Landmark TUPE case decided in CJEU

July 26th, 2013

On 18th July 2013 the CJEU promulgated its Judgment in Alemo-Herron v Parkwood Leisure Ltd.

The central issue in that long-running litigation was the following:

1. where the contracts of employment between a transferor employer and its employees have a term incorporating the terms agreed from time to time in a collective bargaining process; and

2. the undertaking and those employees are transferred under TUPE; and

3. the transferee employer is not able to participate in that collective bargaining process;

4. is the transferee employer bound to apply terms agreed from time to time in that collective bargaining process after the date of the transfer

In the language of Europe, the view that the transferee employer is bound by post transfer collectively agreed terms is referred to as “the dynamic” view, and the opposite view is known as the “static” view. Parkwood, of course, argued for the static view to prevail. In doing so Parkwood relied on the earlier ECJ decision of Werhot [2006] ECR-1-2397.

The UK Tribunals and Courts came up with a range of different answers to the above issue and the Supreme Court referred a number of questions to Europe.

The CJEU has decided that Member States are precluded from introducing provisions which have the effect of binding transferees to the terms agreed after the transfer by some collective bargaining body to which the transferee cannot belong. In doing so the CJEU relied both on general principles and on the Judgment of the ECJ in Werhof.

The effect of this is that what was the established case-law in the UK under TUPE prior to this case, which case-law followed the dynamic approach (such as Whent v T Cartledge Ltd [1997] IRLR 153) is no longer good law.

Adrian Lynch QC acted for Parkwood Leisure Ltd.

Read judgment click here

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