The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) give effect to the EU Acquired Rights Directive. Their purpose is to protect employees and this includes restricting the imposition of new terms of employment by reason of a transfer. An employee will transfer to the new employer or new service provider with the terms and conditions of his employment intact and the ability of employees or employers to change those terms and conditions is extremely limited. In fact, case law has granted employees a level of protection that goes further than provided for by the Acquired Rights Directive. The cases of Foreningen af Arbejdsledere i Danmark v Daddy’s Dance Hall  IRLR 315 and Wilson v St Helen’s Borough Council  2AC 52 have established that where employees are transferred on the transfer of an undertaking, their terms of employment cannot be varied lawfully for a reason connected to the transfer even if the employees consent to the variation and, it seems, regardless of how long after the transfer the variation is made. On the other hand, the cases do make it clear that variations by agreement between the parties are not prevented where the reason is unconnected to the transfer. However, in Martin v Southbank University  IRLR 74, the European Court of Justice held that a variation that was merely intended to harmonise the terms of transferred employees with those of existing employees was by reason of the transfer and therefore void.
There is therefore significant constraint upon the ability of the transferee to standardise terms and conditions of employment. These principles have now been codified in regulation 4(4) of TUPE which states that any purported variation of the contract of employment is void if the sole or principal reason for the variation is either (1) the transfer or, (2) a reason connected with the transfer which is not an economic, technical or organisational (ETO) reason entailing changes in the workforce.
An employer can, of course, standardise terms and conditions of employment if the reason for the change is not the transfer. For example, this would arise if it is the result of a general job evaluation study for equal pay purposes. However, advice given to employers is that only a change clearly unconnected with the transfer will be safe from challenge.
The recent cases discussed in this edition of Highlights have shown that there is scope to make changes. Although they are not new law, they challenge the assumption that harmonising terms and conditions can never be done and provide examples of circumstances where genuinely non-TUPE related variations may occur.