TUPE and ETO defence

Q: My employment was transferred under TUPE five years ago, and my employer has just reduced my pay and increased my weekly hours so that my terms and conditions are the same as staff who did not transfer. I have been told that I may have a claim for unfair dismissal but that my employer may have an "ETO" defence. Can you explain what this is?

A: If you are dismissed because of a transfer that is protected by the Transfer of Undertaking (Protection of Employment) Regulations 1981 (TUPE), the dismissal is automatically unfair. But if your employer can show that you were dismissed for an "economic, technical or organisational (ETO) reason entailing changes in the workforce", the dismissal is not automatically unfair.

Even if the employer's ETO defence succeeds, this just establishes that there was a fair reason for the dismissal - a tribunal must still consider whether dismissal is reasonable in your circumstances.

But your employer may not have an ETO defence anyway: the Court of Appeal has said it is unfair for an employer to dismiss an employee simply in order to standardise all its employees' terms and conditions, since this does not entail a change to the workforce. The ruling was made in a case of constructive dismissal (Delabole Slate Ltd v Berriman [1985] IRLR 305), in which the claimant resigned rather than accept a large pay cut, but the principle applies to any form of dismissal.