INSTITUTE OF EMPLOYMENT RIGHTS

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INSTITUTE OF EMPLOYMENT RIGHTS TUPE Regulations An Overview Richard Arthur, Thompsons Solicitors 18 November 2009

BUSINESS TRANSFERS “A transfer of an undertaking, business or part of an undertaking…..to another person where there is a transfer of an economic entity which retains its identity”. (Reg.3(1)(a)). An “economic entity” is: “An organised grouping of resources which has the objective of pursuing an economic activity……” (Reg. 3(2)). “Retention of identity” means that the link between the workers and materials and a similar economic activity must be retained: Klarenberg v Ferrotron Technologies GmbH [2009] IRLR 301.

SERVICE PROVISION CHANGES “Activities” cease to be carried out by a client/contractor; “Organised grouping of employees” whose “principal purpose” is the carrying out of the activities; Not in connection with a “single specific event or task of short duration” and Activities not wholly or mainly the supply of goods or services.

SERVICE PROVISION CHANGES The activities do not have to be identical after the transfer: Metropolitan Resources Limited v (1) Churchill Dulwich Limited and (2) Martin Cambridge UKEAT/0286/08; There may be no service provision change if the service is so fragmented that no transferee can be identified: Thomas-James and others v Cornwall County Council ET Case Nos. 1701021-2 and Clearsprings Management Limited v Arkins and others UKEAT/0054/08/LA; and It may be possible to identify a transferee even if the service is split: Kimberley Group Housing Limited v Hambley and others [2008] ICR 1030

THE PUBLIC SECTOR Cabinet Office Statement of Practice on Staff Transfers in the Public Sector 2000; Code of Practice on Workforce Matters in Local Authority Service Contracts 2003; Code of Practice on Workforce Matters in Public Sector Service Contracts 2005.

WHO TRANSFERS? Employees “assigned” to the undertaking; The Botzen case; Factors may include time spent, value added to parts of the business, terms of the contract and how cost allocated: Duncan Webb Offset (Maidstone) Limited Ltd v Cooper [1985] IRLR 633

THE RIGHT TO OBJECT “Where the transfer involves ….a substantial change in working conditions to the material detriment of a person whose contract is or would be transferred, such an employee may treat the contract as terminated” (Reg.4(7) and (9); No need for a fundamental breach of contract; Tapere v South London and Maudsley NHS Trust; High risk strategy; and NHS Retention of Employment Model.

CONTRACTUAL CHANGES If the sole or principal reason for the variation is (1) the transfer itself or (2) a reason connected with the transfer that is not an ETO reason, the variation is void; ETO reason “…..entailing changes in the workforce”; Change in headcount or job description; Variations permitted where the reason is connected with the transfer, and is an ETO reason; Does that comply with the ARD? Power v Regent Security Services Limited [2007] IRLR 226

INFORMATION AND CONSULTATION “Long enough before the transfer to enable consultation to take place…”; Fact of transfer, date and reasons; Legal, economic and social implications for affected employees; “Measures” old employer envisages it will take; and “Measures” old employer envisages new employer will take

INFORMATION AND CONSULTATION The transferee’s obligation to inform and consult (certainly in relation to transferred employees) ends at the date of transfer: Amicus v City Building (Glasgow) Limited and others [2009] IRLR 253 An employer’s genuinely held belief that there was no TUPE transfer excuses it from a failure to inform or consult: Royal Mail Group Limited v Communication Workers Union [2009] IRLR 1046