The Employment Appeal Tribunal (EAT) has held in Tabberer v Mears Ltd that the removal by an employer of an "outdated and unjustified" contractual allowance was not void when it was removed after a transfer.
The claimants were electricians who had originally been employed by Birmingham City Council (BCC). Within BCC electricians had enjoyed payments of Electricians Travel Time Allowance (ETTA), although the reasons for this allowance had ceased to exist over the years (it dated from 1958 and replaced a productivity bonus). It was an allowance that continued to be paid following a number of TUPE transfers until the transfer to Mears in 2008. Mears questioned whether the electricians remained entitled to the ETTA and, following its enquiries, ceased the payments on the basis that the eligibility criteria for the allowances were no longer made out. The ETTA was held to be contractual and Mears gave notice that it was bringing the payment to an end. The claimants argued that the variation was void under regulation 4(4) of TUPE as it was connected with a transfer and brought claims for unlawful deductions from wages.
The EAT found that the variation of the claimants' terms of employment was due to the respondent's conclusion that the ETTA was an outdated and unjustified allowance, and that this was a reason unrelated to the earlier transfer to Mears. While it was true that the employer had been faced with the issue on the transfer, it was an issue that confronted management regardless of any transfer, and it would be no different to a new manager coming into the workplace and learning of such an entitlement.
Take note: While this case is a useful example of a permitted change to terms and conditions, it was decided under the TUPE regulations before they were amended in January 2014. However, it is likely that the decision would have been the same under the new regulations which state that post-transfer changes will be void if the sole or principal reason for the change is the transfer.
The question to ask is what is the reason the transferee acted as it did? Here it was clear that the underlying reason for the change was one which would have applied regardless of the transfer.
For more information on the latest TUPE cases, see our September TUPE bulletin.
This article is taken from HR Law - October 2018
