Share Tweet Share

What is an ETO reason?

An ETO reason is an economical, technical or organisational reason applied in order to make changes to staff or terms and conditions, following a TUPE transfer.

A TUPE is a set of rules set by UK law to ensure the protection of employment rights of staff, in a situation where the organisation they are working for is transferred or sold to someone else. It is one law that also covers the employees who are working on contractual terms. The law ensures that the existing tenure of service, along with the rights and benefits of employees, remain the same when the employer changes.

As per the rule, the staff who are dismissed from service for a reason related to TUPE transfer can claim for an unfair dismissal automatically. It should however be noted that the employer can defend such a claim if they are able to prove the dismissal under an ETO reason.

The domain of an ETO reason is limited to certain regulations. It has been made clear that the ETO reason must relate to organisational roles of the staff members. A mere effort to harmonise the terms and conditions of employment with the members of present staff is not enough.

Various people filing for Employee tribunal claims are not aware of this new set of rules, meaning that a well-planned change of location can be easily counted as an ETO reason.

As per UK law, if the employer needs to alter the terms of employment of staff they should be able to prove that the changes are for an ETO reason. A failure to demonstrate the same can result in the changes to be deemed invalid.

The rule is created with the sole intention to protect the staff who are transferred to a new employer and ensure that they can only be dismissed or have their employment rules changed for a very clear business reason.

For example:

Company A has inherited a new company with a group of 25 staff members under TUPE. The employer issues these staff members with a new set of rules, which is similar to the ones given to other staff members. However, the terms of the new contract are found to be less beneficial by the staff, compared to the terms laid out by the previous employer. Due to no ETO reason, the changes can be deemed ineffective and the staff can retain their right to claim their previous employment terms.

Few days later, the company A carries out a reorganisation of the staff members to better suit the business, and this leads to the transferring of some staff members, which would otherwise be made redundant. In this scenario, the company A has carried out a fair process which includes selection of both existing, as well as new employees, for transfer. Hence, the dismissal is considered fair and for an ETO reason.

If you think your employer has dismissed you for a reason other than an ETO, or if you are not sure whether you have the right to file a claim, you can meet an employment solicitor for employment law advice. There are a myriad of reputed no win no fee employment lawyers in the UK who will provide you with sound and unbiased advice and also help you file the required claims.