Advocate-General, CJEU, London Borough of Lewisham, Parkwood Leisure, Parkwood Leisure Ltd v Alemo-Herron, Private sector, Public sector, Transfer of Undertakings (Protection of Employment) Regulations 2006
The Advocate-General has issued his Opinion in the (European Court) case of Parkwood Leisure v Alemo-Herron.
The question posed is whether public sector employees who are subject to industry or sector-wide negotiated terms, remain entitled to the benefit of increases in pay negotiated under those terms (vi.z. after they have transferred)? Although an Opinion only, the Advocate-General support the view that such rights to pay increases do survive transfer.
The issue the case concerns is clearly important for all private sector employers who undertake public sector work.
The claimants were originally employed by London Borough of Lewisham. Their contracts stated they were entitled to pay ‘in accordance with collective agreements negotiated from time to time by the National Joint Council for Local Government Services…’.
In 2002, as a result of out-sourcing, the claimants’ employment transferred to a private sector company which was acquired by Parkwood Leisure Ltd (Parkwood) shortly thereafter. The TUPE regulations applied (albeit the 1981 version), preserving their contractual terms. When the Council subsequently negotiated a pay increase with the
trade unions, therefore, relying on their contractual terms, the employees who had transferred employment to Parkwood similarly claimed the pay rise. Parkwood resisted, not having been party to the pay negotiations and not recognising any of the relevant unions.
The court judgment itself will not be available for another few weeks but, although the CJEU is not bound to agree with the A-G’s Opinion, it appears likely it will.
This opinion and the court decision that is likely to follow, is not unexpected but I suspected many private sector business managers will now be looking at their commercial contracts and hoping they had the right clauses in place!
It will also be interesting to see how the court defines applies the contractual benefit (pay only or chooses to apply the entire third party contract to the new employer).