Altering contractual terms after a TUPE transfer

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Under the 2006 Regulations (Transfer of Undertakings (Protections of Employment) Regulations) new employers cannot make changes to employee contracts once the transfer is complete.

Author: Dennis Chapman
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This article is 10 years old.

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In the recent Tribunal case of Smith and Ors V Trustees of Brooklands College, the issue of making amendment to employees after the completion of a TUPE transfer was discussed.

Under the 2006 Regulations (Transfer of Undertakings (Protections of Employment) Regulations) new employers cannot make changes to employee contracts once the transfer is complete. Further these changes cannot be made for reasons connected with the transfer, as it is deemed to put the employee in an unfair position and is thus a breach of contract.

Changes can be made if they are for justifiable ‘economic, technical or organisational reasons’ (Regulation 4(4)) however these are often hard to prove to a Tribunal; as even the widely recognised argument of harmonising the workforce, is usually ruled to be unfair.

This case however appears to show a change in the tide and rebut the assumption that all changes are unfair, and that TUPE regulation should not stand in the way in the employers ‘ordinary course of business’.
The facts of this case relate to that of a teaching assistant who, along with others worked between 22-25 hours a week however received the salary of someone working over 10 hours more a week. This wage structure was a private agreement between the teaching assistants and the college; it was neither part of union collective agreement nor a standardised bracket of pay across the education sector.

TUPE transfer was undertaken and the teaching assistants moved to another college (the Defendants). When assessing the staff contracts of the new teaching assistants, it was believed that the pay grade had been mistaken re-laid to them from the previous college, due to it being such a high amount.

Therefore a phased reduction of their salaries was implemented, which was objected to by the teaching assistants, leading to tribunal claims against the college of unlawful deductions from wages (S13 Employment Rights Act 1996).

Claims that the change was connected to the TUPE transfer and thus void under Regulation 4(4) were rejected the by Tribunal on the basis that the reduction was based on a mistaken miscommunication as to the wage level these employees were previously paid, as it would appear to the reasonable employer that their wages were considerably higher than any other employees working at their level.

Based on this, the claims were rejected. At appeal the judgement was upheld, extending the judgement to state that the reasons for the employers actions must be taken into consideration over and above the idea that the TUPE transfer put the employees into a position for their terms to be changed and thus any variation is connected to it.

This judgement is a rarity and cannot be taken as a surety that Tribunals are treating TUPE transfers differently, however it does demonstrate that if genuine reasons can be proven to be unconnected to a transfer then terms maybe changed.

Dennis Chapman

In remembrance of Dennis Chapman 1951 -2015

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