TUPE

What are the key considerations in a TUPE transfer within Local Government?

Barbara Lond, December 2010

TUPE
Outline of presentation 1. What is a relevant transfer 2. General considerations applying to transfers 3. Public sector Cabinet Office Statement of Practice 4. Key considerations from important case law 5. Other considerations 6. Project Planning 7. Due Diligence 8. Conclusion and implications

TUPE
1. WHAT IS A RELEVANT TRANSFER?

When the whole or part of a business or undertaking is transferred from one employer to another as a going concern this is known as a business transfer. Also where a client engages a contractor on his behalf or reassigns such a contract including bringing the work back in-house. This is known as service provision change.

TUPE
2. General considerations applying to transfers:
TUPE Regulations 2006 apply Protection employees on transfer of the business in which they are employed Regs apply to cover business transfer, ie. A transfer of an economic entity which retains identity after the transfer and service provision changes Protected employees are those who are employed immediately before the transfer or who are dismissed in advance but in connection with transfer unless reason was for ETO Where part of an undertaking is transferred, an employee must have been assigned to that part even if s/he has carried out some duties for nontransferred parts It is automatically unfair to dismiss (including constructive) an employee in connection with transfer except for ETO Where an employee is covered, rights, liabilities and contractual terms transfer, eg. Wages owed, liability for previous discriminatory acts and continuous service General discrimination law applies Pensions? Implications and adequate/thorough due diligence, project planning (ie. Stakeholders/work streams /communication arrangements)

TUPE
3. Code of Practice for PS Contracts a)Incorporates the Cabinet office Statement Eg. Best Practice on ICE,Methods, Communication, etc. b) Introduced new provisions for new recruits Fair and reasonable conditions which are overall no less favourable than those of transferred employees (however, as from 13 Dec two-tier workforce does not apply??) Terms and conditions to be considered in the round as a package Consultation with trade union or elected employee representatives to agree terms c) Pensions?? (Best Value Authorities Staff Transfers (Pensions) Direction 2007 d) On retender new service provider to comply with similar provisions

TUPE
Cabinet Office on ICE (Also Article 7, EC law) Methods of information and consultation the type of arrangements to be set up, including whether there will be representatives of employees, and/or direct information and consultation with the workforce; whether any hierarchy of structures will be set up, e.g. at national, regional or local level; how representatives of employees are to be chosen or appointed any facilities and time off arrangements for employee representatives; any obligations for employee representatives to report back to the workforce or to seek its views; the nature of any direct forms of information and consultation with the workforce.

TUPE
4. Key considerations from important case law

TUPE: transfer of collective agreements In Parkwood Leisure Ltd v Alemo-Herron and others Court of Appeal held that following the TUPE transfer of employees whose contracts contained a term that their pay was negotiated in accordance with collective arrangements, the transferee employer who was not a party to those arrangements was not bound by collectively agreed pay rises made after the date of transfer. In Worrall and ors v Wilmott Dixon Partnerships and anr however, where the transferee employer was bound by statutory changes made after a TUPE transfer which impacted on a collective agreement that transferred. Implications and adequate/thorough due diligence, project planning (ie. Stakeholders/work streams /communication arrangements)

TUPE

TUPE and unfair dismissal In London Metropolitan University v Sackur (UKEAT/0286/06/ZT), the EAT held that it was automatically unfair to dismiss and re-engage a group of employees on harmonised terms and conditions following a TUPE transfer. The decision to harmonise terms and conditions following a TUPE transfer cannot be a valid economic, technical or organisational reason that could potential justify the dismissals. Implications and adequate/thorough due diligence, project planning (ie. Stakeholders/work streams /communication arrangements)

TUPE

TUPE and variation of contract In Power v Regent Security Services Ltd (UKEAT 0499/06), the EAT held that in a transfer situation, the TUPE Regulations do not prevent the employee relying upon an agreement reached with the new employer (the transferee) to vary their contract where the variation is to their advantage. The Regulations only render a variation void if the transferee seeks to change the contract by reason of the transfer where the variation is to the employees detriment. Implications and adequate/thorough due diligence, project planning (ie. Stakeholders/work streams /communication arrangements)

TUPE

TUPE: ETO reason for dismissal Where a transferor employer seeks to rely on an economic, technical or organisational (ETO) reason for effecting redundancies in a TUPE situation, it must have its own reason for doing so, and cannot rely on a reason of the transferee. Implications and adequate/thorough due diligence, project planning (ie. Stakeholders/work streams /communication arrangements)

TUPE

TUPE: post transfer variations In Regent Security Services Ltd v Power [2008] IRLR 66, the Court of Appeal upheld the decision of the EAT that an employee transferred under TUPE is entitled to rely upon a post-transfer beneficial variation in his terms and conditions of employment. Implications and adequate/thorough due diligence, project planning (ie. Stakeholders/work streams /communication arrangements)

TUPE
5. Other considerations

Equal Pay issues? Job Evaluation New Equality Act (Law Society has warned about using compromise agreements) Positive Recruitment from April 2011 Two-tier workforce scrapped (morale, protecting the community, the councils continuing strategies?) Procurement / relevant clauses relating to TUPE Risks Pensions, current, funding (historic/ongoing/exit), 85 year rule, quantifying, equal pay (unequal to point of transfer), job evaluation, quantifying and addressing risks, data and unidentified employees, effect of TUPE on collective and individual rights, IR, lack of certainty at end of contract) Implications and adequate/thorough due diligence, project planning (ie. Stakeholders/work streams /communication arrangements

TUPE
6. Project Planning Delivers something - an end product or products Has a defined end date (start with Managing Change Policy?) Is planned and controlled Communications, when, who, etc. Has a defined Management Structure who owns what process? Overall Project manager? Has a Business Case Involves Risks / Equality Impact Assessment, future? - Process, start with checklist, tasks to be done (start with
managing change policy, create project plan

Implications requirements analysis, (ie. Stakeholders/work streams /communication arrangements)

TUPE
Initial Checklist Is the business or part of it transferring to another firm? Transferor to notify the transferee of all employee liability information Consultation with staff who may be affected in relation to all important measures Clarification of which employees intend to transfer and those which object Correspondence to reflect compliance with procedures and steps regarding transferring employees and those who object

TUPE
Tasks to be done Transfer situation identified, including staff in scope of transfer Implications considered Considers impact of TUPE out on Croydon County Council and service Liaison with the receiving organisation. Contact with receiving organisation, transfer of initial information Consider any measures envisaged by the receiving organisation post transfer Incorporate into consultation document. Receive information from receiving organisation on the measures post transfer, consider and include in consultation document. Consider measures and advice on impact of these on the staff post transfer. Draft consultation document, agree methods of selection/assimilation, HR processes, agree timescales Manager to finalise consultation document, complete Equality Impact Assessment Advise on timescales and appropriate HR processes Finalise Consultation document. Send final draft to HR advisor for comment/addition of HR processes. Arrange consultation meeting with staff. Identify dates and venue for meeting with staff. Check diary for availability if necessary to attend consultation meeting. Issue final consultation document and revised job descriptions to Union reps/staff side Send consultation document to relevant trade union representatives. Issue Consultation document to staff. Email/post consultation document to staff Hold Consultation meeting with affected staff Lead consultation meeting, answer questions raised and take away questions. Support manager at meeting to answer HR queries raised by staff 28 day consultation period (90 days if high number of staff being consulted) Collate responses from staff. Be available to respond to HR queries. Consider comments from staff following consultation period. Consider all responses from staff and draft responses. Meet with manager to discuss employee responses and the response from management Final communication with staff/trade unions. Reply to staff comments and amend consultation document if appropriate. Advise manager on changes to consultation document. Transfer of staffing information to receiving organisation Complete TUPE List Personal Information spreadsheet with information required under TUPE regulations Leaver information processing. Notify relevant HR/payroll staff/service of staff transferring to remove from payroll Arrange for files to be transferred to new employer

TUPE
Due Diligence Clear understanding of service to be transferred and implications/consequences eg. Eg. Numbers, potential redundancies? NHS, third/voluntary sector Staff database/other records review Leavers, Starters Pay and benefits, Pension? Liabilities Disciplinaries, Grievances, tribunals pending? Retirees, Secondees, LT sick, maternity, etc. Various strategies and the wider picture - JSNA Equality Impact Assessment / job evaluation Job evaluations Letters to be used How transfers been done previously/lessons learned Learning from others

TUPE
Conclusion and Implications

Clear understanding of process by all / agreed Clear and robust project planning Clear communications with parties Evaluation throughout the project nothing fancy Evaluation post-transfer Attend to culture, people staying/morale, wellbeing throughout