In this case two employees were dismissed following a TUPE transfer and offered re-engagement on new terms, which included a pay cut. The employees accepted the new contract and continued to work for the transferee however they also sued for unfair dismissal.

The key facts of the case are as follows:
  • Manchester College bid for and won the Offender Learning contracts from the Learning and Skills Council. Unfortunately there were many hidden costs which were not discovered during the due diligence process.
  • Following the transfer Manchester College were forced to carry out a large redundancy process.
  • The College wanted to make further cost reductions and so then started a process of harmonising terms and conditions.
The EAT found that the two employees were unfairly dismissed following the TUPE transfer. It was found that the reason for the dismissal was an economic, technical or organisational (‘ETO’) reason, however it did not entail changes to the workforce.
 
The fact that others were being dismissed by reason of redundancy at the same time was not enough and that it is necessary to look at the reason for the dismissal of the specific employee.
 
The EAT upheld the tribunal’s decision that the employees be re-engaged on their original terms, including their previous rate of pay.
 
Key point: Harmonising terms following a TUPE transfer is never easy as this case highlights. The fact that redundancies are taking place at the same time will not be sufficient evidence of there being an ETO reason entailing changes in the workforce.
 
Manchester College v Hazel