What happens if an employee refuses to transfer in a TUPE situation?
The European Communities (Protection of Employees’ Rights on Transfer of Undertakings) Regulations 2003 (TUPE) provide that the employees of a business which is being transferred from one employer to another must transfer with the business to the new employer.
Not only must the employees be transferred but they must be transferred with their accrued years of service, their existing terms and conditions of employment (with the exception of pensions), and also with the benefit of any collective agreement to which they may already be subject.
The application of the TUPE Regulations has been fraught with difficulties and has often given rise to more questions than answers.
What happens when an employee refuses to transfer?
One of the questions which has remained unanswered is what happens when an employee refuses to transfer.
Some were of the view that the original employer is obliged to find alternative employment, and, if unable to do so, the employee’s position is redundant and he/she is entitled to redundancy pay.
Others were of the view that an employee who refuses to transfer in a situation where his/her terms and conditions of employment are honoured by the new employer, is effectively resigning and no redundancy situation exists.
High Court decides a refusal to transfer is a resignation
At last we have the answer. The High Court in a recent decision (overturning the decision of the Employment Appeals Tribunal) held that a refusal to transfer is, in fact, a resignation.
Symantec TUPE case
In November 2006, Symantec transferred part of its business to Corporate Occupier Solutions (COS) following a decision by Symantec to outsource its EMEA facilities.
Two employees, employed by Symantec at the time of the transfer, objected to the transfer and chose not to transfer to COS.
Although they had been told by Symantec that their failure to transfer would be treated as a resignation of their respective positions, both contended that they had been dismissed by reason of redundancy and claimed to be entitled to lump sum redundancy payments under the Redundancy Payments Acts. They also claimed to be entitled to ex-gratia redundancy payments.
Symantec rejected their claims and contended that by reason of the TUPE Regulations, no redundancy situation applied as the two employees were entitled to their same jobs with COS on the same terms and conditions of employment in accordance with the TUPE Regulations.
The employees brought their claims to the Employment Appeals Tribunal (EAT) which decided that they were entitled to redundancy payments. Symantec appealed the decision to the High Court.
Mr. Justice Edwards stated that “…it does not follow that if an employee decides not to transfer a situation of redundancy automatically arises vis-a-vis the transferor. It cannot do so because the fact that an employee objects to the transfer does not of itself have the effect of negativing the transfer. It is just that an employee is not obliged to continue his employment relationship with the transferee…“.
Mr. Justice Edwards went on to state that “This court is completely satisfied that by virtue of regulation 4(1) it is not possible for the Defendants/Respondents in this case to make a redundancy claim against the Plaintiff/Appellant.”
Objecting to a transfer – the answer
This judgment is of huge significance to any companies who are involved in a transfer to which the TUPE Regulations apply as it finally clarifies how employees who object to a transfer should be treated by the transferor (i.e.the original employer).
 About the author: Helena Broderick is the Managing Consultant with CollierBroderick Management Consultants and chief writer here on the CollierBroderick Blog. If you wish to contact Helena with regards services you can do so here. Or you can follow Helena on Twitter for daily HR and employment law tips, or connect on LinkedIn, or you can find out about the array of services CollierBroderick provide from the CollierBroderick homepage. |
