TUPE ruling: Employees who refused to transfer win significant victory

Employees of a North West legal firm who refused to transfer to a new employer on the grounds that their working conditions would have changed substantially have won their case.

The recent ruling was made in the case of Barnetts Solicitors v Royden and others who were among staff who worked for Liverpool law firm Lees Lloyd Whitley (LLW).

In 2007 they were among 23 staff affected when Barnetts won a £1m contract to provide legal services to the Britannia Building Society, previously held by LLW.

The staff worked at LLW’s Birkenhead office but, after the transfer, they would have been required to work at Barnetts’ Southport office or at the Bradford or Manchester offices of Hammonds, a legal firm that collaborated with Barnetts in fulfilling Brittania work.

Southport was the only location the claimants would consider, but they were reluctant to work there and resigned on 4 June 2007 on the grounds that the transfer breached their contracts. They claimed constructive dismissal.

Judge Derek Reed ruled that Barnetts had failed to consult with the 23 LLW staff “affected by a service provision change” under the 2006 TUPE regulations.

The employees had been subject to a “substantial change in working conditions to their material detriment” which meant they could treat their contract as being terminated unfairly.

Their lawyer, Gordon Turner, principal of central London law firm Partners Law, commenting on the implications of the case, said: “As before, employees transfer with all their contractual rights in place. However, now, under regulation 4(9) there is a new, softer, constructive dismissal, which means that if an employer makes substantial changes to working conditions causing material detriment, the employees have the right to resign and claim unfair dismissal.

“That is an area particularly relevant to HR managers because working conditions does not mean contractual ones.

“It is essentially the habits of employment enjoyed pre-transfer and can incorporate all kinds of factors, such as job descriptions, locations, uniforms, and job status.”

Turner said that, in his view, if a minibus had been laid on for the affected employees to take them to Southport as required – at cost of about £100 per day – the case would probably never have progressed.

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