Relocation following a TUPE transfer: is this a substantial change to employees' material detriment?

03 September 2014

The Employment Appeals Tribunal (EAT) has ruled on whether a relocation following a TUPE transfer amounted to a substantial change to employees' material detriment.

Many thanks to Pinsent Masons for this report on the EAT decision:

The EAT has upheld an Employment Tribunal (ET) ruling that the addition of between 30 and 60 minutes additional travelling time each day in London, following a TUPE transfer, did not amount to a "substantial" change or "material detriment" to workers under TUPE 2006. (TUPE 2006 deems an employee's resignation to be a "dismissal" where it is in response to a substantial change to the employee's working conditions to their material detriment (regulation 4(9)).)

The claimants in this case were a number of London bus drivers previously employed by CentreWest and working out of the firm's Westbourne Park depot. When the bus route on which they were employed was transferred to London United Busways, the drivers were required to move to a depot which was three and a half miles away at Stamford Brook. This was not suitable for them and they subsequently resigned, claiming constructive and unfair dismissal. Although there was a mobility provision in their contracts which could require them to work "at any of the company's work locations", the EAT found that this only applied to CentreWest locations before the transfer took place.

However, the EAT also found that, although the requirement to work out of a different depot was a breach of the employment contract, the addition of between 30 minutes and 60 minutes travelling per day was not substantial or to the material detriment of the employees; thus the breach was not "fundamental" enough for the purposes of regulation 4(9).

Interestingly, the facts of this case were very similar to the recent judgment of Abellio London Ltd (Formerly Travel London Ltd) v Musse and others, where the EAT held that a relocation of six miles because of a TUPE transfer was a substantial change in bus drivers' working conditions to their material detriment.

Comment: This ruling confirms that for actions brought under regulation 4(9) of TUPE, each case will be assessed on its own particular facts, notwithstanding the possibility of the case being similar to a previous decision. Employers will also note that the material detriment test for employees to satisfy under regulation 4(9) is likely deemed higher than had previously been the case. Another relevant consideration for employers in a scenario such as this is that the changes to TUPE in January brought in change of location as a potential ETO reason.