Under the rules of the Transfer of Undertakings (Protection of Employment) Regulations 2006, it was unlawful to change an employee’s terms and conditions of employment if the sole or principal reason for doing so was the transfer itself or a connected reason that was not economic, technical or organisational. The more recent 2014 TUPE regulations narrow this down to being unlawful simply if the sole or principal reason for the change is the transfer.
In the recent case of Tabberer and others v Mears Ltd and Others before the Employment Appeal Tribunal (EAT), a number of electricians originally employed by Birmingham City Council (BCC) had been subjected to a series of TUPE transfers, ultimately to Mears Ltd in 2008. From their time at BCC up until that point the employees had received payments of Electricians Travel Time Allowance (ETTA), but Mears Ltd wished to discontinue the payments as outdated and unjustified. An earlier tribunal had decided that the entitlement should stand, so Mears Ltd gave formal notice of their intentions on the grounds that the allowance was inappropriate, did not support the needs of the business, and was unfair on the rest of the workforce.
The employees took the matter to a tribunal, arguing that a TUPE transfer was the reason for the variation, but their claim was rejected so the matter progressed to the EAT. The employees argued that the original, pre-Mears Ltd, tribunal, which had upheld the entitlement to the allowance, had a TUPE transfer as its subject matter and, therefore, there was a continuing link. The EAT, however, found that this earlier litigation had set the context for Mears Ltd’s decision but was not the reason for it. The reason, the EAT held, was that the allowance was outdated and unjustified and that this was a pre-existing belief that had originated before the transfer.
The EAT upheld the tribunal’s decision that Mears Ltd’s variation to their employees’ terms and conditions of employment was not void under TUPE.
The ruling serves as a useful reminder to employers of the potential difficulties in making variations to contracts against the backdrop of a transfer. Such variations are possible, but great care must be taken to inform employees correctly of the reasons behind any decision, and to keep meticulous records of the process that has led to them. In essence, employers must look to compile a record of the process on which they know they can rely in any subsequent litigation.
Have a question? Contact Alison via email for more information.
