Local Government - May 2009

The Employment Appeal Tribunal has recently had to decide whether an employer who takes on employees under a TUPE transfer could be bound by pay rises negotiated by the previous employer with a trade union under a collective agreement, after the transfer date, even though the new employer was not involved in the negotiations.

In 1996, a UK case (Whent v Cartledge) decided that employers could be bound by those negotiations despite the apparent unfairness and additional costs to the employer. However, in 2006 the European Court decided that employers could not be responsible for changes to employees’ contracts where the amendments were negotiated and agreed post transfer under a collective agreement (Werhof v Freeway).

In Alemo-Herron v Parkwood Leisure, the EAT had to decide between the Whent and Werhof approaches. The original Tribunal decided in favour of Werhof  but the Appeal judge preferred the Whent approach. 

Permission was given to appeal to the Court of Appeal (expected this summer) but in the meantime employers are stuck with the UK position which is likely to have significant financial consequences for employers who will be bound by agreements between Unions and other employers which they have had no input in to.

Phil Pepper, Associate
philip.pepper@weightmans.com