If an employee's contract provides that pay is set by collective agreements negotiated by the transferor and union from time to time, this will continue to apply even after the employees have transferred under TUPE to a transferee. Pay rates agreed by the transferor post-transfer will bind the transferee.

This goes further than required by ECJ law, which allows rights to be frozen at the point of transfer. It will be particularly significant for businesses which have acquired ex-public sector employees under TUPE. The ruling is being appealed. (Alemo-Herron v Parkwood Leisure, EAT)