Representation:

an employee who resigns on or before a transfer of ownership of the undertaking in which he is employed because of well-founded fears that the new owner intends to impose worse terms and conditions of employment than those provided by the original owner can claim constructive wrongful dismissal against the original owner;

and an example of

the way in which the courts will lean over backwards to find sensible ways of interpreting the 1981 TUPE regulations.

For main relevant notes see Constructive dismissal and see also Transfer of business or undertaking/change in terms of employment after and Transfer of business or undertaking/opting out .

Outline facts

Mr. Humphreys had worked for Oxford University since 1985 in a department called the "Delegacy of Local Examinations". His main job was setting and marking GCSE and A level exams. The University decided to transfer the operations of the Delegacy to an organisation called the Associated Examination Board ("the AEB") with effect from 1st April 1995.

Mr Humphreys wrote to the University informing them that he objected to the proposed transfer on the grounds that the AEB would make substantial and detrimental changes to his terms of employment (mainly those concerned with his pension rights and retirement age). The transfer went ahead. Mr Humphreys refused to take up a job with the AEB and claimed constructive wrongful dismissal against the University.

The University pointed out that the TUPE regulations 1981 (SI 1981/1794, as amended in 1993) clearly state that if an employee objects to his employment being transferred to the new owner of a business then the transfer "shall operate so as to terminate his contract of employment with the transferor but he shall not be treated, for any purpose, as having been dismissed by the transferor" (see TUPE regulations 1981 (SI 1981/1794) reg 5(4B)).

The University argued with somne force that this wording was quite clear. However unfair or odd it might be, the regulations provided that in these circumstances Mr Humpheys could not be treated "for any purposes" as having been dismissed by the University. The University therefore applied for an order striking out Mr Humphrey's claim on the ground that it disclosed no reasonable cause of action against the University.

At a preliminary hearing in 1998 the judge refused to strike out Mr Humphrey's claim but allowed the University to have the AEB joined as a party. The University appealed to the Court of Appeal against the judge's refusal to strike out the claim.

Decision

Mr Humphreys won again. The Court of Appeal came to the same conclusion as the judge, albeit for different reasons.

Although the arguments were technical (see below for a vary brief outline), the underlying principle is not. The underlying principle was simply that the purpose of the EC Acquired Rights Directive 77/187/EEC (and therefore also of the 1981 TUPE regulations which implement it in the UK) is "to protect, not remove, the employee's rights upon transfer of an undertaking" (per Potter LJ). Although the judge did not put it like this, it followed that proper interpretation of the 1981 TUPE regulations should not remove Mr Humphrey's common law right to sue for constructive dismissal even if this meant stretching interpretation of the wording to the very limits allowed by logic and parliament's choice of language.

The technical grounds on which the Court of Appeal decided the case were not the same as those chosen by the judge at first instance. The judge at first instance had taken the same bold approach which the House of Lords took years ago in sorting out other TUPE problems (see Litster v Forth Dry Dock and Engineering Co Ltd 1989 ICR 341, HL): he simply read the regulations as though they included additional words.

In the Court of Appeal, Potter LJ, explaining his own reasoning, thought this was going further than was necessary. In the course of a quite complicated judgment, the Court of Appeal held that it was possible to construe the wording of the 1981 TUPE regulations (as amended) as they stand to achieve the same sensible result as that achieved by the original judge and in particular that "the opening words of [reg 5(5)] are apt to make it clear that the common law right of the employee "apart from" the [TUPE] regulations to sue for repudiation/constructiver dismissal in the case of a detrimental change in working conditions remains".

In other words, if not exactly an irrelevant red herring, the TUPE regulations did not apply and Mr Humphreys could rely on normal common law rights.