01-03-2010
Collective agreements only go so far where TUPE is concerned
The complex question of whether employers who take on staff by TUPE transfer, can be bound by subsequent changes to pre-existing collective agreements, has recently been unravelled by the Court of Appeal.
In Alemo-Herron and Others v Parkwood Leisure Limited, Mr Alemo-Herron and his colleagues had been employed by the London Borough of Lewisham leisure department since 2002. In 2004 he and a number of his colleagues TUPE transferred to Parkwood Leisure (Parkwood).
The workers' employment contracts provided that their terms and conditions (including pay increases) were in accordance with collective agreements negotiated by the National Joint Council for Local Government Services (NJC).
The Employment Appeal Tribunal (EAT) decided that if a private sector employer inherited employees under TUPE, they should enjoy the benefit of any future pay rises negotiated by their trade union under a collective agreement. Consequently, an employer that inherited staff via a TUPE transfer could be bound by future negotiations between the old employer and the trade union. This was even though the new employer would not be party to those negotiations, and would have no input into them whatsoever.
Parkwood took the decision to the Court of Appeal which upheld its case. It concluded that employers who take on outsourced contracts are not bound by future pay increases negotiated after a TUPE transfer by a former public sector employer.
This is a very welcome decision for employers who are involved in TUPE transfers with employees who are party to collective agreements. Employers can now be confident that any collective agreements they inherit at the time of a transfer cover the extent of their liabilities.
In Alemo-Herron and Others v Parkwood Leisure Limited, Mr Alemo-Herron and his colleagues had been employed by the London Borough of Lewisham leisure department since 2002. In 2004 he and a number of his colleagues TUPE transferred to Parkwood Leisure (Parkwood).
The workers' employment contracts provided that their terms and conditions (including pay increases) were in accordance with collective agreements negotiated by the National Joint Council for Local Government Services (NJC).
The Employment Appeal Tribunal (EAT) decided that if a private sector employer inherited employees under TUPE, they should enjoy the benefit of any future pay rises negotiated by their trade union under a collective agreement. Consequently, an employer that inherited staff via a TUPE transfer could be bound by future negotiations between the old employer and the trade union. This was even though the new employer would not be party to those negotiations, and would have no input into them whatsoever.
Parkwood took the decision to the Court of Appeal which upheld its case. It concluded that employers who take on outsourced contracts are not bound by future pay increases negotiated after a TUPE transfer by a former public sector employer.
This is a very welcome decision for employers who are involved in TUPE transfers with employees who are party to collective agreements. Employers can now be confident that any collective agreements they inherit at the time of a transfer cover the extent of their liabilities.
