Certificate in Human Resource Management Employment Law Session Three Change and Reorganisation 1/1/2019

Aims and objectives Identify the internal and external reasons for change Explain contractual issues in managing change Consider the principles of law in redundancy and business transfers

Internal Reasons for Change: Activity: In your pairs spend 10 minutes considering what they may be – think about your own organisation first

External reasons for change: Competition Technological change Political change Legal change

Change can involve four broad frameworks of employment law: Variation of contracts of employment Flexibility within contract of employment Redundancy and redeployment Transfer of Undertakings

Variation of Contracts of Employment Contract of employment is an agreement and therefore cannot be changed by the employer at will Changes can be enacted by ‘consensual variation’ i.e. discussion and agreement between parties to the contract Individuals Groups, through collective agreements with Trade unions

Variation of Contracts of Employment Employers may, after consultation and due notice, terminate the existing contract A new contract may be offered encompassing changed terms and conditions. Both of the above are subject to the law with regard to Transfer of Undertakings (Protection of Employment regulations) 2006, more commonly known as TUPE regs, if it is a transfer situation.

Flexibility and the Contract of Employment May be implied or expressed terms May be subject to adaption of changes in organisational operations, e.g. introduction/changes to technology and therefore an implied term that employees will adapt to that change

Flexibility and the Contract of Employment Express terms: Mobility clauses and place of work variations have regard to reasonableness on the part of the employer Transfers between posts are required to be held without malice or unfairness

Redundancy and Redeployment Redundancy occurs only when the employer: Ceases to carry on the business in which the employee was employed Ceases to carry on the business at the place where the employee was employed There is no longer the work for which the employee was employed

Consultation If your employer is making 20 or more employees redundant at the same time, the consultation should take place between your employer and a representative (rep). This will either be: a trade union rep (if you’re represented by a trade union) an elected employee rep (if you’re not represented by a trade union, or if your employer doesn’t recognise your trade union) Collective consultations must cover: ways to avoid redundancies the reasons for redundancies how to keep the number of dismissals to a minimum how to limit the effects for employees involved, eg by offering retraining (ACAS)

Consultation Period Length of consultation There’s no time limit for how long the period of consultation should be, but the minimum is: 20 to 99 redundancies - the consultation must start at least 30 days before any dismissals take effect 100 or more redundancies - the consultation must start at least 45 days before any dismissals take effect

Selection Criteria What might be used as selection criteria? What must the employer disclose to the workforce?

Redundancy Notice Periods If an employer has selected an employee for redundancy they must be given a notice period before their employment ends. The statutory redundancy notice periods are: The employee must be given a notice period before the employment ends. The statutory redundancy notice periods are: at least one week’s notice if employed between one month and 2 years one week’s notice for each year if employed between 2 and 12 years 12 weeks’ notice if employed for 12 years or more An employer may give more than the statutory minimum, but they can’t give you less.

Redundancy Pay Statutory redundancy pay basics An employee has the right to a statutory redundancy payment if they have worked continuously for their employer for at least two years and they are being made redundant. Statutory Redundancy pay is also due when a fixed-term contract of two years or more expires and is not renewed because of redundancy.

Statutory Redundancy Pay The calculation for statutory redundancy pay is based on: how long the employee has been continuously employed Their age Their weekly pay, up to a certain limit £479 - 1 Feb 2016) Maximum number of years of employment that can be taken in to account is 20

Employees not entitled to a Statutory Redundancy Payment members of the armed forces House of Lords and House of Commons staff some apprentices - although the contract should be checked domestic servants working in private homes who are members of the employer’s immediate close family share fishermen paid only by a share in the proceeds of the catch Crown servants or employees in a public office employees of the government of an overseas territory

TUPE Transfer of Undertakings – Protection of Employment

TUPE There are two types of transfers that are protected under TUPE: business transfers service provision changes – this was planned to be abolished under current changes but the Government changed it’s view.

Business Transfers This is where a business or part of a business moves from one employer to another. This can include mergers where 2 companies close and combine to form a new one. The identity of the employer must change, to be protected under TUPE during a business transfer.

Service Provision Service provision changes This is when: a service provided in-house (eg cleaning, workplace catering) is awarded to a contractor a contract ends and is given to a new contractor a contract ends and the work is transferred in- house by the former customer Transfers within the public sector aren’t usually covered by TUPE but some transfers from the public sector into the private sector are. However, public-sector employees get similar protection. 

TUPE Protection To be protected under TUPE, the business transfer or service provision change, must take place from a UK-based company. It is possible that some transfers will be a service provision change and business transfer. For example, an employer outsourcing a service.

TUPE Protection If an employee is involved in a transfer that qualifies for TUPE protection they should be guaranteed that their: job transfers over to the new company employment terms and conditions transfer continuity of employment is maintained

Transfers where employees work outside of the UK If an employee is employed by a UK employer but based outside of the UK, they could still be protected by TUPE. The important part of a business transfer is that it involves a UK business and their ‘undertakings’ in the UK. (eg premises, assets, fixtures & fittings, employees) but the employee is part of a team that spends the majority of their working week outside the UK (for example as part of a sales team) then they should be covered under TUPE.

New Employer – Transferee Activity: When a TUPE-protected transfer takes place, the new employer takes over nearly all rights and obligations of the employment contract, including what? What must the new and old employers do before the TUPE happens?

Before the Transfer Failure to consult can result in affected employees claiming a ‘protective award’ of up to 13 weeks (actual) pay. Provision of Information Regulation 11 This information must be provided in writing or another readily accessible form at least 28 days before the transfer

After the Transfer An employer cannot change employment terms and conditions if the reason they want to make the change is because of: the transfer itself a reason connected with the transfer that is not an ‘economic, technical or organisational reason’ (ETO)

After the Transfer cont.. Automatically unfair dismissal – if the sole or principle reason was (A) the transfer itself -(B) a reason connected to the transfer which was not an ETO entailing changes to the workforce.

After the Transfer cont.. Also if an employer wanted to change employment terms and conditions for a reason not connected with the transfer they could. For example, if the new employer suddenly lost an expected order by a manufacturing company they might need to change the workforce’s employment terms and conditions.

Refusal to Transfer An employee can inform the new or old employer that they object to the transfer. This has the unhelpful effect of terminating their contract at the point of transfer. (Reg 4(7)) If the transfer would involve a ‘substantial change in the working conditions’ which is to the employee’s ‘material detriment’ (Reg 4(9))

Pension Rights If the old employer offered an employee a company pension scheme, the new employer does not have to continue an identical company pension. The new employer should offer a minimum occupational pension matching contributions of up to six per cent of the employee’s salary into a stakeholder pension, or equivalent alternative.

Rights to Redundancy Payments After the transfer, the new employer may want to cut the number of employees. If an employee(s) are made redundant or dismissed for an economic or technical reason, they may have the right to a redundancy payment.

Redundancy following a TUPE Transfer An employer cannot select employees for redundancy just because they transferred to the company. If the employer has applied fair and objective selection criteria to making redundancies and an employee who has just transferred is selected for redundancy then this would be fair. For example, if the new employer has to close down part of a company because it is not performing and so has no business need for employees with an specific employee’s specialist skill, they would be entitled to qualify for the same redundancy rights as any other employee.