TUPE applied to the retendering of a contract to provide conveyancing services. Solicitors at the original firm who spent the majority of their time on work for that client were entitled to resign and claim unfair dismissal where the new firm was located 20 miles away.
This is the first tribunal decision applying TUPE to a client's decision to change law firms.
Only those employees who spent the majority of their time on the client's work were protected by TUPE, so TUPE is unlikely to bite in many such cases. And even where there are solicitors assigned to one client, in practice all parties may be willing for them to remain at the original firm if there is other work for them to do.
However, the case does highlight the risk that the new firm (or the client, if insourcing) may end up with the employees or liability for terminating their employment. This is so even if the reason for the client's decision is dissatisfaction with the work of those individuals. There may also be liabilities for failure to inform and consult. Tendering firms/clients may wish to check whether the outgoing provider had employees dedicated to the work before deciding their approach.
The case also highlights the risks where a new service provider operates in a different location. Even if the employees' contracts permit relocation (so there is no breach of contract), they can still claim constructive dismissal under TUPE if the change amounts to a substantial change in working conditions to their detriment.
Employers can defend unfair dismissal claims if the reason for dismissal is an economic, technical or organisational reason entailing changes in the numbers or functions of the workforce. In the first clear decision on the point, the tribunal was unwilling to interpret this test as satisfied by a change in the numbers required at a particular location, if overall headcount remains constant. It is not yet known whether this decision will be appealed. (Royden v Barnetts Solicitors, ET)