In Hazel and another v The Manchester College [2014] EWCA Civ 72, the Court of Appeal held that the dismissals of employees for refusing to accept new terms of employment following a TUPE transfer were automatically unfair.

The employment of Mrs Hazel and Mrs Huggins (the "Claimants") transferred to Manchester College (the "College") under TUPE in August 2009.  In January 2010, as part of a cost cutting exercise, the College proposed large scale redundancies and changes to terms of employment. The Claimants were offered new contracts (which included pay cuts) as part of an attempt to harmonise their terms with those of other College employees.  The Claimants were dismissed after they refused to accept the new terms and brought unfair dismissal claims.  

The Court of Appeal said that the question to be asked was:  what was the ‘sole or principal' reason for the dismissals? The Court found that it was clearly the Claimants' failure to accept the new harmonised terms. The fact that redundancies were taking place at the same time as the harmonisation exercise was irrelevant.  As such, the ‘sole or principal' reason was not an economic, technical or organisational reason entailing changes in the workforce which could have justified the dismissals, and the dismissals were therefore automatically unfair. Unusually, rather than awarding compensation, the Court ordered the re-engagement of the Claimants on their original pay, on the condition that it would be frozen until the other employees' pay had caught up. 

It is worth noting that this case was decided under TUPE 2006, before the changes outlined in this alert were implemented (including the relaxation of the rules on changing terms of employment). It will be interesting to see whether these changes affect the courts' approach to TUPE-related dismissals in the future.