Brabners Chaffe Street Update: TUPE - Variation of terms and conditions of employment
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21.10.2011
Any change to existing terms is void if the sole or principal reason for the change is the transfer itself, or a reason connected to the transfer that is not an economic, technical or organisational (“ETO”) reason. This principle still holds true where the employee consents to the changes made to their employment. Variations to terms can be valid when they are for a reason unconnected to the transfer or for an ETO reason. In Smith & Ors v Trustees of Brooklands College, the Employment Appeals Tribunal (“EAT”) looked at the reason for dismissal following an Employment Tribunal (“ET”) decision rejecting a claim that variations made following a transfer were void. In this case, four teaching and learning assistants were employed at a college on unusual terms; despite working part time (25 or 22 hours per week) they were paid as if they were full time employees. This was contrary to their trade union’s guidance and differed from the rest of the education sector. When their college merged with another the employees transferred accordingly. The new employer reviewed rates of pay and it was felt that these four employees were being overpaid in error. The employees reluctantly agreed to a phased reduction to their pay. However, they subsequently brought a claim for an unlawful deduction from wages based on the argument that the variation was void under TUPE. Both the ET and the EAT decided that the variation was for a reason other than the transfer. Although the pay review would not have occurred but for the transfer, this was not the appropriate test. The crucial issue was the reason behind the variation; in this case, a genuine though incorrect belief that the original terms were the result of a mistake and that the employees should have been paid in line with standard industry practice. The distinction between harmonising employee terms following a transfer (which is a reason connected to the transfer and so void), and varying terms for other reasons such as a belief that some current terms are mistaken (which is a reason unconnected to the transfer and so valid) is particularly fine, and a difficult one to draw.
This bulletin is for general guidance purposes only and should not be used for any other purpose.
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