Constructive dismissal lite? Substantial detriment in TUPE.

A recent EAT decision makes it worth revisiting the meaning of regulation 4(9) in the Transfer of Undertaking (Protection of Employment) Regulations 2006:

Reg 4(9): Subject to regulation 9, where a relevant transfer involves or would involve a substantial change in working conditions to the material detriment of a person whose contract of employment is or would be transferred under paragraph (1), such an employee may treat the contract of employment as having been terminated, and the employee shall be treated for any purpose as having been dismissed by the employer.

This is usually seen as easier for an employee to show than constructive dismissal, which of course was a remedy available to employees under the pre-2006 regulations if it could be shown that the new employer was failing, or would fail, to keep to an essential term of the contract of employment.  Within 4(9) however, it is simply enough to show that working conditions would change substantially such as to cause material detriment. This need not involve any contractual breach at all. Naturally there is a great deal of overlap.

In Tapere v South London & Maudsley NHS Trust [2009] UKEAT the employee’s employment was transferred from one NHS Trust to another. The transferee made it clear that following the transfer it would wish her to move from her old offices in Camberwell to the Bethlem Hospital in Beckenham. She wasn’t happy:

[The Claimant] was reluctant to move to work at the Bethlem in Beckenham as she believed that it would increase the journey time. She is a single mother and has to collect her child from school and be available till 8 a.m. when her child would be collected for school by taxi. She gave evidence that if she travelled via her old route of the A13 the journey time to Beckenham would be significantly longer – an additional 10 miles.

The transferee sought to instigate this change under a mobility clause. She resigned and claimed both constructive dismissal, on the basis that the mobility clause did not actually permit the change in location, and reg. 4(9), in that the change was a substantial change in working practices to her material detriment.

The Employment Tribunal found against her on both counts. I shan’t go into the discussion of the mobility clause here, of which there is much, but it is worth a read. Of interest however is the construction of “substantial change” and “material detriment”. The Tribunal had given rather scarce consideration to the terms, but had stated that it had looked at the matter objectively.

The EAT ruled that that the correct interpretation of detriment was that found in the discrimination caselaw. The EAT noted Shamoon v Royal Ulster Constabulary [2003] IRLR 285, in which Lord Scott followed the key decision of Chief Constable of the West Yorkshire Police v Khan [2001] IRLR 830. Lord Scott, at para 105:

‘a detriment exists if a reasonable worker would or might take the view that the [treatment] was in all the circumstances to his detriment’, must be applied by considering the issue from the point of view of the victim. If the victim’s opinion that the treatment was to his or her detriment is a reasonable one to hold, that ought, in my opinion, to suffice. In Khan the complainant, desiring to apply for a new job, wanted a reference to be given by his employers. His employers refused to give one. It was clear that if they had given one it would have been an unfavourable one. It might be said that a reasonable worker would not want an unfavourable reference. But the complainant wanted to be treated like all other employees and to be given a reference. The House concluded that this was a reasonable attitude for him to adopt and that the refusal to give him a reference, constituted ‘detriment’. He was being deprived of something that he reasonably wanted to have. And while an unjustified sense of grievance about an allegedly discriminatory decision cannot constitute ‘detriment’, a justified and reasonable sense of grievance about the decision may well do so.

So the correct approach is to consider whether the Claimant holds the view that he has been subjected to a detriment, then consider if he holds that view reasonable. The test is thus subjective, as one looks at the employee in particular. The consequences of this case is that the bar for reg. 4(9) dismissal remains low. I will review the law on mobility clauses in a later post.

This case demonstrates well the ‘purposive’ approach taken in construing regulations designed to implement European law. First, “working conditions” in TUPE does not mean “the conditions under which one works” but is to be interpreted far more widely. Second, the word material in this case does not connote physical materiality, it simply reinforces that the detriment must not be trivial or fanciful, which is of course usually dealt with by the word ‘substantial’.

Finally it should be noted that the successful Appellent was represented by James Medhurst, who blogs about the case himself and has been kind enough to comment on this blog on occasion.

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