The Employment Appeal Tribunal in the recent case of Tabberer and others v Mears Limited has confirmed that Regulation 4(4) TUPE is not always the ‘trump card’ employees may think that it is.

Under Regulation 4(4) TUPE, changes to an employee’s terms of employment are void unless the reason for the change is unconnected to the transfer or there is an economic, technical or organisational reason for the change (for example that the new employer’s business is financially struggling etc.). Many employees wrongly interpret this to mean that their employers cannot change any of their terms of employment, but Tabberer shows that this is not true. It is also a lesson to employers not to delay making contractual changes and to consider making changes when the issue first arises.

The facts

The Claimants were a group of electricians, who were originally employed by Birmingham City Council and received a ‘travel time allowance’. The Claimants were subject to a number of TUPE transfers and whilst their new working practices meant that they no longer needed the allowance, they continued to receive it. Notably, in 2006, some managers questioned the payment of the allowance but it continued to be paid.

In 2008, the electricians’ employment transferred to Mears. Mears finally put an end to the allowance on the basis that the electricians no longer needed to travel. Some employees brought a claim that the non-payment of the allowance constituted an unlawful deduction from wages, the issue was determined in the electricians favour.

Following this decision, Mears gave notice to its employees that it was ending its allowance from September 2012 and that it would no longer form part of anyone’s contract. The employees sought to argue that the variation of their terms was void under regulation 4(4) TUPE and they brought claims for unlawful deductions from wages.

The Tribunal rejected the claims and found that the reason for the variation was not the transfer but the fact that the allowance was outdated and unjustified. The employees appealed.

The decision

The EAT held that the reason for the employer’s decision was not the transfer but because the allowance was outdated. They also noted that the belief that the payment was outdated and unjustified did not arise purely on or because of the transfer, but it was a pre-existing belief. As such, they held that the Tribunal had reached a permissible conclusion that the variation was not for a reason connected with the transfer.

The lessons

Tabberer highlights that the Tribunal will look behind the reasoning for the change, as such, employers should not be scared to make contractual changes if the reasoning for it is unconnected to the transfer or if in fact they can rely on the ETO defence.

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