Thackray Williams

BUYING A BUSINESS?
TENDERING FOR A CONTRACT?
IF SO, ARE YOU PLANNING ON MOVING ANY AFFECTED EMPLOYEES?
 

Where a business is sold (other than by share sale) or a contract put out to tender (in-sourcing/out-sourcing etc) the staff of the business (or the part thereof which is sold) or the staff who work predominantly on the contract being transferred will usually transfer with the business/contract on their existing terms and conditions of employment as if their original contract of employment was with the purchaser/transferee, under the Transfer of Undertakings(Protection of Employment) Regulations, or "TUPE" for short.

Unless the contract being re-tendered is to run a hospital canteen or such like where the workplace must remain static and only those running it change, following the purchase or service provision change the new employer may often wish to change the place of work of the transferring staff.

In the case of Tapere v south London & Maudsley NHS Trust, following such a TUPE transfer Mrs Tapere objected to her place of work being changed. Even though she was only being asked to move a relatively short distance, (from working in Bromley to Beckenham) which her new employer considered a "reasonable" request to make, she claimed the move would increase her commuting time and would interfere with her childcare arrangements. She resisted the change, went sick, then resigned claiming the move constituted a fundamental breach of contract.

Mrs Tapere's contract of employment with her original pre-transfer employer contained a mobility clause enabling her employer to move her anywhere within that Primary Care Trust. She transferred on her original terms and conditions of employment so retaining this clause. The EAT held that the new employer (the transferee) were wrong to interpret the clause, post transfer, as a entitling it to move her to any location it owned, following the doctrine of "substantial equivalence". Instead they construed it as meaning they could only move her to a location within the area of the transferor PCT.

"Reasonableness" was found to be irrelevant here as the fact was that the new employer proposed breaching Mrs Tapere's contract of employment.

In then deciding whether Mrs Tapere had been unfairly (constructively) dismissed the EAT held that the Tribunal ought to have looked at whether there was a "substantial change in her working conditions to her material detriment" even if the change fell short of being a repudiatory breach of her contract of employment.

Looking objectively at the employer's and the employee's positions the relevant questions therefore were:-
• What were the impact of the proposed change from the employee's perspective?
• Did the employee regard these effects as detrimental? and if so,
• Was that a reasonable position for her to adopt?

Following this case, those tendering for contracts or considering purchasing a business by asset sale would be well advised to consider the adequacy of the mobility provisions in the contracts of employment of any affected staff and to take advice thereon before committing themselves.

For further information contact Lisa Judd on 020 8290 0440 or email:lisa.judd@thackraywilliams.com