TUPE Training Damian Brown Old Square Chambers

Overview History Overview –Outsourcing –Changing Terms and Conditions –Dismissals –Collective Agreements –Recognition –Insolvency –Pensions –Workplace Information –Consultation

Transfers Regulations will apply if there is a transfer of an economic entity which retains its identity a service provision change – this is where (i) activities cease to be carried out by a person ("a client") on his own behalf and are carried out instead by another person on the client's behalf ("a contractor"); (ii) activities cease to be carried out by a contractor on a client's behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by another person ("a subsequent contractor") on the client's behalf; or (iii) activities cease to be carried out by a contractor or a subsequent contractor on a client's behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by the client on his own behalf, and

Transfers there is an organised grouping of employees situated in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client; the client intends that the activities will, following the service provision change, be carried out by the transferee other than in connection with a single specific event or task of short-term duration; and the activities concerned do not consist wholly or mainly of the supply of goods for the client's use.

Transfers economic entity is –"an organised grouping of employees….which has as its principal purpose the carrying out of the activities concerned on behalf of the client.“ can include just one employee but they must be dedicated.

Transfers Who transfers? –employees `assigned to the organised grouping of resources or employees that is subject to the relevant transfer.’ –This replaces the words: “any person employed in the undertaking or part transferred”

Absent employees  An employee can be assigned to an undertaking even though absent from work  The key question is where the employee would have been required to work if not absent – see Fairhurst Ward

Temp assignment Exclusion of temporary assignments The new regulation 2 says: ‘assigned’ means assigned other than on a temporary basis But employees who have been permanently re- assigned will transfer, even if redeployed shortly before the transfer – see Securicor Guarding

Changes to terms and conditions Changes to terms and conditions will be permitted –if the sole or principal reason for the change is either unconnected to the transfer or has been made for an economic, technical or organisational (ETO) reason entailing changes in the workforce. –If agreed with employee representatives (even if there is no ETO reason) in some insolvency situations

Transfer-Related Dismissals Three different scenarios: –dismissal = automatically unfair if because of the transfer itself or for a reason connected with the transfer (unless that reason is an ETO reason entailing changes in the workforce). –dismissal = potentially fair if the reason is connected with the transfer and also an ETO –dismissal not by reason of the transfer or connected to it will fall to be dealt with under the usual unfair dismissal principles.

Collective Agreements and Recognition Even if a collective agreement is not legally enforceable it will continue to have effect as between the union and transferee. Where the organised grouping of resources or employees maintains its identity distinct from the remainder of the transferee’s undertaking any recognition will continue although it may be varied or rescinded in the usual manner.

Insolvency statutory debts to employees (e.g. arrears of pay, payment in lieu of notice, holiday pay, the basic award for unfair dismissal compensation and statutory redundancy payments) will be met by the National Insurance Fund instead of passing to the transferee. Transferee will only inherit debts that cannot be met in this way.

Insolvency seller, buyer or insolvency practitioner is also permitted under the Regulations to make changes to terms and conditions of employment where they are agreed with the appropriate employee representatives must be with the intention of safeguarding employment opportunities by ensuring survival of the undertaking or business. Where no union representatives the variation must take place in a prescribed way: –the agreement will have to be in writing and signed by or on behalf of the representative –employer must supply all affected employees with a copy of the draft agreement and guidance to help them understand it.

Pensions If transferee’s scheme is final salary then: –either the value of benefits provided for by the transferee’s scheme must be at least 6% of pensionable pay for each year of employment or –the scheme must provide for the employer to make `relevant contributions’ which match the employee’s contributions up to a maximum of 6% of basic pay. The same standard applies in respect of the other pension types. In addition if a transferee fails to make as generous a pension provision as the transferor there will be no claim for constructive dismissal.

Workforce Information New duty to provide information to buyers at least two weeks prior to transfer. `employee liability information’ includes: –the identity and age of employees; –the written statement of employment particulars (as required under s1 of the Employment Rights Act 1996); –details of disciplinary action taken against employees and grievance procedures taken by employees under the statutory dispute resolution rules within the previous two years; –information about any court or tribunal case, claim or action brought by an employee against the seller within the previous two years (or where the seller has reasonable grounds to believe that such action, etc., might be brought by an employee); and –details of any collective agreement which will take effect post-transfer in relation to employees. information should be in writing (or other accessible form) and should be no more than two weeks old as at the date when it is notified to the buyer. transferee must also provide details of any subsequent changes to the information. Any attempt to contract out of the duty is void although it does not appear to prohibit changing terms shortly before the transfer so long as the transferee is notified.

Workforce Information It must be provided `in good time’, subject to a special circumstances defence, but in any event before the transfer. An employment tribunal (High Court was proposed in the draft regs) can award a buyer compensation starting at a minimum of £500 per employee for whom the information was not provided (unless it considers it just and equitable to award a lesser sum).

Consultation joint and several liability for transferor/transferee – effectively the employees can choose who to sue Obligation to consult placed on employer of affected employees