The appellant employees (A) appealed against a decision that their entitlement to pay increases negotiated by collective agreement was not protected under the Transfer of Undertaking (Protection of Employment) Regulations 1981 (TUPE) reg.5 post-transfer of their employment to the respondent employer (B). A had been entitled under their contracts of employment with a local authority to pay increases in accordance with collective agreements negotiated by the National Joint Council for Local Government Services (NJC). Their contracts were transferred under the Regulations to a privatesector employer and then further transferred to P, also a private-sector employer.

P refused to recognise a pay settlement negotiated by the NJC after the transfer. A claimed that P was obliged to comply with the