The Court of Appeal have decided that changes to collective agreements do not bind a transferee following a TUPE transfer. In the case of Alemo-Herron and others v Parkwood Leisure the claimants were former employees of a local authority, who worked in its leisure services department until 2002. Their part of the authority’s undertaking (and with it the claimants) was then transferred to CCL Ltd, a private sector employer.
The claimants submitted that their contracts with the authority included a provision entitling them to pay increases negotiated ‘from time to time’ under the collective agreements negotiated between the trade union and the local authority employer even though they were no longer employed by the local authority.
The Employment Appeal Tribunal in 2009 had confirmed this to be the case. The Court of Appeal allowed the the appeal and the decision of the EAT was reversed.
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It seems that finally there is some common sense for employers following a TUPE transfer. Previously the new employer following a TUPE transfer continued to be bound by any changes to a collective agreement despite the fact they were not a party to such an agreement and had no right to participate in new pay negotiations. The result being that a third party (the previous employer) could agree increases to pay that would bind the new employer. This really was a ridiculous situation that was completely unworkable for the new employer. What do you think?…
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