The two claimants in the recent case of The Manchester College v (1) Miss C Hazel (2) Mrs M Huggins transferred under The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) to the employment of the Manchester College in August 2009. In January 2010, the college proposed 200 redundancies together with changes to terms of employment for the remaining staff. The claimants were informed that they were not at risk of redundancy but were offered pay cuts of around 13.2 per cent and 18.5 per cent respectively. The college's rationale was that this avoided further redundancies. However, the claimants did not accept these terms and resigned in July 2010. They brought tribunal proceedings arguing that their dismissals had been unfair and sought reinstatement to their old conditions.

The first question the tribunal had to decide was whether the dismissals were unfair. Under Regulation 7(1) of 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" (an ETO reason). In this case, the tribunal found that the reason for the dismissals was the claimants' refusal to sign new terms. It found that this was a reason connected with the transfer, and held (by a majority) that it was not a valid ETO reason because it did not involve changes in the numbers or functions of employees. The dismissals were therefore automatically unfair. This was irrespective of the fact that other employees had been made redundant (which would have been an ETO reason), and the college had tried to link the redundancy programme to the terms offered to the claimants.

The tribunal then went on to consider remedy, and ordered that the claimants ought to be re-engaged on the new terms and conditions with the exception of the salaries, which would be restored to their previous levels and then "frozen... without cost of living increases or incremental increases until the new pay scale catches up with their salaries".

The college appealed this decision but the Employment Appeal Tribunal dismissed the appeal both in terms of liability and remedy.

This case highlights the difficulties in harmonising terms and conditions post TUPE transfers, and that employers engaging on efficiency savings drives must read carefully so as to prevent claims of automatic unfair dismissal arising.