Each issue we will feature an in depth look at an Employment Tribunal case involving an education institution. This week, we look at how the Employment Appeal Tribunal have ruled on whether TUPE related dismissal were unfair in The Manchester College v Hazel and Another

The Manchester College v Hazel and Another UKEAT/0642/11/RN

Both claimants had their employment transferred to The Manchester College in 2009 upon successful tender for Offender Learning Contracts. They both worked throughout their employment as academic staff at HMP Elmley.

As a result of a review in the first quarter of the offender learning contracts, hidden costs were discovered which had not been appreciated during the tender process. The Learning and Skills Council offered £1.9 million to assist with these costs. Additionally, the College Principal made a proposal to the Board for staff restructuring and efficiency savings. 300 redundancies in offender learning were suggested, along with a review of terms and conditions in staff employment contracts.

Staff were put at risk of redundancy and consultation commenced on the re-negotiation of contracts with University and College Union. Subsequently, both claimants were told that they were no longer at risk but their salary would be subject to cuts of between 13.2% and 18.5%. The claimants objected to the pay cuts and ultimately, because of their refusal, were told by the College that they had no other alternative but to terminate their employment. In due course, agreement was reached and the claimants continued to work for the College.

The Transfer of Undertakings (Protection of Employment) Regulations 2006 provide that it is unlawful to amend terms and conditions, or dismiss an employee, where the reason is the transfer itself, or a reason connected with the dismissal, unless there is an ‘economic, technical or organisational reason entailing changes in the workforce’ (an ETO reason). ‘Changes in the workforce’ is read as changes in the numbers or functions of the staff. Case law shows that changing terms and conditions merely to avoid running two different pay scales, known as harmonisation, is not permitted.

The Tribunal found that the dismissals were for a reason connected with the transfer, however, the reason for dismissal was not the redundancy process, but the refusal to agree to the new terms and conditions that the College were trying to impose. In terms of time, the redundancy process was over and the claimants had been told that they were no longer at risk by the time they received the letter regarding a change to their pay. The change in pay was for an ETO reason, but it did not entail changes in the workforce.

The Tribunal rejected the College’s assertion that where harmonisation is accompanied with redundancies, that this was not unlawful. The dismissals had therefore been unfair and it was ordered that the claimants be re-engaged on their previous salaries. This meant that the employees were entitled to return to work on their previous salaries.

Upon appeal, the College argued that the whole process (that of redundancies and changes to terms and conditions) should be viewed as one and not looked at separately. The Employment Appeal Tribunal agreed with the original tribunal decision that the processes were separate and upheld the finding of unfair dismissal.

The College also asked to review the tribunal’s decision to re-engage the claimants on the grounds that there would be worker discontent if the claimants were re-engaged on their previous salary. The EAT rejected this, relying partly on the evidence given by a witness in which it was stated that, should re-engagement on previous terms occur, the other workers would handle it.

For further clarification of this or any other matter relating to employment law in schools or other education establishments, clients should call the specialist Education Team on 0844 892 2810.