TUPE: Court of Appeal overturns decision on collective
agreements
Last year in employment law news we reported on an EAT
decision that employers who take on staff from another employer
under the Transfer of Undertakings (Protection of Employment)
Regulations (TUPE) are bound not only by collective agreements in
force when the transfer took place, but also ones renegotiated
afterwards if, prior to the transfer, they were incorporated
into contracts of employment. The problem with this is that the new
employer may not be a party to the collective agreement and may
have no power to influence the decisions made. The good news for
employers is that the Court of Appeal has now overturned this and
other decisions, confirming that a 2006 European case on this issue
– in which the new employer was bound only by the collective
agreement in force at the time of the transfer – applies in the UK.
According to the Court of Appeal, there is nothing to suggest that
the UK Government had intended the TUPE regulations to grant
greater rights to employees than those under the European
Directive. Therefore, in relation to transferred employees, the new
employer is not bound by new collective terms which are negotiated
by third parties after the date of the transfer.
However, care may need to be taken: if
transfers occurred several years ago, and transferee employers have
always implemented the changes when collective agreements were
renegotiated, employees may potentially argue that their contract
has been varied by conduct to include such renegotiations.
Employers in this situation will need to take our advice. Employers
involved in transfers from now on should make clear that they do
not intend to be bound by future renegotiations.
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