Case law: New employer may be able to dismiss employees transferring under TUPE if their place of work changes

Employers taking on employees under the TUPE rules could dismiss them if their existing terms of employment require them to work in one location, but the new employer requires them to work from another location where the local terms of employment are quite different - but the employees refuse to agree to those terms - according to a recent ruling.

An employee worked for a company providing accounting services to a client. His contract said he was to work in Leeds or Wakefield. The client proposed to transfer its work to a new service provider in the Philippines.

It was common ground that the TUPE rules applied. These rules are designed to protect employees in certain circumstances – by preserving their jobs and their terms and conditions of employment - when a business or undertaking they work for is transferred from their current employer to a new one.

The employee failed to get another job with his old employer in the UK. He therefore argued that the TUPE rules gave him the right to transfer to the new employer in the Philippines – but on the same terms of employment he enjoyed in the UK, including pay. If he was right he would earn almost ten times the salary of his Philippine co-workers.

His new employer argued that his right to transfer could not be on the same terms because his UK terms said his places of work were either Leeds or Wakefield. The terms would therefore have to be varied to refer to a different place of work, and this required the agreement of both parties. It said it was prepared to agree to that variation but only if the employee also agreed to accept the local terms and conditions of employment in the Philippines, including lower pay.

The employee would not accept those local terms so the employer dismissed him. It paid him the statutory redundancy payment, payment in lieu of notice and accrued holiday pay.

The employee claimed unfair dismissal, arguing that the employer had to agree to a variation of his place of work in the circumstances. He also claimed that there had not been a genuine redundancy because the requirement to carry out the work had not ceased.

The Employment Appeal Tribunal ruled that the employer had to agree expressly to a change of location in the employee's terms of employment, and it had not. The TUPE rules did not entitle the employee to vary his contract unilaterally so as to change his place of work.

It also ruled that there was a redundancy situation, as the requirement for the relevant work to be carried out at the employee's place of work in the UK had ceased.

Operative date

• Now

Recommendation

• Employers taking on employees under the TUPE rules may be able to dismiss them if the employees' existing terms of employment require them to work in one location, but the new employer requires them to work from another location where the local terms of employment are quite different - and the employee refuses to agree to those terms.

Case ref: Xerox Business Services Philippines Inc Ltd v Zeb UKEAT/0121/16/DM

Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.