Where an employee's contract provides that pay is set by collective agreements negotiated by the transferor and union from time to time, this right is frozen at the point of a TUPE transfer. Pay rates set by collective agreements negotiated by the transferor post-transfer will not bind the transferee.

The Court of Appeal has overruled the EAT's decision and ruled that TUPE must be construed in line with ECJ law permitting rights to be frozen at the point of transfer. This is good news for transferees, particularly for businesses which have acquired ex-public sector employees under TUPE. (Alemo-Herron v Parkwood Leisure, CA)