“Tomorrow’s announcement from the European Court Advocate-General is likely to prove significant in the dispute over how Transfer of Undertakings Protection of Employment (TUPE) Regulations are applied in the UK when public sector services are transferred to private and third sector organisations. The question of whether employees in this situation will continue to benefit from entitlements negotiated by trade unions with industry-wide bargaining power post-transfer will impact employees, businesses and the UK Government.
“The announcement will give public sector employees a good indication of whether they remain entitled to benefits negotiated by their trade unions, such as increases in pay, after they have transferred to the private sector. For private and third sector providers taking over public sector services, it could mean they acquire more than they bargained for, with an obligation to meet industry or sector-wide negotiated terms for employees.
“As the decision boils down to the fact that interpretation of the TUPE Directive rests with individual member states, there will no doubt be further pressure on the UK Government from businesses, many of whom consider the UK’s interpretation of TUPE to be on the generous side.
“At the very least, this case serves as a reminder of the critical importance of due diligence when checking employment contract terms and collective agreements.”
