ECJ makes employer-friendly TUPE decision: relief for transferees

By Kevin McCavish

The European Court of Justice (ECJ) has ruled that UK courts must adopt a ‘static’ rather than ‘dynamic’ approach to collectively agreed terms on a TUPE transfer. This is good news for transferees on a public sector outsourcing.

The long-running case of case, Alemo-Herron and others v Parkwood Leisure Ltd C-425/11, considered the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE), which implemented the Acquired Rights Directive 77/187/EEC in the UK. The directive has since been updated, as has TUPE. However, the same main principles continue to apply so the decision is relevant for the future.

Where there is a transfer of employees under TUPE, the new employer is bound by the existing terms of employees’ contracts of employment. If there is a ‘dynamic’ clause that provides that terms and conditions of employment will be in accordance with collective agreements negotiated ‘from time to time’, the UK courts previously held that TUPE renders such a clause enforceable against any new employer…

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