The EAT has upheld a tribunal`s finding that two employees, who were dismissed for failing to agree to new terms (including a pay cut) following a TUPE transfer, were unfairly dismissed.
In the case of Manchester College v Hazel and another, Mrs Hazel and Mrs Huggins, along with about 1,500 other employees, had their employment transferred to The Manchester College under TUPE, when the College took over a contract for providing offender learning at HM Prison Elmley, in August 2009.
In January 2010, due to the economic situation facing the higher education sector, the College proposed about 200 redundancies together with changes to terms of employment for the remaining staff. Significant negotiations took place with the University and Colleges Union (UCU) over the new terms. Mrs Hazel and Mrs Huggins were in due course informed that they were not at risk of redundancy and were offered alternative employment on new contracts which involved, among other things, a pay cut of 13.2% and 18.5% respectively. The employer`s rationale for the new terms was that, without them, more redundancies would be necessary. The claimants refused to agree to the new terms and were dismissed by letter in July 2010. The College once again offered employment on the new contracts, which the claimants accepted, and returned to work after their dismissals. However, they brought claims arguing that their dismissals had been unfair and sought, among other things, reinstatement on their old conditions.
The EAT held that although the reason for dismissal was an economic, technical or organisational reason, it did not entail changes in the workforce and therefore the appeal by Manchester College was dismissed. EAT upheld the tribunal`s order for re-engagement of the employees at their old rate of pay, with the proviso that they would not receive any pay rises until their colleagues (who had agreed to the new terms) had caught up. This raises interesting observations about "practicability" arguments where the employer has already re-employed the unfairly dismissed employee by the time of the hearing. Frequently, employers try to argue that reinstatement or re-engagement of employees would not be practicable because trust and confidence has been destroyed. This demonstrates that even though an unfairly-dismissed employee has signed a new contract, the tribunal has the power to reinstate the old contract. This is a power which would apply not only in TUPE-related cases such as this, but in any case in which an employer has implemented new terms by unfairly dismissing and re-engaging the dissenting employees. The employer`s arguments would have to focus instead on the impracticability of working to old contractual terms.