I have recently been advising a client in relation to a TUPE+ transfer. It was accepted that TUPE applied and that this meant the terms and conditions of the employees had to be maintained. The employees were transferring over from the public sector and part of their terms and conditions made reference to collective agreements negotiated from time to time.
Now I had thought that after Werhof v Freeway Traffic Systems GmbH and Co KG [2006] IRLR 400 any collective agreements entered into after the transfer that the transferee was not a party to would not bind the transferee. In layman’s terms you get the knowns not the unknowns. All very sensible and a good for employee/employer relations and freedom of association.
Then along comes Alemo-Herron and ors v Parkwood Leisure Ltd. [2009] IRLR 322. This case involved a TUPE transfer from public to private sector with the transferring employees having the ‘collective agreement term as negotiated from time to time’ clause in their contracts. The problem is that the private sector transferee would not be a party to any future collective agreements. The Tribunal followed Werhof adopting a practical and European approach to the decision.
The EAT allowed the appeal based on the UK regulations rather than the EC directive. The EAT decided that the case turned on the wording of the contract but also on the fact that collective pay bargaining UK style was different from that used on the continent. The EAT saw no problem with a clause that entitled the employee to have his wages set by some external benchmark arrived at by collective bargaining. The EAT accepted that so long as the NJC was in existence then the pay levels set by the NJC would apply even though the transferee had not and more importantly could not take part in the negotiation.
This will have far reaching implications for private sector bidding for public sector work as this clause is commonly found in local authority contracts of employment. This decision effectively takes negotiations in relation to important terms as to pay and conditions outside of the control of the new employer. No wonder leave to appeal has been granted!
Peter D
Now I had thought that after Werhof v Freeway Traffic Systems GmbH and Co KG [2006] IRLR 400 any collective agreements entered into after the transfer that the transferee was not a party to would not bind the transferee. In layman’s terms you get the knowns not the unknowns. All very sensible and a good for employee/employer relations and freedom of association.
Then along comes Alemo-Herron and ors v Parkwood Leisure Ltd. [2009] IRLR 322. This case involved a TUPE transfer from public to private sector with the transferring employees having the ‘collective agreement term as negotiated from time to time’ clause in their contracts. The problem is that the private sector transferee would not be a party to any future collective agreements. The Tribunal followed Werhof adopting a practical and European approach to the decision.
The EAT allowed the appeal based on the UK regulations rather than the EC directive. The EAT decided that the case turned on the wording of the contract but also on the fact that collective pay bargaining UK style was different from that used on the continent. The EAT saw no problem with a clause that entitled the employee to have his wages set by some external benchmark arrived at by collective bargaining. The EAT accepted that so long as the NJC was in existence then the pay levels set by the NJC would apply even though the transferee had not and more importantly could not take part in the negotiation.
This will have far reaching implications for private sector bidding for public sector work as this clause is commonly found in local authority contracts of employment. This decision effectively takes negotiations in relation to important terms as to pay and conditions outside of the control of the new employer. No wonder leave to appeal has been granted!
Peter D
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