The Employment Appeal Tribunal (HHJ McMullen QC and members) has handed down Judgment in Smith & Others v Trustees of Brooklands College (2011) UKEAT/0128/11ZT . The Judgment considers circumstances whereby a variation to terms and conditions occurred two years after a TUPE transfer.
The employees in the claim were TUPE’d in August 2007. After a period of time (the specific circumstances are described at para 11) the new employer took the view that these employees were being paid at a higher rate than other employees and sought to negotiate a phased reduction in salary. After some negotiation with the Claimant’s, the Claimant’s consent to a variation to their terms and conditions with effect from 1st January 2010, from which date the phased reduction commenced.
The employees brought their claim through the unlawful deduction from wages jurisdiction. However, the issue for determination was whether the variation to the employees contracts was void by reason of the operation of Regulation 4(4) TUPE 2006.
As a reminder, Regulation 4(4) voids a variation or purported variation by reason of TUPE, unless the employer can show that it has an economic, technical or organisational (ETO) reason for the variation.
The Employment Appeal Tribunal upheld the Judgment of the Employment Tribunal that the variation was not void by reason of TUPE.
The following points emerge:
- The EAT restated the principle contained within London Metropolitan University v Sackur (2006) UKEAT/0286/06 that there is no specific period of time following a TUPE transfer that any variation will be void for. However, the variation is less likely to be connected with a transfer the longer after the transfer occurs.
- The EAT restated the principle that if a variation occurs and it is void by reason of TUPE, subsequent affirmation cannot affect the fact that the initial variation was void. (I have some views on this and consider that there are alternative arguments open to employers)
- The EAT correctly treated the issue as one of fact. There was no real dispute between the parties as to the law. Therefore, the EAT was able to uphold the original Judgment as that had found that the reason for the variation was
“….the real reason for the variation was Ms Hopkins’ belief that these four people had been mistakenly paid this rate and that as a consequence they were out of step with the rest of the sector.”
Even though this is a point of fact, the circumstances which give rise to this finding are of interest. The four affected employees who were subject to the variation had all transferred over. That in itself is compelling evidence of the variation being related to TUPE.
As far as I can tell from the EAT Judgment, the fact that the employees were ‘out of step’ with the rest of the sector was not advanced as an ETO reason by the employer.
Therefore, we are left with a Judgment in which only employees that have TUPE’d over have been subject to a variation, have their pay altered in order to bring it in line with the rest of the sector and yet this is not connected with a TUPE transfer. Whilst it is doubtful that this case creates a precedent, it does review some useful aspects of the law and some Respondent’s may wish to draw this Judgment to the attention of Tribunals in assisting Tribunals in understanding the potential scope of their fact finding role. For employees, no doubt the point can be made that the case should be restricted to it’s own facts.