TUPE: Supreme Court asks ECJ if transferee has to honour pay agreement signed by transferor
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Parkwood Leisure Ltd v Alemo-Herron and others [2011] IRLR 696 SC (0 other reports)
In Alemo-Herron and others v Parkwood Leisure Ltd Case C-426/11 ECJ, the European Court of Justice held that a transferee is not bound by "dynamic" clauses in contracts of employment referring to collective agreements negotiated after the transfer, where that transferee cannot participate in the negotiation process.
transfer of undertakings | collective agreements | pay increase after transfer
The Supreme Court has referred to the European Court of Justice (ECJ) the question of whether or not the TUPE Regulations should be given a "dynamic" interpretation, in the context of a dispute over a transferee's failure to honour the terms of a pay increase made under a collective agreement that was incorporated into the contracts of employment before the transfer.
Implications for employers
- This reference to the ECJ throws into doubt the UK's settled case law precedent that a transferee will not normally be bound by changes made to collective agreements negotiated between the transferor and the relevant unions, even if the transferred employees' contracts of employment explicitly state that the employees are entitled to benefit from collective agreements negotiated "from time to time".
