HM Insights

Removing employment benefits following a TUPE transfer

If a business removes a benefit soon after a TUPE transfer, can that be lawful?

Yes said the Employment Appeal Tribunal in a recent case (Taberrer v Mears). The case concerned a travel allowance which was a contractual entitlement, which transferred (along with all other contractual rights) over from the transferor to transferee with the employees.

The tribunal held, and the EAT agreed, that the removal of the allowance was because the transferee determined that it was outdated and unjustified. It was not, therefore, for a reason related to or because of the transfer, even although the employer (the transferee) had found out about the payment of the allowance on the occasion of the transfer.

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Explaining that the decision was separate to the context of the decision, and being satisfied that the reasons for the decision were thus separate to the context, the employer was not stopped by the TUPE regulations from making the change.

Context is everything

The decision is a very useful illustration that as restrictive as the TUPE regulations are, context and circumstance is everything.

The principle illustrated by this case only relates to the application of TUPE; the case does not mean that employers can necessarily lawfully remove benefits per se. The employer will still need to carefully consider all risks associated with these types of changes, including if and how it is generally lawful to remove the benefit, further to employment rights under contract and statute.

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