Does an employer have to honour the terms of a collective agreement inherited in a TUPE situation?

In a TUPE situation, collective agreements can transfer from the old employer to the new employer. It’s important that the new (transferee) employer is aware of a collective agreement as it can affect a variety of contractual employment terms of transferring employees such as pay scales, pay rises, redundancy arrangements and/or working hours. To a large extent this follows the automatic transfer of employment contracts in a TUPE situation, as collective rights that are incorporated into employment contracts of transferring employees will transfer.

In this area we’re also awaiting the Supreme Court’s decision in the 2011 case Parkwood Leisure Ltd v Alemo Herron. The issue in this case is