and Neuhuys v Ford Motors Belgium SA [1996] IRLR 467 that the term "working conditions" could not be construed rigidly as applying only to such things as remuneration but must be understood widely and applied to the mere changing of workplace, although in that case it must be noted that the change of workplace indeed meant for the employees a move to a place where there would be a potential "adverse impact on commission."

The transcript of this case can be found (usually at the Bailli or Employment Appeals websites)  Here