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Wait continues for critical TUPE decision

17 June 2011

The Supreme Court has referred to the Court of Justice of the European Union Parkwood Leisure Ltd v Alemo-Herron on an issue about collective agreements on a TUPE transfer.

Certain terms of employment including pay rates were determined by nationally negotiated collective agreements between local authorities and the relevant unions. The question is: do changes to such collective agreements made after a TUPE transfer bind the transferee (‘dynamic’ interpretation), or does the transferee only have to comply with the terms of the collective agreement at the time of the transfer (‘static’ interpretation).

Muddled case law sits behind this. The ECJ have used the static interpretation (Werhof v Freeway Traffic Systems); domestic courts (Whent v T Cartledge Ltd) have taken the dynamic approach.

The Claimants will say their contracts entitle them to any changes made by collective agreements post-transfer (including pay increases). The employers will argue that is unfair because they have no say in what those changes are.

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