Jeffrey Jupp's TUPE resource

Osborne v Capita Business Services Ltd EAT – 10 November 2016


This case concerns the ETO defence in Reg 7 (before the 2014 amendment of Reg 7 and the introduction of Reg 7(3A)).   The EAT provides a useful reminder of the approach to ETO issues.


The Facts

The Council, by way of a service provision change, outsourced; pensions, customer services, HR and, benefits support and control services to C from 1 September 2013.    Some thirty staff were made dismissed.  It was claimed that the dismissals were unfair because they were for a reason related to the transfer.  C defended the case on the basis that the dismissals were for an ETO reason, namely; savings arising from economies of scale, sharing services and accommodation with others, automating processes and introducing customer self-service.   Nine lead claims were selected to be reflective of the varying circumstances giving rise to the dismissals.


The ET judgment

In respect of seven claimants the ET held that they were dismissed because their roles had moved to different locations and the functions of their roles had been split.  In respect of the other two claimants (O and L) the position was as follows.  As regards O, the reason for his dismissal was because his role had moved from Barnet to Coventry.  As regards L, her role had moved to Darlington and, whilst there were some differences between her role and the new role, these were not significant.  She was dismissed because she refused to move to Darlington.

The ET held that the principal reason for the dismissal of the claimants was a reason related to the transfer.  The ET then considered each of the nine claimants separately and whether the ETO defence was made out in their cases.  In respect of O the ET held that the principal reason for the dismissal was relocation of the role and that this was not (as the Regulations then provided) a valid ETO reason.  In respect of the group of seven claimants referred to above, the ET held that the reason was because the jobs were split between various functions and because of the relocation of those functions to various towns and cities.  This was an ETO reason entailing changes in the workforce.  In respect of L it was held that because the intention was to reduce numbers she was affected by this and even though her role had not changed much this was nevertheless a valid ETO reason.


The EAT judgment

The eight unsuccessful claimants appealed.  In respect of the group of seven the primary ground of appeal was that the ET had failed to have regard to an undertaking given by C at the time of the transfer that any employee who wished to move to the new location would be entitled to do so and would not have to undergo any competitive process.   The argument on behalf of the claimants was that this clearly demonstrated that the reason for the dismissal was the change in job location.  However, C had not said that the claimants would retain their existing roles but simply that they would be given a role.

The EAT, Langstaff J, dealt shortly with this ground of appeal – the ET did not have to deal with every point raised before it.  What was important was that a party knew why they had won or lost and here the reason was clear.  The group of seven claimants were dismissed because their roles had been divided up and redistributed and because the locations had changed.  The change in functions was sufficient to establish the ETO defence.  The undertaking that was given may be relevant to the fairness of the dismissals but was not relevant to the ETO defence.    The EAT accepted the position of L was different and because there was no change to her role the ET ought not to have held the ETO defence was established in her case.


The usefulness of this EAT decision lies in Langstaff’s J reminder of the principles of the ETO defence: A structured approach to ETO reasons as set out in Manchester College v Hazel should be applied.

  • Establish the reason for the dismissal;
  • Determine whether the dismissal is because of the transfer itself or reason connected to it. If the former, the dismissal is automatically unfair.  If the latter, is there an ETO reason?
  • As regards ETO:
    1. is the reason an economic, technical or organisational reason;
    2. does it entail changes in the workforce?

(As will be appreciated (a) and (b) are apposite for dismissals before 31 January 2014.  For dismissals after that date Reg 7 no longer refers to ‘a reason connected to the transfer’ (see comment below)).

Further, the following principles also apply:

  • In any dismissal (and TUPE dismissals are no different) the focus is on the contract the employee is working under. Therefore, even if the employee continues working for the employer, if he does so under a different contract imposed on him, there will have been a dismissal.
  • The identification of an economic, technical or organisation reason usually causes little difficulty, however the qualifying phrase, ‘entailing changes in the workforce’ often does.
  • Each claimant must be considered separately, Miles v Insitu Cleaning Co Ltd.
  • Any change in role must be significant, Green v Elan Care Ltd.
  • A mere change in location will not amount to change in the workforce, RR Donnelly Global Document Solutions Group ltd v Besagni.



Although not addressed by the EAT, the removal of the reference to a ‘reason connected to the transfer’ in the amended Reg 7 leaves potentially three possibilities when identifying the principal reason for the dismissal:

  • The transfer itself – automatically unfair.
  • An ETO reason (which now includes a change in place of employment) – potentially fair.
  • A reason connected to the transfer which is not the transfer itself and is not an ETO reason – either fair or unfair depending on the reason.

Link to EAT judgment

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