Changes to individual contract terms




Changes to individual contract terms are void if the sole or main reason for the changes is the transfer, unless it is a valid economic, technical or organisational (ETO) reason entailing changes to the workforce (regulations 4(4) and 4(5), TUPE, as amended). What amounts to an “economic, technical or organisational reason” and a “change to the workforce” is explained on page 457.




“Harmonisation” of individual contract terms (that is, cutting pay or other terms and conditions on a transfer to bring them into line with those of the employer’s existing workforce) is against the law. This is because there is no valid ETO reason for this kind of change.



An employer can impose a change without infringing TUPE if the employment contract already contains a valid express contract term that allows this (for example, a contract term that permits “reasonable” unilateral changes to terms and conditions). A change that relies on this kind of term can be made without infringing TUPE whether or not there is a valid ETO reason justifying the change (regulation 4(5)(b), TUPE, as amended). There are limits to the extent to which tribunals will permit unilateral changes to terms and conditions in reliance on this kind of term (see Chapter 3, pages 77-78).



The law allows employees to accept beneficial changes that are made because of a transfer even without an ETO reason. For example, TUPE does not prevent pay increases to harmonise wages upwards. The government’s TUPE guidance, revised in 2014, says that changes that are “entirely positive from the employee’s perspective” are not prevented by TUPE because the underlying purpose of the ARD is to ensure that employees are not penalised. Changes that employees regard as beneficial and wish to enforce are not void (Power v Regent Services Limited [2007] EWCA Civ 1188).