The critical question posed in this case is whether public sector employees who are subject to industry or sector-wide negotiated terms, remain entitled to the benefit of increases in pay negotiated under those terms after they have transferred to the private sector? The Advocate General of the European Court of Justice has recently concluded that the inter-relationship between the UK TUPE regulations and the European TUPE Directive supports the view that such rights to pay increases do survive a transfer. It seems likely that the EU Court, when it gives its final judgment, will agree.
The issues raised by this case are significant, not only for UK employers but also for the UK Government in terms of its reliance upon private sector business to alleviate public sector staffing reductions. It may therefore decide to pre-empt the Court by implementing proposals of its own (see “TUPE consultation” above) which narrow the TUPE regulations. For more details on this case, read our briefing.