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TUPE and Variation of Contract

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[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

When is an agreed variation of the employment contract following a TUPE transfer effective? When the transfer is not the sole or principal reason for the variation, says the EAT in Smith v Trustees of Brooklands College.

The employees, who were teaching assistants, were employed by Spelthorne College. They enjoyed unusual employment terms. They were paid as full time employees when they only worked part time. In August 2007 the college was transferred, under TUPE, to Brooklands. Afterwards, Brooklands realised the claimants were on terms out of step with the rest of the sector. It sought to bring the contracts into line. Reluctantly, the employees agreed a detrimental adjustment to achieve this, effective from 1 January 2010. Subsequently, the employees claimed the variation in pay was ineffective, since Reg 4(4) of TUPE makes a purported variation of an employment contract void if the sole or principal reason is the transfer itself.

The claimants argued that "but for" the TUPE transfer, the variation would not have taken place. But, said HHJ McMullen, that was not the test. The question was, what was the reason for the change? What caused the employer to do it? This was a clear question of fact and the finding of the employment judge that the variation was not by reason of the transfer would not be disturbed. The judge had correctly had regard to what was in the employer's mind (the need to correct an obvious error in pay), and also the distance between the transfer and the variation, and his decision was "unimpeachable".