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Liverpool Law Review

, Volume 17, Issue 2, pp 197–205 | Cite as

The employer right to make unilateral changes to existing contracts of employment and the EC regulated transfers directive

  • Kevin Wardman
Article

Keywords

Employment Protection Economic Entity Organisational Reason Draft Proposal Justification Defence 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. 1.
    Council Directive 77/187/EEC of 14th February 1977, incorporated into U.K. law by the Transfer of Undertakings Regulations 1981 as amended by the Trade Union Reform and Employment Rights Act 1993; hereinafter referred to as the Directive.Google Scholar
  2. 2.
    Article 4(1) of the Directive.Google Scholar
  3. 3.
    [1993] I.R.L.R. 133, followingDr Sophie Redmond Stichting v.Bartol [1992] I.R.L.R. 336, ECJ and theSpijkers Case 24/85.Google Scholar
  4. 4.
    In either the public or private sector,Dr Sophie Redmond Stichting v.Bartol [1992] I.R.L.R. 336, ECJ.Google Scholar
  5. 5.
    European Commission proposals for a re-drafting of Directive 77/187 adopted by the Commission on 8th September 1994 (hereinafter referred to as the New Draft Proposals) would specifically exclude an activity transferred which does not attach to an economic entity (see Draft Proposal for a Directive (1994) Article 1 (1)). The precise meaning of this exclusion is unclear, but it appears to be an attempt to make a distinction between a particular organisational activity—for example the provision of catering services for employees, which could constitute an economic entity—and an individual job activity carried on within that organisational function—for example, contracting out of the making of sandwiches, which would not be sufficient to constitute an economic activity. There needs to be a “self contained set of elements pursuing a specified economic (organisational) objective”, para. 18. It is apparent, however, that, at the moment, most forms of “contracting out” and “market testing” will be covered.Google Scholar
  6. 6.
    Supra n.3.[1993] I.R.L.R. 133, followingDr Sophie Redmond Stichting v.Bartol [1992] I.R.L.R. 336, ECJ and theSpijkers Case 24/85.Google Scholar
  7. 7.
    Kenny v.South Manchester College [1993] I.R.L.R. 265, amongst others.Google Scholar
  8. 8.
    Most recently shown inCharlton v.Charlton Thermosystems [1995] I.C.R. 56 following the earlier decisions ofRask v.ISS Kantineservice A/S [1993] I.R.L.R. 133,Dines v.Initial Services [1993] I.C.R. 978,Kenny v.South Manchester College [1993] I.C.R. 935, at 940.Google Scholar
  9. 9.
    M. Rubenstein, “Editorial”,Industrial Relations Law Review 23/7 (1994), 315.Google Scholar
  10. 10.
    Supra n.3. [1993] I.R.L.R. 133, followingDr Sophie Redmond Stichting v.Bartol [1992] I.R.L.R. 336, ECJ and theSpijkers Case 24/85.Google Scholar
  11. 11.
    As discussed inAllan v.Stirling D.C. [1994] I.C.R. 434, at 439.Google Scholar
  12. 12.
    Also confirmed inKenny v.S. Manchester College [1993] I.C.R. 934, at 941.Google Scholar
  13. 13.
    Article 4 (1).Google Scholar
  14. 14.
    Either directly or constructively in accordance with Article 4(1), that is, substantial changes in working conditions which are to the detriment of the employee showing the employer to be, thereby, responsible for the dismissal.Google Scholar
  15. 15.
    In the sense of being an admissible reason to dismiss under Section 57(2) of the Employment Protection Consolidation Act 1978; now added to by Article 4(1) where they are dismissals for economic, technical or organisational reasons requiring changes in the work force.Google Scholar
  16. 16.
    Supra n3. [1993] I.R.L.R. 133, followingDr Sophie Redmond Stichting v.Bartol [1992] I.R.L.R. 336, ECJ and theSpijkers Case 24/85.Google Scholar
  17. 17.
    Ellis v.Brighton Co-operative Society [1976] I.R.L.R. 419,George Wimpey v.Cooper [1977] I.R.L.R. 205,Hollister v.National Farmers Union [1979] I.C.R. 542,Chubb Fire v.Harper [1983] I.R.L.R. 311,Evans v.Elemeta Holdings [1982] I.C.R. 323,Gilham v.Kent County Council (No 2) [1985] I.C.R. 233,Murphy v.Epsom College [1985] I.C.R. 80.Google Scholar
  18. 18.
    [1994] I.R.L.R. 136.Google Scholar
  19. 19.
    Suggested as being a suitable criterion for determining whether or not the employer defence under Article 4(1) of economic, technical or organisational reasons entailing a change in the workforce, would have an application.Google Scholar
  20. 20.
    Either short of dismissal, or for dismissals that follow any changes under “some other substantial reason” contained in Section 57(1)(b) of the Employment Protection Act 1975.Google Scholar
  21. 21.
    This may be a better case for an employer to argue than economic, technical or organisational reasons under the Directive.Google Scholar
  22. 22.
    Article 4(1) of the Directive.Google Scholar
  23. 23.
    [1985] I.C.R. 546.Google Scholar
  24. 24.
    This has led to the criticism that “the more disadvantaged an employee is by the change, the less well protected he is”, J. McMullen, “Takeovers, Transfers and Business Re-Organizations”, 21/1Industrial Law Journal (1992), 24. This approach, however, has been followed in other U.K. decisions, most notablyLane v.Dyno Rod plc [1985] COIT 17833/85, alsoCrawford v.Swinton Insurance Brokers [1990] I.C.R. 85.Google Scholar
  25. 25.
    [1992] I.R.L.R. 136.Google Scholar
  26. 26.
    If the current (1994) Draft proposals of the Commission for changes to be made to the Directive are accepted, this will further limit any application of Article 4 in that Member States would be allowed to provide that the protection against a transfer related dismissal will only be available to those who qualify for unfair dismissal protection (in the U.K., two years' continuous employment).Google Scholar
  27. 27.
    Principally one of “ensuring peaceful and consensual economic and technological restructuring whilst allowing organisations to pursue objectives specific to a market economy of establishing the most appropriate sites of businesses capable of implementing the large-scale economic operations which a large market is likely to require.” SeeEuropean Commission Proposals For A Directive Amending Directive 77/187 Sept 1994.Google Scholar
  28. 28.
    [1993] I.R.L.R. 486.Google Scholar
  29. 29.
    The providing of paediatric and neo-natal services.Google Scholar
  30. 30.
    FollowingForeningen af Arbejdsledere i Danmark v.Daddy's Dance Hall A/S [1988] I.R.L.R., 315, E.C.J.Google Scholar
  31. 31.
    Supra n.23. [1985] I.C.R. 546.Google Scholar
  32. 32.
    What appears to have occurred is an alteration in the employer's requirements for employees to do work of a particular kind,Murphy v.Epsom College [1985] I.C.R. 80. This will amount to a redundancy situation.Google Scholar
  33. 33.
    Supra n. 15. In the sense of being an admissible reason to dismiss under Section 57(2) of the Employment Protection Consolidation Act 1978; now added to by Article 4(1) where they are dismissals for economic, technical or organisational reasons requiring changes in the work force.Google Scholar
  34. 34.
    Under Section 57(1)(b) of the Employment Protection Consolidation Act 1975.Google Scholar
  35. 35.
    Ibid. Under Section 57(1)(b) of the Employment Protection Consolidation Act 1975, section 57(3).Google Scholar
  36. 36.
    Cresswell v.Board of Inland Revenue [1984] I.C.R. 508, and alsoDryden v.Greater Glasgow Health Board [1992] I.R.L.R. 469, recognising an employer's discretion to establish working rules.Google Scholar
  37. 37.
    Falling within an acceptable band of reasonableness as set out by Browne-Wilkinson, P., inIceland Frozen Foods v.Jones [1982] I.R.L.R. 439.Google Scholar
  38. 38.
    Ellis v.Brighton Co-operative Society Ltd [1976] I.R.L.R. 419, subsequently modified inHollister v.National Farmers' Union [1979] I.C.R. 542.Google Scholar
  39. 39.
    Chubb Fire Security v.Harper [1983] I.R.L.R. 311.Google Scholar
  40. 40.
    Polkey v.A E Dayton Services [1988] I.C.R. 142.Google Scholar
  41. 41.
    Article 6. An area where the U.K. Government has recently come in for criticism in not meeting the requirements of the Directive, seeCommission of the European Communities v.United Kingdom [1994] I.C.R. 664, at 710, which will require changes to be made to existing U.K. law shortly, seeThe Commission New Draft Proposals 8 September 1994.Google Scholar
  42. 42.
    This is envisaged by the Directive in Article 6, at least where there is an independent trade union recognised by the employer. The requirement for a recognised independent trade union is not contained in the Directive, but where no employee representatives exist Member States may require that employees concerned must be informed in advance of at least the date of any intended transfer. This has not been expressly incorporated into the U.K. Regulations though clearly it would be an important factor when assessing an employer's reasonableness within section 57(3) of the Employment Protection (Consolidation) Act 1975.Google Scholar
  43. 43.
    [1992] I.R.L.R. 136.Google Scholar
  44. 44.
    supra n.9.Google Scholar
  45. 45.
    There will, in the near future, be a presumption of economic, technical or organisational reasons within the Directive, existing where elected employer representatives by agreement change the terms and conditions of employment as a means of ensuring the survival of an undertaking,New Draft Proposals Articles 4(3) and (4).Google Scholar
  46. 46.
    It will be important, at the current talks under way between the U.K. Government and the Commission regarding theNew Draft Proposals for amending the Directive, that a clearer definition be given to what amounts to economic, technical or organisational reasons for purposes of Article 4, for at the moment there are no plans to alter this in theNew Draft Proposals Articles 4(3) and (4).Google Scholar

Copyright information

© Deborah Charles Publications 1995

Authors and Affiliations

  • Kevin Wardman
    • 1
  1. 1.Liverpool John Moores UniversityUK

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