TUPE or not TUPE

TheSpiddalKid

Regarding pay increases, it is situation and circumstances-dependent. Still, it comes down to what in law is described as static or dynamic TUPE (I'll explain these more below).

To explain the legal position, I will use the recently announced pay increase from the NHS as it is what I know best. The basic details of this was that on 2nd May 2023, the NHS Staff Council formally agreed on a pay increase of 5% for 2023/24 pay rates. Let's ignore the backpay to make this easier. With an implementation in June's pay which is usually around 25-28 June for most trusts.

If there were a situation in NHS Trust ABC where a group of staff were to transfer out to CareOrg PLC on 1st June 2023, then they would still be entitled to the 5% pay increase, with back pay to 1st April 2023, payable by CareOrg PLC. What goes on in the background regarding NHS Trust ABC paying CareOrg PLC for April – May is immaterial, as once a pay award is agreed upon pre-transfer, the new organisation is contractually obligated to honour it. This is called a static approach to TUPE.

 If the pay deal reached in May 2023 had included future year increases for the 2024/25 financial year (or beyond). Careorg PLC would still be duty-bound to honour them.

If, however, in May 2024, NHS Employers reach a new deal for the pay year 2024/25, then CareOrg PLC is not legally or contractually obligated to implement it, the reason being is because it is not a member of NHS Employers and therefore is not a party to the talks or the agreement, therefore upon TUPE any agreements are frozen in time, including any pay structures, save for any pre-agreed increases that were agreed before transfer.

The dynamic approach to TUPE would be the opposite of this but was ruled as not being the approach by the ECJ and Supreme Court (please see: https://www.bevanbrittan.com/insights/articles/2013/tuperegulationsofficiallystatic/)