Humphreys v University of Oxford

This judgment holds that the TUPE objection route under Regulation 5(4A)–(4B) does not extinguish an employee's common law right to treat a transfer as constructive dismissal where the transfer would produce a substantial detrimental change in working conditions.

The court further holds that, when an employee validly objects under Regulation 5(4A) and relies on the preserved common law right in Regulation 5(5), the remedy is against the transferor, not the transferee.

The claimant was a long‑serving employee whose employer proposed to transfer his post to a third party. He formally objected under Regulation 5(4A) of the Transfer of Undertakings (Protection of Employment) Regulations 1981 and treated the ending of his employment as constructive dismissal. The University sought strike‑out on the ground that Regulations 5(4A)–(4B) prevented any claim against it. The Queen's Bench judge refused strike‑out and allowed joinder of the transferee. The University appealed to the Court of Appeal. The central issue was whether the objection provisions deprived the employee of any remedy for constructive dismissal and, if not, which party was liable.

1. Disposition. Appeal dismissed. The Court of Appeal agreed with the judge below that the claimant retained a cause of action for constructive dismissal in circumstances where a transfer would inevitably produce a substantial and detrimental change in working conditions. (Per Potter LJ; Moore‑Bick J and Roch LJ concurring.)
2. Construction of the Directive and Regulations. The court applied the purposive approach required by the Acquired Rights Directive (77/187/EEC). Article 4(2) requires member states to ensure an employee may obtain a remedy where a transfer causes a substantial detrimental change. The Regulations must be read to give effect to that purpose. (See [1992] ECR Katsikas and [1997] ICR 352 Merckx.)
3. Effect of Regulation 5(4A)–(4B) and Regulation 5(5). Paragraph (4A) prevents statutory novation where the employee objects. Paragraph (4B) records the consequence of such an objection but does not, in the court's view, extinguish rights preserved by paragraph (5). Paragraph (5) preserves any right arising apart from the Regulations to terminate for a substantial detrimental change. Read purposively, paragraph (5) covers an employee who treats himself as constructively dismissed because the transfer would inevitably produce the detriment. (Potter LJ; Moore‑Bick J; Roch LJ.)
4. Proper defendant. Where an employee validly objects under Regulation 5(4A) and relies on the common law right preserved by Regulation 5(5), the contract and accrued rights remain with the transferor. The remedy for constructive dismissal lies against the transferor, not the transferee. (Moore‑Bick J explained the reasoning at length, adopted by the other members.)
5. Practical guidance. The court rejected a construction that would create a trap for employees who formally object to transfer. The purpose of the amendments to the Regulations was not to remove remedies where Article 4(2) applies.
6. Orders. Appeal dismissed. Costs awarded as indicated in the judgment below; leave to appeal to the House of Lords refused.

• Queen's Bench Division (H H Judge Charles Harris QC): Application to strike out claimant's statement of claim dismissed; claimant given leave to join the transferee.
• Court of Appeal (Civil Division): Appeal by the University dismissed. Leave to appeal to the House of Lords refused.