The European Court of Justice (ECJ) has ruled that trade union collective agreements that are incorporated into the contracts of employees should not be protected during a transfer.
The contracts of Parkwood Leisure employees stated that their wages should rise “from time to time” according to collective bargaining agreements, but the Court ruled that such “dynamic” agreements do not need to be adhered to after a transfer has taken place.
However, the collectively-agreed pay rate of workers at the time of their transfer continues to be protected under TUPE regulations.
The decision means the ECJ has shifted the traditional interpretation of TUPE as a set of legislation to protect workers, to concentrate on the Rights of Establishment (i.e. employers) instead.
In a statement, the Court said: “The transferee’s contractual freedom is seriously reduced to the point that such a limitation is liable to adversely affect the very essence of its freedom to conduct a business”.
RMT general secretary Bob Crow said that collective bargaining rights were being hollowed out by EU diktat and EU court rulings which encourage social dumping and severely weakens trade union powers to defend workers.
“ECJ decisions in the Viking, Laval, Ruffert and Luxemburg ECJ cases take us back over 100 years to the Taff Vale judgment when any trade union activity was perceived by the bosses to be ‘in restraint of trade.
“Global companies operating in EU states are free under EU law to tender for procurement building and service contracts in Britain and hire cheaper labour from abroad,” he said.