Worrall v Wilmott Dixon
Regulation 4 of the 2006 Transfer of Undertakings (Protection of Employment) Regulations (TUPE) states that, after a transfer, contracts have to be treated as though they had been made between the original employee and the new employer. In Worrall v Wilmott Dixon, the Employment Appeal Tribunal (EAT) said, however, that a change in the law could remove a contract term that was in effect at the time of the TUPE transfer.
Basic facts
Mr Worrall had worked for Birmingham City Council for many years. In 1993, the Council reached a collective redeployment and redundancy agreement with the recognised trade unions.
Clause 3.2 (contained in the Council’s Personnel Handbook) said that the Council could exercise its discretion in accordance with superannuation regulations and add at least five years’ service to that of employees made voluntarily redundant.
Although local government regulations were introduced in 2002 which stated that employing authorities could award a “credited period” to anyone who was eligible, these were repealed in 2006.
After his employment was transferred several times under TUPE, Mr Worrall applied for voluntary redundancy in April 2008. However, he was told that as the regulations allowing employers to award “added years” had been repealed, his service years could not be increased.
Mr Worral brought a tribunal claim, arguing that his new employer was bound by the 1993 collective agreement as a result of the successive TUPE transfers which ended up with his employment ultimately being transferred to Wilmott Dixon.
Tribunal decision
But the tribunal disagreed. It said that although clause 3.2 was incorporated into Mr Worrall’s contract, the term “added years” was understood by all the parties to be a reference to the statutory concept of “credited period” under the 2000 regulations.
As these had been repealed in 2006, the company did not have any obligation or a discretion to grant the “added years” referred to in clause 3.2.
EAT decision
The EAT dismissed Mr Worrall’s appeal, saying that clause 3.2 had not been incorporated into his contract because the terms of the agreement had not been brought to his notice.
As he could not be bound by terms he had not seen, equally he could not benefit from them. Just because the document was available to him was not enough to prove he had had notice of the term or that he had agreed to it.
However, it then went on to say that even if the clause had been incorporated, the tribunal had been right to conclude that the power of the local authority to award “added years” had been removed when the regulations were repealed in 2006.
It took the view that the decisions of the Court of Appeal in Parkwood Leisure Limited v Alemo Heron and the European Court of Justice in Werhof v Freeway Tram System GmbH & Co stating that the rights of the parties under collective agreements had to be looked at the time of the transfer, did not mean that subsequent statutory changes could be ignored. Instead, they just prevented parties from being bound by “future changes to collective agreements.”
It concluded that the 2006 regulations had to be taken into account which meant that Mr Worrall’s appeal could not succeed.