Miles v Insitu Cleaning Co Ltd (Transfer of Undertakings : Economic technical or organisational reason)

An employer can rely on the economic, technical or organisational exception only where the changes in workforce numbers or functions form part of the reason for dismissing the particular employee. Changes affecting other workers, but not the employee dismissed, cannot establish that exception in that employee’s case.

A change in functions must be real and significant. A minor or minimal change will not suffice. Whether a proposed change meets that threshold is a question for the tribunal on the evidence. Where a tribunal relies on more than one proposed change, it must resolve a disputed issue as to whether each material change applied to the employee and assess its significance.

The claimant, a cleaner, transferred to the respondent under the Transfer of Undertakings (Protection of Employment) Regulations 2006. The respondent later proposed revised cleaning arrangements, including window-cleaning duties and removal of keyholder responsibilities. The claimant rejected the proposals and was dismissed.

The Employment Tribunal held that the dismissal was connected with the transfer and that there was an economic, technical or organisational reason entailing changes in workforce functions. It relied on the window-cleaning and keyholder changes, and dismissed the unfair-dismissal claim.

On appeal, the claimant contended that the Tribunal had failed to decide whether the keyholder change applied to her and whether it was more than minor or minimal. She also challenged the significance of the window-cleaning duty.

1. Appeal allowed and remitted. The Tribunal erred in law by relying on the keyholder change without deciding the claimant’s evidence that the respondent had proposed she should retain her keyholder arrangements.
2. For the purposes of paragraph 7(2) of the Transfer of Undertakings (Protection of Employment) Regulations 2006, an ETO reason entails a change in workforce numbers or functions, whether across the whole workforce or a relevant section of it. The EAT applied Berriman v Delabole Slate Ltd, [1985] ICR 546, and the subsequent authorities on that proposition.
3. The statutory issue concerned the reason for this claimant’s dismissal. A change relied on as part of the ETO reason could not assist the respondent if it was not intended to apply to her. Otherwise, an employer could make changes to other employees while making none to the dismissed employee, yet invoke an ETO reason for that dismissal.
4. The Tribunal was also required to decide whether any keyholder change affecting the claimant was significant rather than minor or minimal. If it did not apply to her, or was not significant in itself, the Tribunal had to assess whether the changes as a whole nevertheless amounted to sufficient changes in workforce functions.
5. The challenge concerning window cleaning failed. The Tribunal was entitled to accept the claimant’s own evidence that the new duty would take four to five hours weekly and to find that this was a significant, rather than minimal, additional function.
6. The case was remitted to the same Tribunal to determine those matters.

• Employment Appeal Tribunal: Allowed the appeal against the substantive unfair-dismissal decision and remitted the ETO issue to the same Employment Tribunal.
• Employment Tribunal, Watford: Rejected the claimant’s unfair-dismissal claim. It found an ETO reason entailing changes in workforce functions and held the dismissal fair.
• Employment Appeal Tribunal (review application): The claimant’s separate appeal concerning refusal of a review was dismissed at a rule 3(10) hearing as having no reasonable prospects of success.