Overview

The way TUPE applies to contractual collective bargaining arrangements has been thrown into doubt, following a decision of the Supreme Court in the case of Parkwood Leisure v Alemo-Herron.

The point in issue is of particular significance when private sector employers take on public sector employees as part of a TUPE transfer. At its heart is this question: are public sector employees who transfer to the private sector entitled to the benefit of increases in pay negotiated under industry or sector-wide bargaining arrangements after they are transferred to the private sector?

In 2010, the Court of Appeal decided that a transferee employer was only bound by the terms of collective agreements in force at the time of the transfer and not to subsequently agreed changes or new agreements. However, the Supreme Court has now rejected that approach and decided to refer the matter to the Court of Justice of the European Union for clarification.