TUPE

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Parkwood Leisure Ltd v Alemo-Herron AG ECJ 19 February 2013

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The issue in this long running case is whether collective agreements have a dynamic or static interpretation on transfer.  Put another way do they freeze in time at the point of transfer or are employees who transfer entitled to rely on subsequent changes to them even though their new employer is not and was never intended to be a party to the collective agreement.

The employees were originally employed by the London Borough of Lewisham. Their pay was determined by a collective agreement between the employer and the National Joint Council for Local Government (the “NJC”). Following two TUPE transfers, Parkwood became the new employer. Subsequently, a new collective NJC agreement was negotiated, without any participation by Parkwood. The new agreement increased pay scales.  Parkwood refused to implement these increases.  The employees claimed to be entitled to the new collective agreement.  Parkwood won in the ET, lost in the EAT and won in the Court of Appeal.

The Supreme Court referred the matter to the European Court of Justice (‘ECJ’).

The Advocate General (‘AG’) of the ECJ  the has given his opinion.  He is of the opinion that a dynamic interpretation is permissible.

The AG also drew attention to the fact that , the United Kingdom has not taken advantage of the exception under Article 3(3) of the Directive, whereby Member  States can restrict the length of time that collective agreements agreed prior to the transfer are effective once the transfer has taken place, albeit with a minimum limit of one year.  It should be noted that this issue is something that the Government has highlighted in its consultation to changes to TUPE.

It should be noted that the case refers to Reg 6 of the 1981 TUPE Regulations.  This is Reg 5 in the current Regulations

Link to AG’s Opinion

Link to Supreme Court Judgment

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