Nationwide Building Society v Benn 2010 UKEAT/0273/09

Mr Benn and the other employees’ claims for unfair dismissal against the Nationwide arose from their resignations from employment following their transfer from the Portman Building Society to the Nationwide in August 2007. The former Portman employees contended that their terms of employment were altered as to their detriment. Their job role and responsibilities were downgraded when they were assimilated into the Nationwide. The Nationwide bonus scheme which was to, or did replace the Portman Bonus Scheme was substantially less beneficial to them. These acts constituted fundamental breaches to their contracts entitling them to resign, as there had been a change to their working conditions to their detriment.

The Tribunal held that the reason for the constructive dismissal was an ETO reason entailing changes in some of the workforce’s job functions within the meaning of the Regulations and their dismissals were therefore not automatically unfair but they were held to be unfair for some other substantial reason. The EAT agreed. The employees had been dismissed constructively or by application of Regulation 4(9) (change amounting to a material detriment). The issue of the fairness of the dismissals was remitted to the same tribunal for reconsideration.

Key point: For an ETO reason to entail changes in the workforce there must be a change in job functions or numbers of the workforce. There can still be an ETO reason where the change in job functions only applies to that section of the workforce who had transferred.