Labour Court highlights limits to TUPE protections: Refusal to transfer amounts to resignation
In The Employee v Rapier Contract Services Limited, the Labour Court found that an employee terminated her own employment when she refused to transfer to a new employer under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (“TUPE Regulations”).
The complainant was employed as a concierge at Rapier Contract Services Limited. As part of her role, she was trained in security and obtained a security licence. A decision was taken to transfer Rapier’s concierge business to a sister company, Synergy Security Limited.
Rapier notified the complainant that her employment would transfer to Synergy. She refused to transfer. Rapier advised her that her refusal would amount to resignation and that her employment would terminate on a specified date. She filed a complaint of unfair dismissal three days later.
Decision of the Workplace Relations Commission
The Workplace Relations Commission noted that the complainant accepted that her work would remain the same after the transfer. It held that there was no basis to conclude that her employment terminated other than as a result of her own actions. She appealed to the Labour Court.
Decision of the Labour Court
At the Labour Court, the complainant acknowledged that she refused to transfer to Synergy and submitted that it would have been to her disadvantage to work in security and to work for a sister company of Rapier. Rapier claimed that she was notified of the legal consequences of her refusal to transfer and that no dismissal took place.
The Court noted that it must decide whether she resigned, or was dismissed. If the former, then that would end the matter. If the latter, the Court would proceed to decide the substantive unfair dismissal claim.
Application of Symantec Limited v Leddy and Lyons
Rapier relied on Symantec Limited v Leddy and Lyons, where the High Court found that the TUPE Regulations do not make specific provision for what happens if an employee refuses to transfer. The High Court held that the employee’s objection to transfer does not negate the transfer, and the purpose of Council Directive 2001/23/EC, and the TUPE Regulations, is not to continue the employment contract with the transferor when employees refuse to transfer.
The Court found that the complainant’s terms and conditions of employment would have been unaffected by the transfer and that her assertions to the contrary were misconceived.
The Court noted that Symantec concerned the Court’s dismissal of a claim by two employees that they were entitled to redundancy payments following their refusal to transfer, and held that the same principle applied to a claim for unfair dismissal. The Court found that any employee who refuses to transfer cannot sustain a claim for unfair dismissal against the transferor but instead terminates his/her own employment.
The Court held that the claim for unfair dismissal was not well founded and upheld the Workplace Relations Commission’s decision.
Points to Note
It is especially noteworthy that the transfer in this case (and indeed the transfer in Symantec) would not have involved any change to the terms of employment and that there was full cooperation between the transferor employer and the transferee employer.
The legal position is not yet clear in cases where the transfer involves a change in work, location, terms of employment or in pension arrangements and where the objection is grounded on such changes.