The EAT rejected the former administrators` appeal, noting that TUPE was intended to protect, not improve, temporary labour rights. In the present case, the amendments were clearly linked to the contribution and were null and void, even if they were made in favour of the transferred workers. The EAT distinguished an earlier case that allowed for beneficial changes, as the TUPE regulations had changed later. In addition, the changes in contract law were declared invalid by the general principle of abuse of EU LAW – there was no legitimate economic objective in the amendment of the contract. An ETO reason may also be acceptable if the employee is offered a different type of role or if the new company is located in a different location. It is important to note that to be valid, an ETO reason must have occurred anyway (i.e. not as a direct result of the merger or acquisition), and it must be carried out in a fair and balanced manner among all employees (i.e. not just those taken over by the new employer). Your new employer can use these areas to make changes to your terms and conditions of employment, but you, as an employee, must accept the change(s). • A change in the workforce function could include a new requirement for an employee who held a management position to assume a non-executive role, or a change from a secretarial position to a sales position Your employer may want to change your employment contract for an “economic, technical or organizational” (ETO) reason. According to the law, they can agree with you if there is also a change in the workforce, for example restructuring or layoffs.
Your new employer may have valid reasons to agree on contract changes with you. For example, if the business requirements have changed for reasons that are not related to the transfer. The rules also apply when the commercial contract on which they work or part of the company for which they work is transferred from one employer to another. It is possible to refuse a new position offered by your new employer, known as “opposition to transfer”, but this may limit your rights under TUPE. Even if an ETO ground applies, the employer must act reasonably and correctly follow the relevant legal procedures to make the changes, or risk claims for unfair dismissal. The provisions are binding on all employers, regardless of their size and sector of activity, when a relevant business transfer takes place. Any insistence by an employer that an employee accept new terms or be fired can automatically be considered an unjustified dismissal. There are limited circumstances in which the conditions may be changed, one of which is that the terms of a collective agreement are adopted (i.e.
negotiated through a trade union), provided that the amendment takes effect more than one year after the date of the transfer and that the different conditions “when taken together” are no less favourable to the workers. However, this is quite rare in practice. The only way for your new employer to harmonize the terms and conditions of all members of the company is to improve them. This may include, for example, an increase in annual leave. You should note that your new employer will still need to get approval for these changes, even if they are positive changes. They will do so either by obtaining the consent of the workers or by discussing with the representatives of the workers or the trade unions. In some cases, you may want to negotiate a new contract with your new employer, but you won`t be part of the pool of transferred employees, putting you outside the scope and protection of TUPE. Your employer cannot validly impose new conditions without the consent of the employees. Any amendment must be approved by the employee or his union representatives on his behalf. If your employer has recently been acquired or merged with another company, you may have been informed that your job will be transferred under TUPE. In today`s modern business world, mergers and acquisitions are common as companies try to gain a larger market share or offer new products or services.
More recently, the news was filled with the acquisition of the British chipmaker Arm from the American company NVIDIA. Workers therefore have the legal right to change employers in accordance with their existing working and employment conditions and all their existing rights and obligations, although there are special provisions on old-age pensions under the occupational pension scheme. Eto reasons (economic, technical or organisational reasons) are those related to the number of staff numbers and role functions required by the new employer. If, for economic, technical or organisational reasons, an employer can make a strong case for amending a contract, it may be legally able to do so. One of the economic reasons to change a contract can be a significant financial loss due to COVID-19. A technical reason may exist if the new employer has implemented new technology that has significantly reduced the number of employees in a particular type of role. And an organizational reason may be related to an ongoing restructuring process within the organization. ETO stands for “economic, technical or organizational”. Courts have tended to interpret the scope of the ETO`s reasons restrictively.
Case law has established that an ETO reason must generally relate to the number and duties of employees. More recently, however, it has been suggested that a “change in the workforce” could include other changes, such as. B as the skills or qualifications required to perform the work. . . .