Does TUPE Set Employees’ Terms and Conditions in Stone?
Not always: Employers can change the terms and conditions of employees who transfer under TUPE if the reason is not related to the transfer
If you have fact-based reasons for wanting to change something in the contractual terms of employees who have transferred to your organisation under TUPE, then it may be possible to change these terms. This case highlights how a genuine reason, unrelated to the transfer itself, can allow employers to break free of outdated Ts & Cs inherited under TUPE.
Tabberer & others v Mears Limited
The case involved the transferred employees’ historic entitlement to an ‘Electrician’s Travel Time Allowance’ (ETTA), which they’d had since the 1950s. Their new employer described this allowance as “unjustified and outdated” and subsequently changed their contracts to remove the employees’ entitlement to it. The electricians argued that TUPE prevented their new employer from altering their terms of employment and therefore the ETTA should not have been removed.
The Employment Appeal Tribunal (EAT) found the reason for changing their contract was unrelated to the recent TUPE transfer. From the employers’ point of view, ETTA was both potentially costly and unfair on their other employees. A genuine reason – as opposed to a TUPE one.
Bending the rules of TUPE
TUPE stands for Transfer of Undertakings (Protection of Employment) Regulations 2006 and applies where there has been a “relevant transfer”. It covers two types of event:
- A transfer of a business, undertaking or part of a business or undertaking where there is a transfer of an economic entity that retains its identity (a “business transfer”)
- A client engaging a contractor to do work on its behalf, reassigning a contract or bringing the work “in-house” (a service provision change (“SPC”)
Where employees transfer to a new employer under TUPE the new employer steps into the shoes of the old employer, and the employees continue their employment with their old terms and conditions intact. However, authentic non-TUPE reasons make it possible to change outdated Ts & Cs. Each case is decided on its own facts, and it is very difficult for the EAT to overturn a Tribunal’s decision if it is genuinely fact-based.
This will give heart to employers but it does not change the law. It’s here where we come in – seeking legal advice is invaluable in these situations, because understanding the law before acting to change Ts & Cs in a similar situation will minimise the likelihood of successful claims.
How can Freeths help your business?
If you have recently purchased a business or won a new contract, you may be wondering if/when you can change your transferred employees’ contracts. Something in their old contract may clash with, or even be detrimental to, your business model. If alarm bells are ringing, our experienced Employment team are here to help. Give us a call for cutting-edge legal advice.
The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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