Beneficial changes

The law allows employees to accept changes they regard as beneficial such as a pay rise, made because of a transfer, even if there is no ETO reason. The 2014 BEIS TUPE guidance says that changes that are “entirely positive from the employee’s perspective” are not prevented by TUPE, because the underlying purpose of the Acquired Rights Directive (ARD) is to ensure employees are not penalised. Changes that employees regard as beneficial and wish to enforce are not void.

If an employer’s main purpose in offering a benefit to transferring employees is to bring their individual contract terms into line with those of the transferee’s workforce, for example offering extra pay in return for giving up valuable holiday rights, the law suggests that the transferring employees can retain the benefit offered (the extra pay) while at the same time holding onto their existing terms (the holiday rights). This was decided in an important case, Power v Regent Services Limited [2007] EWCA Civ. 1188. This ruling provides a powerful deterrent to employer’s wanting to “harmonise” individual contract terms after a transfer. “Harmonisation” of individual contract terms on a TUPE transfer is unlawful.