Transfer causing substantial detrimental change

The situation is different if the transfer results, or will result, in a substantial worsening in working conditions. Under regulation 4(9) of TUPE, where a transfer involves, or would involve, a substantial change in working conditions to the material detriment of a transferring employee, that employee is entitled to regard themselves as having been dismissed and claim unfair dismissal or a redundancy payment. Someone who relies on their rights under regulation 4(9) cannot claim payment in lieu of any contractual notice period.

A claim under regulation 4(9) can be brought either before or after the transfer. The case law is not clear as to how long it might be safe to wait after the transfer. In principle, a statutory right under TUPE can never be “waived”, but in practice the longer the delay, the harder it becomes to show that the transfer was the cause of the detriment or the decision to resign, as opposed to some unrelated reason.

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

Regulation 4(9) only protects transferring employees. Anyone wishing to resign because even though they did not transfer, their working conditions have substantially worsened as a result of a TUPE transfer (say, for example, because their workload substantially increases or decreases because of the transfer) cannot rely on regulation 4(9). Instead they must establish a fundamental breach of contract and claim constructive dismissal (see page 277).

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