28 July 2010 #Employment
Under TUPE, all collective agreements relating to the transferring employees transfer to the transferee where they are bound by the terms in force at the date of transfer. Any subsequent changes or new collective agreements will not ordinarily bind a transferee if they are not a party to it.
However, in the case of Worrall & others v Wilmott Dixon Partnership Ltd & another, the EAT considered whether a change in legislation would affect the terms of a collective agreement which had transferred under TUPE.
The employee in this case TUPE transferred to his ultimate employing entity Wilmott Dixon Partnership Ltd in 2008 and his employer was bound to abide by the terms of the employee`s original contract which commenced in 1971 with Birmingham City Council.
The employee took voluntary redundancy from Wilmott and claimed that the company was obliged to award him ‘at least 5 added years` as this was a term in the collective agreement that the Council had entered into in 1993 with its recognised Trade Union.
However there had been a legislative change in the Local Government regulations in 2006 which had the effect of revoking earlier regulations, in particular the power for Local Authorities to award ‘added years` had been revoked.
The EAT held that the term in the collective agreement awarding at least ‘5 added years` was not incorporated into Mr Worrall`s contract but even if it had been incorporated, the employee would still have failed in his claim as the subsequent change in the Local Government regulations removed the employer`s ability to award ‘added years` to those who took voluntary redundancy.
Had the agreement been incorporated, the transferee would have been bound by the recent legislative change which took effect after the agreement had been entered into.