How does a collective agreement affect a TUPE transfer?

In the recent case of Worrall v Wilmott Dixon the EAT considered whether rights granted under a collective agreement survived a TUPE transfer.

The rights granted under the collective agreement were rights of staff to be given credit for an additional five years service if they were made redundant and were provided by statutory rules. The rules had been repealed after the TUPE transfer, but before the claimant was made redundant by the transferee.

The question was what extra rights, if any, the combined effect of the collective agreement and the statutory rules gave to the claimant at that point. In deciding the case, the EAT confirmed that, because the statutory rules had been repealed, the claimant could not claim any rights under them. The EAT also decided that, in any event, the rights granted by the collective agreement had not formed part of the claimant's contract.

Points to note –

  • The rule, as recently confirmed by the Court of Appeal in the case of Parkwood Leisure v Alemo-Herron, is that a transferee cannot be bound by changes made to a collective agreement after the date of the transfer. However, the EAT has now confirmed that this does not mean that rights crystallise at the date of the transfer so that later changes in the law could be ignored.
  • The EAT said that it would always be necessary for claimants to prove that they knew the relevant term of a collective agreement and had agreed to it before they could assert it as a contractual right. It was not enough simply to say that right was contained in the Personnel Handbook. The wording of employee documentation is key.