ECJ unexpectedly finds in favour of employer in Alemo-Herron vs. Parkwood Leisure TUPE Case
19 July 2013 Trade unionists and lawyers have been waiting with baited breath for the decision, which it had been hoped would change TUPE law in favour of employees.
19 July 2013
Trade unionists and lawyers have been waiting with baited breath for the decision, which it had been hoped would change TUPE law in favour of employees.
Alemo-Herron vs. Parkwood Leisure was a landmark case with serious implications, particularly for workers being transferred from the public sector to private sector companies.
The case was brought almost three years ago after Parkwood Leisure refused to pay its workers an increase in line with a collective agreement the employees understood to have been transferred as part of their protections under TUPE Regulations.
However, the European Court of Justice (ECJ) yesterday (18 July 2013) ruled that industry or sector-wide collective agreements that are incorporated into the contracts of employees should not be protected during a transfer.
The contracts of Parkwood Leisure employees stated that their wages should rise “from time to time” according to collective bargaining agreements, but the Court ruled that such “dynamic” agreements do not need to be adhered to after a transfer has taken place.
However, the collectively-agreed pay rate of workers at the time of their transfer continues to be protected under TUPE regulations.
The decision is a very disappointing one for the trade union movement, as in this case the ECJ has shifted the traditional interpretation of TUPE as a set of legislation to protect workers, to concentrate on the Rights of Establishment (i.e. employers) instead.
In a statement, the Court said: “The transferee’s contractual freedom is seriously reduced to the point that such a limitation is liable to adversely affect the very essence of its freedom to conduct a business.”
The Institute of Employment Rights is holding a TUPE Update in London this October, with a special morning-long seminar by TUPE expert Richard Arthur on the Alemo-Herron vs. Parkwood Leisure decision and its implications for workers and trade unions.
Leading trade union officials and campaigners will then offer their views on the new regulations and provide some direction as to where the labour movement can go from here.
