Under the Transfer of Undertakings Regulations (TUPE), any dismissal of an employee will be automatically unfair where the sole or principal reason for the dismissal is either the transfer itself, or a reason connected with the transfer that is not an "economic, technical or organisational reason entailing changes in the workforce" (ETO reason).

After the transfer to the College of the claimants and others, the College employed some 3,500 staff on 37 different sets of terms and conditions of employment.  When it became clear that the services were not economically viable, around 300 redundancies were proposed, alongside a programme of harmonising terms and conditions of remaining staff.  The claimants refused to accept the new terms, because they involved a pay cut.  They were dismissed and re-hired on the new terms and conditions and brought unfair dismissal claims.

The dismissals were found to be automatically unfair.  They were for a reason connected with the transfer and the College could not show that they were for an ETO reason, because the dismissals did not involve a change in employee numbers or functions.  The fact that redundancies had taken place at about the same time did not alter that analysis.  The tribunal was entitled to order re-engagement, meaning that the claimants continued to be employed on the new terms and conditions but with their (higher) pre-dismissal salaries preserved.

The difficulties of harmonisation following a TUPE transfer have been recognised by the Government for some time but, frustratingly, in its recent consultation on TUPE, it claims that the scope for change is severely limited by the requirements of the European Directive (whilst at the same time noting the problems caused in cross-border negotiations by the differences in implementation of the Directive across Europe).  The only concrete proposal is to allow a change of workplace location following a transfer to be an ETO reason (so that a dismissal for refusing to accept such a change would not be automatically unfair).