The Court of Appeal has upheld the EAT’s ruling that dismissing employees who refused to accept harmonised employment terms following a TUPE transfer (and re-engaging them on the new terms) was not for a fair “ETO” reason despite taking place against a backdrop of possible redundancies. The fact that other employees were being made redundant could not support an argument that the dismissal of the claimants was for an ETO reason – it is the reason applicable to the particular individual that matters. It is possible that another tribunal might have made a different finding of fact as to the reason for dismissal, had the claimants themselves still been at risk of redundancy at the time and had the changes to terms been presented as an alternative to redundancy. The case highlights the fact-sensitive nature of these situations.

Note also that, following recent reforms to TUPE, dismissals are now automatically unfair only if the sole or principal reason is the transfer (subject to the ETO exception), rather than a “transfer-connected” reason; it is unclear how much difference this change will make in practice.

The court also confirmed that a tribunal can order re-engagement, in effect reinstating the old terms and red-circling their pay levels. (Hazel v The Manchester College, CA)