In Nationwide Building Society v Benn and ors [2010]
IRLR 922 the EAT reviews the meaning of both Regulation
4(9) and Regulation 7(2) of TUPE 2006.
The Claimants are all former employees of Portman Building Society
who resigned following the transfer of the business to Nationwide
Building Society. They claimed that the term of their employment
were altered to their detriment by Nationwide in that their roles
and responsibilities were downgraded as a result of being
assimilated into what Nationwide contended to be comparable roles.
They also complained about changes to their bonus arrangements. The
ET upheld their claims but found that the changes made by
Nationwide amounted to "an economic, technical or
organisational reason entailing a change in the workforce"
within the meaning of Regulation 7(2) of TUPE. The ET also found
that the proposed changes were both in fundamental breach of the
Claimants' contracts and/or amounted to a substantial change in
their working conditions which was to their detriment.
On appeal it was contended that such a change had to relate to the
workforce as a whole rather than just the transferring staff.
However, the EAT ruled that an ETO reason entailing a change in the
workforce within the meaning of Regulations 7(1) and (2) of the
Transfer of Undertakings (Protection of Employment) Regulations
2006 may be relied on by a transferee seeking to harmonise the
roles and employment terms of the transferring workforce with those
of their own workforce. The EAT also confirms that where the
changes are "substantial" these may fall within the scope
of Regulation 4((9) of TUPE and amount to a "substantial
change in working conditions to the material detriment of a person
whose contract is or would be transferred". (The Appeal was
allowed on technical grounds that in breach of the principle of
natural justice the ET, in giving its reasons, had referred to a
factor which had not been relied on by the parties and on which
neither party had been given an opportunity to comment. At the time
of writing, this part of the EAT's ruling is under
appeal).
The EAT ruling appears to open the way to harmonisation of terms
and conditions of transferring employees to those of the existing
workforce provided this forms part of a restructuring of their
roles as opposed to the roles of the workforce as a whole.
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