Transfer causing substantial detrimental change

Special rules apply if a transfer results, or will result, in a substantial worsening of working conditions for transferring employees. Under regulation 4(9) TUPE, if a transfer involves “a substantial change in working conditions to the material detriment of” a transferring employee, he or she is entitled to regard themselves as dismissed (a “deemed” dismissal), and to claim unfair dismissal or a redundancy payment. However, someone who relies on these rights cannot claim payment in lieu of any contractual notice period.

This kind of claim can be brought before or after the transfer. The longer the delay, the harder it will be to show that the transfer, rather than some unrelated event, caused the detriment.

A change in working conditions can be “substantial” even if it does not breach the employment contract. It could include a significant change to contract terms, physical working conditions or non-contractual benefits.

A dismissal in breach of regulation 4(9) TUPE is automatically unfair, but two years’ service is needed to bring a claim (one year in Northern Ireland).

There will be no breach of regulation 4(9) if the employer can establish an economic, technical or organisational (ETO) reason for making the change (regardless of how detrimental it is), as long as that change entails “changes to the workforce”. This aspect of TUPE is explained in more detail on page 355.

Legal advice should be sought before bringing a claim for deemed dismissal under regulation 4(9).