Employees walking in line Home | News & events | Legal updates | Supreme Court to consider the question of collective agreements on a TUPE transfer

Supreme Court to consider the question of collective agreements on a TUPE transfer

21 June 2010

Companies considering tendering for public sector work where employees’ terms and conditions are governed by collective agreements will be concerned to hear that the Supreme Court has granted permission for an appeal in the Alemo-Herron case.

Employers breathed a sigh of relief in February this year when the Court of Appeal ruled in the case of Alemo-Herron & Ors v Parkwood Leisure Limited that contractors who take on staff as a result of a TUPE transfer are not bound by new collective agreements negotiated by third parties after the transfer.

In a development that will create unwelcome uncertainty for contractors and other employers, we understand that the Supreme Court has just granted permission for leave to appeal in the Alemo-Herron decision.

The Employment Appeal Tribunal adopted a “dynamic” approach to collective agreements and found that a private employer remained bound by the terms of a collective agreement that was re-negotiated after employees had TUPE transferred to it from a local government employer and it had played no part in the negotiations of the new terms.

The Court of Appeal overturned that decision and followed existing European case law to restore the “static” approach to collective agreements. As the law currently stands therefore, although the terms of collective agreements will transfer to a new employer on a TUPE transfer the terms will not apply indefinitely but only until such time as the collective agreement expires, terminates or is replaced.

Employers will be hoping that the Supreme Court upholds the Court of Appeal’s decision but it is possible that it will feel it necessary to refer questions to the European Court and this will result in further unwelcome delay before the legal position can be clarified.

© Shoosmiths. This page is for general information: it is not legal advice. Please read our full terms and conditions for details of the disclaimers and exclusions which apply.

Get in touch

Michael Tremeer

Solicitor
T: 03700 86 8914
I: +44 (0)118 965 8914
E: michael.tremeer@shoosmiths.co.uk