Contractual change not void under TUPE

The removal of a contractual travel time allowance by an employer following a TUPE transfer was not void.  The employer had withdrawn the allowance because it was outdated and unjustified, not because of the transfer.  

Facts

In Tabberer v Mears Ltd and others, electricians were entitled to an Electricians’ Travel Time Allowance.  The allowance had existed since 1958 and was introduced to compensate them for loss of a productivity bonus caused by the need to travel to different depots. Over time, most of the 40 depots had closed and productivity bonuses had been phased out.

The electricians were the subject of a number of TUPE transfers and although they were no longer required to travel, they continued to receive the allowance.  In 2006, managers questioned payment of the allowance but the employer at that time continued to pay it as they considered it to be a legal requirement.  

When the employees transferred to Mears in April 2008, it ceased the payments. Some of the electricians brought a claim for an unauthorised deduction from wages which was successful. Following that tribunal decision, Mears gave notice that it was ending the allowance from September 2012 and it would no longer form part of their contracts. 

The employees claimed that the variation was void on the basis that the reason for the contractual change was the TUPE transfer or a reason connected with it.  They brought another unauthorised deduction from wages claim.  The employment tribunal rejected the claim, finding that the reason for the change was not the transfer to Meers in 2008, but the fact that the allowance was outdated and unjustified.      

The employees appealed, arguing that the reason for the variation was connected to the transfer.  The whole subject matter of the earlier litigation was related to the transfer and the reason for changing their contracts included the adverse findings in that litigation.  On that basis the change was connected to the transfer.

Decision 

The Employment Appeal Tribunal dismissed the appeal. The tribunal had found that the outcome of the previous litigation had been the context for the employer’s decision to end the allowance, not the reason for it.  The reason for changing their contracts was its belief that it was outdated, a view also held by previous managers before the electricians transferred to Mears. Importantly, the belief that the payment was outdated and unjustified did not arise purely on the occasion of, or because of, the transfer - it was a pre-existing belief.  

Although the employer was faced with the issue on the occasion of the transfer, it was an issue that had confronted management regardless of any transfer, and it would be no different to a new manager coming into the workplace and learning of such an entitlement. 

Therefore the tribunal had been entitled to conclude that the variation was not for a reason connected with the transfer.

Implications

Changes to contractual terms following a TUPE transfer are void if the transfer is the reason or principal reason for the change. Employers are the therefore able to make changes following a TUPE transfer if they are able to show that the reason for acting the way they did was not transfer. So if the reason for the change would have applied irrespective of the transfer the change will be permitted under TUPE.  Employers should make sure that they document their reasons so that they are able to demonstrate this. In this case it was clear that the underlying reason for the change was one which applied regardless of the transfer and therefore the change was not void.