12 October 2011 #Employment
Regulation 4(4) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (“TUPE”) provides that if an employer seeks to vary an employee’s employment contract following a TUPE transfer, that variation will be void if the sole or principal reason is the transfer itself.
In Smith v Trustees of Brooklands College, the claimants were originally employed by Spelthorne College. They enjoyed unusual employment terms as they were paid as full time employees when they only worked part time. In August 2007 the college was transferred, under TUPE, to Brooklands College. Afterwards, Brooklands College realised the claimants were on terms out of step with the rest of the sector and sought to standardise the claimants’ contracts. The claimants agreed to a change in their contract but then brought claims under Regulation 4(4) of TUPE.
The claimants argued that "but for" the TUPE transfer, the variation would not have taken place. However, the Employment Appeal Tribunal (“EAT”) held that this was not the correct test. The correct test was to look at the reason for the change. This is a question of fact. In this case the variation was not by reason of the transfer but was instead to correct an obvious error in pay. In cases of this nature tribunals will likely look at what was in the employer`s mind and also the length of time between the transfer and the variation.