Changing terms and conditions of employment after a TUPE transfer
“But why can’t we?” is so often the complaint we receive from employers who are trying to change their employee’s terms and conditions of employment after a TUPE transfer. In short, TUPE and in particular, regulation 4(4), prevents employers from amending terms and conditions of employment if the sole or principal reason for the change was either the transfer itself or a reason connected with the transfer which is not an economic, technical or organisational reason entailing changes in the workforce. The result of such a change is that it is void.
Regulation 4(4) of TUPE is often viewed as an impediment for employers. To be frank, it can be, albeit it is attempting the admirable aim of protecting employees. You can understand the employer’s desire to have one set of terms and conditions for all employees which are identical, or with only minor differences or to amend terms they have inherited from a previous employer. For simplicity, if nothing else. However, the reality is that regulation 4(4) can prevent this and employers often have two or more sets of terms and conditions in circulation as a result of TUPE transfers.
The recent case of Tabberer and others v Mears Ltd UKEAT/0064/17 is a useful demonstration of how the Employment Tribunal will approach changes to terms and conditions after a TUPE transfer. This case was brought under TUPE prior to the amendments in 2014 and therefore under the previous version of regulation 4(4). However, it is still relevant.
Tabberer and others v Mears Ltd
The Claimants were electricians who had originally been employed by Birmingham City Council. However, after several TUPE transfers, they eventually ended up at Mears Ltd (‘Mears’) in 2008. During their employment with the Council, the Claimants were entitled to receive an ‘Electricians Travel Time Allowance’ (‘ETTA’). The ETTA had existed since 1958, before any of the Claimant’s commenced employment. The ETTA served as a means of compensating electricians for the loss of a productivity bonus caused by the need to travel between depots. Since 1958, a number of the depots closed, and productivity bonuses were phased out.
Mears ceased payment of the ETTA to the Claimants, on the basis that the electricians no longer needed to travel. Ten electricians brought claims against Mears for unlawful deductions of wages. The Employment Appeal Tribunal (“EAT”) found in the electricians’ favour, and determined that the electricians were contractually entitled to the payments (Mears Ltd v Salt and Others UKEAT/0522/11). Mears subsequently wrote to the electricians, giving notice of the removal of the ETTA from their terms of employment with effect from September 2012.
The electricians brought a further claim against Mears, arguing that the variation of their terms of employment was void under regulation 4(4) TUPE. They again brought claims for unlawful deductions from wages, but the Employment Tribunal rejected the claim. The Employment Tribunal held that the reason for the variation to the terms of the electricians’ employment was not by reason of the transfer to Mears in 2008, but the fact that the ETTA was an outdated and unjustified allowance.
The electricians appealed against the Employment Tribunal’s decision arguing, amongst other things, that the Employment Tribunal had ignored the fact that their claim was about the transfer and the non-payment of the ETTA following the transfer.
The Employment Appeal Tribunal (“EAT”) dismissed the electricians’ appeal. It held that the reason for Mears’ decision was not because of the transfer, but because the ETTA was outdated. The EAT noted that this belief that the ETTA was outdated did not arise by reason of the transfer, but this belief had existed before the TUPE transfer to Mears in 2008. Accordingly, the removal of the ETTA was not void.
What does this mean for employers?
The decision is a useful example of where an employer has changed terms and conditions, after a TUPE transfer, without falling foul of regulation 4(4). Whilst this is helpful, it is also clear that any finding in this regard is going to be very specific to the facts. It is also not going to be interpreted to allow wholesale harmonisation of terms.
Any employer seeking to make such changes, post-transfer, will need to consider carefully the reasons for making such a change and distancing it from the reason being the transfer.
If you have any questions regarding this article, please feel free to contact Robert Frampton by email to firstname.lastname@example.org
Enter your email address for legal updates on Employment & Immigration Law.