The European Court of Justice has recently handed down a decision which could make life easier for employers when new staff with the benefit of collectively agreed terms are transferred under the Transfer of Employment Protection Regulations (TUPE).
This case goes back many years, when council leisure services employees were transferred to a private sector provider as part of an outsourcing exercise. Adopting arrangements common in unionised workplaces, their pay was determined not by individual negotiation with the employer, but by the rates agreed each year under the collective bargaining arrangements to which the employer was a party, in this case the National Joint Council for Local Government Services. But how should this arrangement work after a TUPE transfer to a new employer who could not participate in the NJC negotiating framework?
The ECJ has decided that in this case, the employees were transferred at their current rates of pay, but any wage increases agreed by the NJC after the date of the transfer did not bind the new employer. In reaching this decision it goes against the general TUPE principle that the terms and conditions of transferring staff should be fully protected following a transfer to a new employer.
It is clear that this decision (the first really definitive ruling on the point) will make life considerably simpler for HE and FE institutions particularly in outsourcing situations or where they are acquiring staff from a public sector body, such as the NHS. This applies whether they are accepting transfers in of employees who previously enjoyed local authority-style terms and conditions, or outsourcing services to private sector providers who do not recognise a trade union for collective bargaining purposes.