Transferees not bound by terms collectively agreed after a TUPE transfer

Is a TUPE transferee bound by terms of employment that are collectively negotiated following the transfer, but where it is not a party to the negotiations? To anyone not too familiar with TUPE, the answer must be ‘surely not’. However, this issue was far from clear and was only clarified by the Court of Justice of the European Union (CJEU) earlier this month (Alemo-Herron v Parkwood Leisure Ltd). It held that a transferee is not bound under TUPE by post-transfer collectively agreed terms when it cannot participate in the negotiation process.

The question focuses on whether TUPE should be given a ‘static’ interpretation (transferee only bound by pre-transfer terms) or a ‘dynamic’ one (in respect of transferring employees, the transferee is bound by post-TUPE negotiated changes, even where it is not a party to the negotiations). At the end of the day, the ‘static’ view won.

The decision is important to clients involved in public-to-private-sector transfers, in particular outsourcing. The next step is for the Supreme Court to apply the decision to the facts in Parkwood…

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