Posted by Gemma Ospedale, Partner
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Collective agreements post TUPE
The application or otherwise of decisions made under collective agreement has been wending its way through the courts and has now got to the CJEU. The Advocate General gives a (not very helpful) Opinion :-
The Advocate General of the CJEU has given his opinion in the referral on the case of Alemo-Herron and others v Parkwood Leisure Limited. This is the case where the employees who worked in a council leisure department had contracts containing a ”dynamic” clause incorporating existing and future collective agreements by the National Joint Council for Local Government Services. The employees transferred to Parkwood Leisure under TUPE. The case concerned whether or not pay increases agreed with the unions after the transfer could be relied upon. The transferee, Parkwood, refused to honour the NJC agreement for pay increases on the basis that it was not, and could not have been, privy to the NJC negotiations because it was not the employer at the time they were taking place. The question raised with the Advocate General by the Supreme Court was whether dynamic clauses could, in principle, transfer under the Acquired Rights Directive.
The Advocate General essentially said that the Directive did not state either way whether or not these clauses could transfer (very helpful); and that therefore it was up to individual member states to decide (even more so). The one point the Advocate General did make was that national Courts needed to ensure that the transferee’s freedom to conduct business was not hampered by a dynamic clause being unconditional and irreversible. In the UK however this was unlikely to be the case because collective agreements have their own legal foundation in the individual employment contracts which can be negotiated.
The CJEU is not obliged to follow the opinion of the Advocate General but it generally does so. The CJEU decision in this case will be published in a future edition of the Update.
This legal update is provided for general information purposes only and should not be applied to specific circumstances without prior consultation with us.
For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.
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