In Davies v Droylsden Academy UKEAT/0044/16/BA the claimant was employed by Schools Plus Limited (SPL) as a venue lettings manager.  SPL provided a service to educational institutions letting the institutions' premises out of school hours.  In June 2012 the claimant was appointed by SPL as the venue lettings manager of Droylsden Academy.  With effect from 1st November 2014 Droylsden Academy terminated its contract with SPL, having decided to carry on the business of letting its premises on its own behalf.  In other words, it decided to take the contract back in-house.  There was no dispute before the employment tribunal that this was a relevant transfer for the purposes of the TUPE Regulations.

However, the treatment of the claimant leading up to, and immediately after, this TUPE transfer was far from satisfactory.  The Academy had doubts about whether there would be a place for the claimant, in her capacity as a venue lettings manager, in its own structure going forward and ventured to say that the claimant might be redundant.  There was also an argument about whether the claimant was assigned to the service concerned for the purposes of her right to transfer under TUPE.  In the end, it was conceded that the claimant was assigned.  Discussions began, pre-transfer, about the possibility of a redundancy in the future.

The claimant might have resigned at this point, claiming constructive dismissal; but she did not, and the tribunal found that her employment transferred to the Academy on 1st November.  But still no arrangements were made for her to take up her employment with the Academy.  The employment tribunal found that the Academy had considered a redundancy procedure of sorts and had considered the pool for selection for redundancy but had concluded that the claimant was effectively in a pool of one, given the unique nature of her role in the School.  In the circumstances, the Academy felt it was appropriate to dismiss her by reason of redundancy.  This was confirmed on 11th March 2015 and the claimant was given a redundancy payment.

The employment judge concluded that the transfer was not the sole or principal reason for the dismissal.  Rather, the sole or principal reason for dismissal was an economic, technical or organisational reason entailing changes in the workforce.  This was because, it said, the reason for dismissal related to the claimant's role being redundant as a result of the restructure.  The employment judge went on to find that the dismissal by reason of redundancy was fair, that the conclusion that the claimant was in a pool of one was the correct one, that the consultation conducted by the Academy was adequate, and that it had (albeit unsuccessfully) looked for suitable alternative employment.  The claim for unfair dismissal was rejected.

On appeal to the EAT, the EAT did not disturb this finding.  In particular, the EAT (Simler J) took the opportunity to analyse the process in deciding whether, in TUPE transfer cases, the reason for the dismissal is the transfer, or an ETO reason entailing changes in the workforce.

First, she said, the onus is on the dismissing employer to establish the ETO reason.  According to Simler J., "an "organisational reason" can include a reason relating to the management or organisational structure of the incoming business".  Secondly, the dismissing employer must show that the reason entails a change in the workforce.  "That is to say, the reason must necessarily entail changes in the workforce; if the employer's plan is to achieve such changes in the workforce and such changes are an objective of the plan that would suffice.  On the other hand, it would be insufficient if such changes were merely a possible consequence of the employer's objective or plan".  According to Simler J: "So far as the meaning of "changes in the workforce" is concerned, this means that either changes in the numbers of the workforce overall or in the functions of members of that workforce.  Changes in the identity of the individuals who make up the workforce do not constitute changes in the workforce itself so long as the overall numbers and functions of the employees looked at as a whole remain unchanged".

The case illustrates that a genuine redundancy will be a paradigm case of an economic, technical or organisational reason for dismissal which entails a change in the workforce.