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TUPE Transfers Do Not Set Obsolete Terms and Conditions in Stone

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

Staff who are shifted between one employer and another have a right to work under the same terms and conditions as before – but what happens if such provisions become obsolete? A tribunal tackled that issue in a guideline case.

The case concerned a group of electricians who had originally worked for a local authority but whose employment had been transferred several times. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) applied to each of those transfers and the electricians ended up working for a private company that provided maintenance and repair services in respect of social housing.

Their original contracts with the council had included an entitlement to travel time allowance (TTA). That provision, which dated back to 1958, was designed to compensate electricians for the loss of productivity bonus caused by the need to travel between 30 or 40 different depots. Since then, the number of depots had dwindled to just one, productivity bonuses had been phased out and electricians were allocated jobs on handheld computers. The TTA provision, however, travelled with the electricians between employers and continued to have contractual force.

After their new employer informed them that their entitlement to TTA would cease, the electricians complained to an Employment Tribunal (ET), alleging that unlawful deductions had been made from their wages. Their claims were, however, dismissed on the basis that the TTA provision was outdated to the point that it was prehistoric and bore no relation to modern working practices.

In dismissing the electricians’ challenge to that ruling, the Employment Appeal Tribunal (EAT) agreed with the ET that the employer’s genuine reason for withdrawing the TTA was that it was obsolete and unjustified. The variation of their contracts was thus for a reason unrelated to the relevant TUPE transfer.

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