Mr P MacMurray v Aegon UK Corporate Services Ltd: 3304563/2024
JUDGMENT
[1]The claimant’s claim for unfair dismissal under regulation 4(9) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 is not well-founded and is dismissed.[2]The claimant’s claim for unfair dismissal on the grounds of constructive dismissal is not well-founded and is dismissed.[3]The claimant’s claim for dismissal on the grounds of redundancy is well-founded but the claimant is not entitled to a redundancy payment.[4]The remedy hearing of 19-20 May 2025 is vacated.REASONS
[1]This is a claim for dismissal contrary to regulation 4(9) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) arising from the claimant claiming that there has been a ‘substantial change in working conditions to the material detriment of’ the claimant. In particular the claimant asserts that there are two such changes namely to his working location such that he would work permanently from home and to his medical insurance which would change from his daughters being covered until they were aged 25 to being covered to the age of 21.[2]In the alternative, the claimant presents a claim of unfair dismissal contrary to section 95(1)(c) of the Employment Rights Act 1996 (ERA 1996) arising from the same circumstances as the TUPE claim such that the changes amount to a breach of the implied term of trust and confidence in the contract with the respondent.[3]Further in the alternative, the claimant claims unfair dismissal on the grounds of redundancy contrary to section 98 of the ERA arising out of the same circumstances.[4]The respondent is a financial institution providing a range of financial and investment services. The claimant was employed by Anglia Building Society (Anglia) on 13 July 1987 as counter staff. Anglia merged with Nationwide Building Society (Nationwide) and the claimant was then employed by Nationwide from 1 April 1994 as a Financial Advisor. The TUPE transfer took place on 1 February 2024 at which point the claimant was employed by Aegon UK Corporate Services Ltd (the respondent). The claimant sent a letter of resignation to Nationwide on 30 January 2024 and he was placed on garden leave during his notice period with an effective date of termination of 30 April 2024.[5]The claimant contacted early conciliation via ACAS on 5 February 2024 with Nationwide and that process completed on 9 February 2024. The claimant then contacted early conciliation via ACAS on 26 February 2024 with Aegon Cofunds Administration and that process completed on 1 March 2024. The claimant further contacted early conciliation via ACAS on 25 April 2024 with the respondent and that process completed on 25 April 2024. The correct respondent is Aegon UK Corporate Services Ltd.[6]The respondent’s case is that the claimant was not dismissed as a result of regulation 4(9) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 because there was either no substantial change to the claimant’s working conditions or there was no material detriment to the claimant as a result of the changes.[7]The respondent further asserted that there was no dismissal as the claimant had resigned and if there was a dismissal, it was for a fair reason. Preliminary Matters[8]The claimant applied to amend his claim to include ordinary unfair dismissal. The facts relevant to ‘ordinary’ unfair dismissal were present on the facts as set out in the ET1. This was not opposed by the respondent. I considered the overriding objective in rule 3 of the Employment Tribunal Procedure Rules 2024 and my ability to make orders under rule 30 and determined that there was little or no prejudice to the respondent by permitting the claimant to amend his claim.[9]The respondent applied to amend the grounds of response to include capability as a reason for the dismissal. In light of the claimant’s application to amend he did not object to this application. I applied rule 30 and considered that there was no prejudice to the claimant in allowing the amendment and it was fair to permit the amendment in order to enable the case to proceed.[10]An application was made to hear evidence in private. The application was not opposed by the respondent. I considered rule 49 and the principles of open justice. The evidence which was the subject of the application was to be adduced by the claimant in support of his claim regarding why he viewed the health insurance change as detrimental. Having heard about the nature of the evidence I decided to hear the evidence in private in the course of the proceedings. Law[11]Regulation 4(2) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 provides: 4.— Effect of relevant transfer on contracts of employment(1) Except where objection is made under paragraph (7), a relevant transfer shall not operate so as to terminate the contract of employment of any person employed by the transferor and assigned to the organised grouping of resources or employees that is subject to the relevant transfer, which would otherwise be terminated by the transfer, but any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee.(2) Without prejudice to paragraph (1), but subject to paragraph (6), and regulations 8 and 15(9), on the completion of a relevant transfer— (a) all the transferor's rights, powers, duties and liabilities under or in connection with any such contract shall be transferred by virtue of this regulation to the transferee; and (b) any act or omission before the transfer is completed, of or in relation to the transferor in respect of that contract or a person assigned to that organised grouping of resources or employees, shall be deemed to have been an act or omission of or in relation to the transferee.[12]Regulation 4(9) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 provides: 4.— Effect of relevant transfer on contracts of employment (9) Subject to regulation 9, where a relevant transfer involves or would involve a substantial change in working conditions to the material detriment of a person whose contract of employment is or would be transferred under paragraph (1), such an employee may treat the contract of employment as having been terminated, and the employee shall be treated for any purpose as having been dismissed by the employer.[13]Section 98 of the Employment Rights Act 1996 provides: 98.— General.(1) In determining for the purposes of this Part whether the dismissal of an employee is fair or unfair, it is for the employer to show— (a) the reason (or, if more than one, the principal reason) for the dismissal, and (b) that it is either a reason falling within subsection (2) or some other substantial reason of a kind such as to justify the dismissal of an employee holding the position which the employee held.(2) A reason falls within this subsection if it— (a) relates to the capability or qualifications of the employee for performing work of the kind which he was employed by the employer to do, (b) relates to the conduct of the employee, (c) is that the employee was redundant, or (d) is that the employee could not continue to work in the position which he held without contravention (either on his part or on that of his employer) of a duty or restriction imposed by or under an enactment.(3) In subsection (2)(a)— (a) “capability” , in relation to an employee, means his capability assessed by reference to skill, aptitude, health or any other physical or mental quality, and (b) “qualifications” , in relation to an employee, means any degree, diploma or other academic, technical or professional qualification relevant to the position which he held.(4) Where the employer has fulfilled the requirements of subsection (1), the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer)— (a) depends on whether in the circumstances (including the size and administrative resources of the employer's undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and (b) shall be determined in accordance with equity and the substantial merits of the case.[14]Section 95 of the Employment Rights Act 1996 provides: 95.— Circumstances in which an employee is dismissed. (1) For the purposes of this Part an employee is dismissed by his employer if (and, subject to subsection (2) [...]1, only if)— (a) the contract under which he is employed is terminated by the employer (whether with or without notice), … (c) the employee terminates the contract under which he is employed (with or without notice) in circumstances in which he is entitled to terminate it without notice by reason of the employer's conduct.[15]Section 139 of the Employment Rights Act 1996 provides: 139.— Redundancy .(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to— (a) the fact that his employer has ceased or intends to cease— (i) to carry on the business for the purposes of which the employee was employed by him, or (ii) to carry on that business in the place where the employee was so employed, or (b) the fact that the requirements of that business— (i) for employees to carry out work of a particular kind, or (ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish.(2) For the purposes of subsection (1) the business of the employer together with the business or businesses of his associated employers shall be treated as one (unless either of the conditions specified in paragraphs (a) and (b) of that subsection would be satisfied without so treating them). (4) Where— (a) the contract under which a person is employed is treated by section 136(5) as terminated by his employer by reason of an act or event, and (b) the employee's contract is not renewed and he is not re-engaged under a new contract of employment, he shall be taken for the purposes of this Act to be dismissed by reason of redundancy if the circumstances in which his contract is not renewed, and he is not re-engaged, are wholly or mainly attributable to either of the facts stated in paragraphs (a) and (b) of subsection (1). (5) In its application to a case within subsection (4), paragraph (a)(i) of subsection (1) has effect as if the reference in that subsection to the employer included a reference to any person to whom, in consequence of the act or event, power to dispose of the business has passed.[16]I was referred to a number of authorities by both counsel for the claimant and the respondent. I was also provided with written submissions by both counsel. I have had regard to the submissions and authorities in reaching my decision The evidence before me[17]I was provided with a bundle of 411 pages and supplementary bundle of 152 pages for the final hearing provided by the respondent. There were witness statements from the claimant, Ms Mary Skinner and Ms Anna Hulton. I heard evidence from the claimant, Ms Mary Skinner and Ms Anna Hulton.[18]Having heard the evidence and read such documents as were referred to in the hearing bundle I made the following findings of fact. My findings of fact Regulation 4(9) TUPE Dismissal Relevant transfer[19]The claimant was employed as a Financial Planning Manager by Nationwide. It was accepted by all parties as an agreed fact that there was a relevant transfer within the meaning of TUPE Regulation 3 in that there was a transfer of Nationwide to the respondent on 1 February 2024. I found that there was a relevant transfer. Did the transfer of the claimant’s employment from Nationwide to the respondent involve a substantial change in working conditions to the material detriment of the Claimant? Substantial Change to Working conditions[20]I was referred to Tapare v South Maudsley NHS Trust UKEAT/410/08 at paragraph 44 and Abellio London Ltd v Mr A Musse and others and Centre West London Buses Ltd UKEAT/11/CEA at paragraph 22 in order to consider the meaning of ‘working conditions’. It was held in both cases that the definition of working conditions is wider than that set out in the contract.[21]There were two main reasons the claimant asserted were the catalyst for his decision to resign namely that he would be working from home post transfer and that his medical insurance for his daughters would end when they were 21 not 25 years old post transfer.[22]In order to determine whether these were in fact working conditions I was referred to the claimant’s employment contract with Nationwide dated 25 October 1994 pages 179-186 and the variation dated 11 August 1997 (page 187). In the 25 October 1994 contract clause 4 (the mobility clause) stated: ‘You are contracted at present to work at Hounslow in the South West London cluster. You will be expected to demonstrate reasonable flexibility in being temporarily deployed to other locations within the cluster. In addition the Society may require you to change your place of employment from time to time to locations within a travelling distance deemed to be reasonable by the Society, according to its business needs. This may be on a temporary or longer term basis.’[23]There is no dispute about this clause of the contract. The claimant asserted that there had been a variation to the contract on 11 August 1997 such as to remove clause 4 from any and all subsequent contracts between the claimant and Nationwide. It is clear from this agreement that the claimant was in a ‘mobile’ employment role as his title at the time was ‘Financial Consultant (Mobile)’. This clearly would involve the claimant not being solely based in the office. The addition of a clause regarding use of a Society (Nationwide) car only reinforces this position. I found that the claimant was in a mobile role from at least 11 August 1997.[24]The letter further stated that ‘I shall be grateful if you will now confirm that you accept this appointment on the terms outlined above by signing and returning to me the enclosed duplicate of this letter’. There were no further terms or conditions attached to the letter and none were put into evidence. On consideration of the status of the 1997 letter I found that there had been variations to the 1994 contract as to role, use of car and availability of healthcare. I did not find that this extinguished all other terms and conditions as were this to be the case, the claimant would not be entitled to, for example, contractual sick pay. It was clear that given the nature of the claimant’s role there would need to be a mobility clause in order for him to fulfil his role. I found that the mobility clause and all other clauses which were not expressly varied formed part of the 1997 contract.[25]In order to determine to what clause 4 of the contract was referring I considered the actions of the parties subsequently and whether there was any variation to the terms of the contract in the intervening period. I considered what the claimant’s working life was prior to his resignation. It was accepted that the claimant was in a hybrid working environment with a portion of time working from home and a portion in the office. It was accepted that post-Covid the claimant worked on a hybrid basis from 2021 to 2023. This was split between working from home, working in a branch office and visiting customers on home appointments. This equated to 2 days working from home and the rest of the week in the office. I found that the terms of the contract had been varied such as to make working from home an option as to location within the meaning of clause 4 of the 1994 contract.[26]The claimant first alerted the respondent to his concerns about working from home in the consultation document that was completed following a meeting with Mr McKenna on 13 October 2024 (pages 348-354). In this document the claimant responded to questions about the impact of working from home. His concern was about the use of WiFi for video meetings, the potential cost of having to upgrade and whether this cost would be met by the respondent. In the same document (page 353) the claimant also expressed concerns around his need for a standing desk due to his arthritis and whether the respondent would assist financially with providing one. Ms Hulton gave evidence that this was her understanding of the claimant’s concerns at the time of the grievance hearing.[27]The first documentary evidence of the claimant alerting the respondent to the issue he would have with working from home on the grounds of mental health was in his resignation letter dated 30 January 2024 sent to his line manager Matthew McKenna (pg 293) in which he stated: ‘My contract has been fundamentally changed from an office based role to a solely home working environment.’[28]The claimant was cross-examined about the existence of a Swindon hub owned by the respondent from which he could have worked post transfer as well as working from home. The claimant asserted that he was unaware that it would be available as a place of work post transfer. It was put to Ms Hulton in cross-examination that there was no Swindon hub available and if there were the claimant was unaware of its existence. She asserted that the Swindon hub was currently operational and had always been an option. Ms Hulton did accept that there did not appear to be anything in the bundle to suggest that the claimant was aware of this as she did not have direct knowledge of how or when it would have been communicated to the claimant. I found that the Swindon hub did become operational and is still operational. I found that the claimant’s perception at the time was that working at the Swindon hub was not an option which was available to him at the time.[29]Changing from a hybrid role to a role which would have involved only working from home would be a substantial change to working conditions. There was no evidence to contradict the claimant’s assertion that he worked two days in the office and the remainder of the week from home. The claimant asserted that his concern was that his mental health would suffer as a result of working solely from home. I found that there was a substantial change to his working conditions with regards to location.[30]The claimant asserted that private health insurance was a contractual right which transferred under TUPE. He further asserted that if this was not a contractual right then it was a benefit to which he was entitled and which should have transferred across in its Nationwide format under TUPE. I considered the nature of the health insurance, the claimant’s entitlement to the health insurance, the extent of the coverage and the age of dependents.[31]There was no evidence adduced as to whether the claimant had been in receipt of private medical insurance from 1987. The claimant’s contract from 25 October 1994 is silent on this fact such that I was unable to find that the option of private medical insurance was available to the claimant at that time. In the offer of a new position dated 11 August 1997 there was reference to entitlement to healthcare as follows: ‘You are eligible to join the Nationwide Healthcare Plan and I enclose details for your information. If you wish to take advantage of this, please complete the enclosed application form and return it to me.’[32]I found that the claimant was contractually entitled to private medical insurance however there was no evidence provided of the details of the medical insurance policy at the time. There was a letter dated 29 March 1999 (pg 188) addressed to the claimant inviting him to join the Society’s (Nationwide’s) Healthcare Plan which predated the birth of the claimant’s first child. This made reference to the following: ‘Enclosed is a CIGNA Handbook detailing how you can make the most effective use of this valuable Nationwide benefit.’[33]No evidence was provided of the CIGNA coverage and the coverage which the claimant asserted was his contractual right was BUPA coverage (pages 32-99 SB). I was provided with the Nationwide Healthcare and Protection Benefits Policy (pages 137-146) which set out the healthcare provision under Nationwide. The policy referred employees to Appendix 1 to determine their contractual eligibility criteria. It was accepted by all parties, as per Ms Skinner’s evidence, that the claimant was a member of career family D(a) as his employment commenced before 1 January 2004. This meant that he was contractually entitled to ‘Family cover’ as set out in the appendix. Evidence from the respondent namely Ms Hulton in cross-examination was that this entitlement would be honoured such that the claimant would still have been able to obtain family cover. This family cover would have been for the claimant and his dependents up to the age of 21 and would have been provided by the respondent. This cover would have started immediately upon the claimant transferring to the respondent under TUPE.[34]In the version history of the Policy (page 146) there had been a change to the Healthcare Scheme on 13 October 2011 during the period of employment by the claimant. This suggested that it was open to Nationwide to make alterations without affecting the contractual entitlement to private healthcare. I found that the claimant had a contractual entitlement to private health insurance such that this right transferred to the respondent in accordance with regulation 3 of TUPE. I did not find that the claimant had a contractual right or benefit with respect to the underlying insurance policy. There had been changes of the supplier of the medical insurance on at least one occasion which had not affected the claimant’s contractual right to that insurance. I did not find that the change to the underlying policy with respect to the BUPA cover amounted to a change in working conditions.[35]In the claimant’s grievance letter dated 19 January 2024 (page 283) he raised the issue of what he asserted was the less favourable healthcare coverage under the respondent when compared to his coverage under Nationwide. There was no mention made of the issue of the change from a hybrid working situation under Nationwide to home working under the respondent. Material detriment[36]I was referred to the cases of Tapare v South Maudsley NHS Trust UKEAT/410/08 and Abellio London Ltd v Mr A Musse and others and Centre West London Buses Ltd UKEAT/11/CEA. Both cases identify that that the relevant test is that the impact of the proposed change must be ‘considered from the employee’s point of view’ and whether the claimant viewed those changes as detrimental before the tribunal considers, objectively, whether it was reasonable for the claimant to adopt that position.[37]The claimant was cross-examined about the key issues raised by him in the consultation document with the respondent which represents the meeting on 13 October 2024 with his line manager, Matthew McKenna, at Nationwide (pages 348-354) and accepted that he had not mentioned issues about working from home in relation to his mental health. The claimant asserted that he had raised the issue on numerous occasions with Mr McKenna.[38]The claimant told me and I accepted that he had significant medical problems including arthritis and gastro-intestinal problems. He had his gall bladder removed and had an initial potential diagnosis of a serious neurological disorder. The claimant accepted having had his gall bladder removed in 2023 not 2024 as was initially set out in his witness statement. I found that it was removed in September 2023. He was hospitalised on one occasion and had persistent low back pain. He had persistent gastro-intestinal issues in 2024 which caused him to take over the counter medication. He was advised to stop using this medication which caused the issues to return.[39]In deciding whether there was a material detriment to the claimant I considered his perspective and then whether that was reasonable. I accepted the claimant's evidence that he was concerned about the isolation of working from home. However, it was clear that this was not the primary reason for his concern about working conditions. The claimant accepted under crossexamination that his primary concern was for his daughters to be covered by his health insurance under the same terms as before the transfer.[40]In assessing the detriment to the claimant I applied the test set out in Cetinsoy and others v London United Busways Ltd UKEAT/0042/14 as whether the claimant ‘regarded the changes as being to his detriment and if so whether a reasonable employee could have taken that view’. The claimant asserted that he was working while he was ill but accepted under crossexamination that this was only because he was taking Imodium to relieve his symptoms and that he had been advised by medical professionals not to keep taking the Imodium. The claimant accepted that he was only able to work as a result of taking the Imodium. I found that working from home would not therefore have led the claimant to view this as detrimental under those circumstances. Even if the claimant thought it was detrimental it was not reasonable for him to hold that view given the circumstances of his health at the time.[41]The claimant resigned prior to the TUPE transfer taking place which restricted the respondent in its ability to assist him. There were other options which could have been explored with the claimant were he to have remained under the employment of the respondent including the possibility of working at the Swindon hub.[42]I found that the claim for dismissal under regulation 4(9) of TUPE was not well-founded and should be dismissed. ‘Ordinary’ Unfair Dismissal Did any of the changes constitute a breach of the claimant’s contract of employment?[43]I have set out above what I considered in relation to the terms of the contract. I found that there was a mobility clause to be read into the complainant’s employment contract. I found that there was a clause entitling the claimant to family cover but not to the underlying health insurance policy.[44]The term of the contract in relation to health insurance was a term entitling the claimant to ‘family cover’. The respondent offered family cover to the claimant for his health insurance. I found that there was no breach of contract.[45]The term in relation to mobility formed part of the claimant's current employment contract and had been varied by Nationwide to provide for working from home as a location within the meaning of the mobility clause. The change from hybrid to home working was not a breach of the contract as it provided for a change to the location of the claimant’s place of work. I found that there was no breach of contract. If so, was the contract of employment repudiated by the respondent?[46]If I was incorrect and the change to permanently working from home was a breach of the contract I considered whether it was a repudiatory breach of the contract.[47]I heard evidence from the claimant about his hybrid working conditions with Nationwide immediately prior to the transfer. It was acknowledged that the claimant worked from home two days per week. The change to working from home full time did not amount to a repudiatory breach of the contract as it was not fundamental to the work being undertaken by the claimant.[48]Had the claimant remained employed by the respondent there would have been a possibility of working from the hub in Swindon. Ms Hulton’s evidence related to this point and she asserted that there would have been video meetings with customers as well as face to face visits with vulnerable customers at home. These were very similar requirements to the role held by the claimant prior to the transfer as set out in his witness statement at paragraphs 25 to 27. I found that if there was a breach it was not a repudiatory breach such that the claimant could treat the contract as terminated. Redundancy[49]I considered section 139(1)(a)(ii) ERA and whether the dismissal of the employee was ‘wholly or mainly attributable to the fact that his employer has ceased or intends to cease to carry on that business in the place where the employee was so employed’. It was agreed by all parties that the respondent intended to cease to carry on the business in the place where the claimant was so employed. As part of the transfer the respondent did not buy Nationwide’s premises. As a result Nationwide did not provide the respondent with permission for the respondent’s staff to operate out of Nationwide’s premises.[50]I considered the case of High Table Ltd v Horst and ors 1998 ICR 409, CA which requires a consideration of the factual circumstances of each case in order to ascertain the true place of employment. The claimant worked two days per week from home and the rest was split between Nationwide offices and home meetings with vulnerable customers. I found that the principal premises were home and Nationwide offices.[51]As a result of the transfer there would be no change to the home working aspect but there would to the Nationwide offices aspect. I found that the claimant was made redundant due to a change in workplace.[52]The respondent argued in the alternative that the claimant had refused an alternative job offer which would have been equivalent to his previous role. The respondent asserted that there was an alternative provided for the claimant to work out of the Swindon hub in order to provide transferring employees with the opportunity of working out of an office owned by the respondent in order to fulfil their roles.[53]The claimant presented his grievance on 19 January 2024 to Carly Kincell, Senior Case Consultant of Nationwide (page 283). The claimant submitted his resignation letter on 30 January 2024 (page 296) which was seven working days after he had presented his grievance. He was transferred to the respondent on 1 February 2024 and provided with a New Starter pack. I found that this constituted a job offer. The differences being those discussed above namely place of work and health insurance.[54]In evidence from Ms Hulton she was clear that the claimant had attended the meeting with redundancy in mind and she felt that there was nothing she could do to change his mind. The claimant, by cross-examination, asserted that he was unaware of the possibility of the Swindon hub being available as a place of work. The claimant in his evidence and prior to and throughout the grievance process had made it clear that his main issue was the health insurance coverage for his daughters. I found that this was the main issue causing concern for the claimant. There was no change to the claimant’s role and there was no evidence put forward that relocating to the Swindon hub would have caused significant extra travelling time or cost. In any event the mobility clause in the contract and the nature of the claimant’s role would have involved some travelling.[55]The claimant effectively refused this alternative offer of employment. I found that this was unreasonable in the circumstances as the short amount of time between the grievance and the resignation had not given the respondent enough time to address the claimant’s concerns regarding his place of work. Had the claimant remained in post the Swindon hub would have been available to him such as to allay his concerns about working from home on a permanent basis. The claimant’s role immediately prior to the transfer was a hybrid role which would not have changed post transfer. Redundancy Payment[56]While I found that the claimant’s role was redundant because the requirement respondent’s requirement for work to be done in Nationwide’s offices had ceased, I also found that he unreasonably refused an offer of suitable alternative employment, namely his previous role but based from home. Accordingly I did not find that he was entitled to a redundancy payment.Conclusion
[57]I found that the claim for dismissal under regulation 4(9) TUPE 2006 was not well-founded and has to be dismissed.[58]I found that the claim for unfair dismissal on the basis of constructive dismissal was not well-founded and has to be dismissed.[59]I found that the claim for dismissal due to redundancy was well-founded but the claimant was not entitled to a redundancy payment.[60]The remedy hearing of 19-20 May 2025 is vacated. Approved by