Their employment contracts gave them the right to pay increases in line with the National Joint Council for Local Government Services’ collective agreement.

Though it did initially uprate pay, while expressly stating that it did so without liability, from 2004 Parkwood did not want to comply with NJC updates negotiated for a period from 2004 to 2007.

McMullen J held the Tribunal was wrong to not follow domestic cases, such as Whent v T Cartledge Ltd[3] showing that employees had rights beyond those acknowledged in Werhof.

Rimer LJ held there was nothing in TUPER 2006 regulation 4[4] to support the contention that the UK meant to give greater rights than those found in BTD 2001 article 3(1).

The view that was taken in those decisions about the effect of conditions of the kind that the appellants rely on in this case was, in my opinion, entirely consistent with the common law principle of freedom of contract.

The reason was that Parkwood Leisure Ltd would not be represented on the National Joint Committee that set the new "dynamic" terms that would form a part of the employees' contracts.

... a dynamic clause referring to collective agreements negotiated and agreed after the date of transfer of the undertaking concerned that are intended to regulate changes in working conditions in the public sector is liable to limit considerably the room for manoeuvre necessary for a private transferee to make such adjustments and changes.

In those circumstances, the transferee can neither assert its interests effectively in a contractual process nor negotiate the aspects determining changes in working conditions for its employees with a view to its future economic activity.

In those circumstances, 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.The Alemo-Herron decision of the Court of Appeal would imply that a collective agreement would rank with secondary status compared to other "dynamic" contract terms, such as an inflation-linked index of pay increases.

Accordingly a floor of rights set by the Court of Justice of the European Union would not logically affect the higher protection offered by UK law.