Case C-426/11: Mark Alemo-Herron and Others v. Parkwood Leisure Ltd.

Introduction

This issue was about collective agreements that are negotiated regularly, whether they can bind an employer following a transer of employment. It is really a fundamental question, mainly in contracting out services, when the new employer may wish to make savings by not increasing wages. In this case it should be decided if in the transferred employees' terms and conditions of employment can continue to rise due to agreements made collectively between the old employer and the recognised trade union, even though the new employer is not party of the discussions.
In a similar German case, in the Werhof v. Freeway Traffic Systems GmbH & Co KG, which ruled along the static interpretation lines, the ECJ accepted the German government's argument that only the collective agreement in force at the time of the transfer is applicable. Subsequent changes agreed between parties cannot be imposed on the transferee who is not involved in the collective negotiations.

Facts and proceedings before the UK Courts

In 2002, the London Borough of Lewisham’s leisure activities were contracted out to CCL Limited, a private sector undertaking. The employees, who were working in that department, became part of the staff of the second mentioned company. In May 2004, CCL Limited purchased the business to Parkwood Leisure Limited, to another private sector undertaking.
Although the activites belonged to the council, the employees and council together enjoyed the benefits of the terms and conditions negotiated by the National Joint Council for Local Government Services, the local government collective bargaining body. These agreements were not binding but contained in the contracts of employment.
The following contractual term was stated in them:
‘During your employment with the Council your terms and