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Law for Business

Knowhow - guidance - precedents

19 JUN 2014

After a TUPE transfer, when can you harmonise contracts?

Pam Loch

Managing Partner

@LochLaw

After a TUPE transfer, when can you harmonise contracts?

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”) requires that when a business changes ownership, employees transfer over to the new employer automatically, without any break in their employment or changes to terms and conditions. However, new employers often want to make changes to the employees’ terms of conditions, to harmonise with the terms of their existing staff.

TUPE prohibits harmonisation where the changes are introduced as a direct result of the transfer itself and as such, any changes connected to the transfer will be void. However it is often thought that the longer the period of time between the transfer and the changes actually being made, the more likely it will be that an employer can show the changes are not in any way connected to the transfer. Employers should bear in mind the Tribunal’s decision in the case of Campbell v Martin McColl Ltd (2011) where the new employer tried to make changes to contracts one year after the transfer. The Tribunal found that despite the period of time that had elapsed the reason for the change was still connected to the transfer.

In the recent case of Hazel and another v The Manchester College (2014) the Court of Appeal upheld a decision that two employees, who were dismissed for failing to agree to new terms following a TUPE transfer, were automatically unfairly dismissed. The Court of Appeal found that the only reason the employees were dismissed was because they had refused employment on the new terms and not because of the wider redundancy process that was being implemented.

These recent cases confirm the stance Tribunals and the courts will continue to take over changing terms and conditions of employment following a TUPE transfer.

Despite the frustration which this can create for employers, the principal aim of TUPE is to ensure that employees retain their existing terms following a transfer and Tribunals are unlikely to stray too far from this. It is possible to make changes to contracts but employers should seek specialist advice in employment law for advice before they go ahead.

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