Agreed employment variations are ineffective if they are caused by transfer of an undertaking, according to the Employment Appeal Tribunal.
In Wilson and others v St Helens Borough Council, control of the Red Bank Controlled Community Home passed from Lancashire County Council to St Helens. The applicants, who had consequently been made redundant, applied for jobs with St Helens and were appointed under new contracts. They then brought proceedings against St Helens claiming that their reduced salaries resulted from the transfer and breached the 1981 TUPE Regulations and the Wages Act 1986. The industrial tribunal had rejected the claims because staff had affirmed the new contracts by working on them "without protest".
However, the Employment Appeal Tribunal disagreed. The 1988 decision of the European Court in Daddy's Dance Hall made it clear that employees cannot waive their rights under the relevant directive, even with their consent.
The variations related back to the time of the transfer and were therefore prohibited. If the operative reason for the variation is the transfer of the undertaking then the variation will be ineffective. Therefore the terms of the original contracts with the county council remained in force.