The Employment Appeal Tribunal (EAT) has held in Lewis v Dow Silicones UK Ltd that the reason, as found by the tribunal, for the transferee changing terms of employment was not pleaded or evidenced. This meant that it could not be the sole or principal reason for dismissal.
The claimant transferred to Dow Silicones UK Ltd (Dow) under TUPE. Subsequently Dow sought to introduce changes to his terms of employment. The claimant resigned and claimed constructive dismissal under Regulation 4(9) of TUPE, which provides that, if a transfer involves (or could involve) a substantial and detrimental change in working conditions, the employee may resign and treat the contract as terminated. Under TUPE, a dismissal (including a constructive dismissal in these circumstances) is automatically unfair where the sole or principal reason for the dismissal is the transfer.
At first instance the tribunal held that the changes to terms were not to the claimant's material detriment and so Regulation 4(9) could not apply. On appeal the EAT substituted a decision that there was a substantial change to his material detriment and so he was dismissed; it remitted the case back to the tribunal. The tribunal then held that the sole or principal reason for the changed terms was not the transfer but was to address pre-existing problems with health and safety which was an economic, technical or organisational reason (an ETO reason) and therefore the claimant's dismissal was fair. However, this was not a position which had been pleaded or evidenced by Dow as part of its original case. This decision was again appealed to the EAT.
The EAT held that, where a transfer involves a change in working conditions to the material detriment of the claimant and the transfer is the occasion for the change, it will be hard to see how it could be found that the claimant had not set up a sufficient basis for a claim that the transfer was the reason, or principal reason, for the change in working conditions. If the respondent is unable to prove a sole or principal reason that is not the transfer then it is open to the tribunal to decide on a reason for the dismissal that was not advanced by either party, but there will have to be evidence on which it bases its conclusion.
Although the tribunal found that there was a health and safety reason behind the changes this was not pleaded by Dow in its original case, and no evidence had been supplied to support the fact that this had been the underlying reason in Dow's mind at the time. As a result the EAT substituted the decision that the claimant was unfairly dismissed because the sole or principal reason for dismissal was the transfer.
Take note: The decision in Lewis highlights the importance of a transferee having a valid ETO reason in place if it wishes to vary the contractual terms of a transferring employee and having evidence in place to support a defence to any subsequent claim on this basis. If there is no evidence of an ETO reason then the employee may be able to resign and bring a successful claim for a substantial change in their working conditions which is to their material detriment.
