TUPE: Removal of Unjustified Travel Allowance Not Void

In Tabberer v Mears Ltd, the EAT found that the removal by an employer of a contractual allowance that they deemed to be ‘outdated and unjustified’ was not void under TUPE following a transfer.

The Claimants were electricians, formerly employed by Birmingham City Council, who since 1958 had been entitled to ‘Electricians Travel Time Allowance’ (ETTA). This bonus was held to be contractual. The Respondents no longer wished to pay ETTA to the Claimants and deemed the bonus to be ‘outdated and unjustified’. As a result, they gave notice to vary the Claimants’ contracts and stop the payment of ETTA.

The Claimants argued that the variation to their contracts should be void under Regulation 4(4) of TUPE as it was connected with a transfer. Both the Tribunal and the EAT disagreed with the Claimants’ argument and found that the Respondent had removed the bonus as they felt that it was ‘outdated and unjustified’, rather than it being connected with a transfer.

The approach taken by the EAT, which was to ask, ‘what is the reason? What caused the employer to do what it did?’, should be borne in mind by employers. Should an employer wish to vary the contracts of employees following a transfer, the Tribunal will examine the reason/s for making the variation when assessing any claims brought as a result. Employers should have regard to this decision when making any such variations.