TUPE Flashcards
(34 cards)
When can TUPE apply?
- A company is sold
- Activities are outsourced
- Activities are brought in-house
- Activities are transferred
- A contract for services is moved from one provider to another
What does TUPE refer to?
Transfer of Undertakings (protection of employment) regulations
What are the 2 situations that TUPE may apply?
- Business Transfers
2. Service provision changes
What does Business Transfer refer to?
This is when a part of the business moves to a new owner or merges with another business to make a brand new employer. TUPE will not apply if there are just shares, limited assets or equipment transferring to a different owner.
What does service provision changes refer to?
- A contractor takes over activities from a client (outsourcing0
- A new contractor takes over activities from another contractor (re-tendering)
- A client takes over activities from a contractor (insourcing)
TUPE will only apply if there is a supply of service.
What must exist immediately before the transfer?
- The employees need to be organised into a group ready for transfer
- Employees should be assigned to the group who will transfer
- The client should remain the same
- The work shouldn’t become overly divided
- The work should be fundamentally the same after the transfer
What rights and obligations will transfer with employees when they TUPE?
- Contracts of employment/T&Cs (e.g. pay, commission, bonus, holidays, job title, sick pay). This also includes any accrued entitlements
- Continuity e.g. continuous service date
- Contractual provisions e.g. job, workplace, flexibility, restrictive covenants, restrictions outside of work.
What are the 4 stages for the outgoing employees?
Stage 1 - Before Committing
- Consider whether to inform reps/employees of a potential sale/expiry
- Consider whether to bid or rebid for a contract or service (in service provision changes)
Stage 2 - Prepare for transfer
- Inform/consult about the transfer and any measures
- Identify who will transfer
- Provide ELI(Employee Liability Information) to the incoming employer at least 28 days before the transfer
Stage 3 - The transfer
- The outgoing employer loses staff and must inform/consult about the transfer with the remaining staff
- Should ensure that all remaining employees are managed and settled and clear about their duties.
Stage 4 - After the transfer
- The outgoing employee must inform/consult about potential redundancies (if any)
- Should inform/consult in general as good practice to preserve good morale.
- Should address concerns to avoid drops in performance and quality of work.
What are the 4 stages for the incoming employer?
Stage 1 - Before Committing
- Incoming employer should consider information trade unions and employee reps/employees of potential bid/purchase.
- Weigh up pros and cons of committing to transfer/service provision.
Begin to construct a TUPE process plan.
Stage 2 - Prepare for transfer
- The incoming employer must inform/consult about the transfer and any measures.
- Identify who will transfer
- Request the employer liability information to find out terms and conditions of the transferring staff and provide accurate budgetary planning.
Provide the outgoing employer with information about the transfer and actions that will be taken to allow them to consult with the affected employees.
-Tell the affected staff and reps about the transfer so its understood why the transfer is taking place.
- Consider asking the outgoing employer for permission to meet new employees before the transfer.
- Draw up plans to integrate new staff, explain where the new staff will be based or how the work will be carried out.
- Plan an introduction process to held new employees.
Stage 3 - The transfer
- The incoming employer gains the transferring staff and must inform/consult about the transfer
- Should ensure that all employees/teams are settled and clear about their duties.
Stage 4 - After the transfer
- The incoming employer must inform/consult about potential redundancies (if any)
- Should inform/consult in general and ensure reasonable allowances are made whilst employees adjust and integrate
- Should review effectiveness of procedures.
What should an employee consider before TUPE?
- Does TUPE apply to this transfer?
- Doe the benefits of the transfer outweigh the risks?
- Is there sufficient work for 2 sets of staff?
- Will there be a need for redundancies?
- What will the employment liability under the transfer be?
Is there already an appropriate channel for information and consultation, or does one need to be considered?
When preparing for the transfer, what actions should be taken by both employees?
- Identify who will manage the transfer. Employers will need someone to make, follow and update plans as the transfer progresses
- Engage each other about the transfer, have clear channels of communication
- Engage with trade union officials and elected reps
- arrange for the election if none are already in place. Offer training for the role, and provide facilities to enable them to carry out the role.
- Use existing communication channels to provide information directly to employees.
- Continue to communicate with reps about the transfer on a 1:1 basis.
What is employee liability information (ELI)?
This is information that is requested 28 days before the transfer. The information will be:
- Age and identity of the employee
- The written particulars required to be given to the employee under s1 of the Employment Rights Act 1996 (i.e. Contract)
- Any live or active disciplinary or grievances in the past 2 years
- Any outstanding claims the transferring employees have against the outgoing employer.
- Any collective agreements which are in force
What could the consequences be or not submitting ELI within the 28 day time limit.
The incoming employer could apply to the employment tribunal for compensation which can be a minimum of £500for each employee.
What is due diligence?
Extra information an employer might need for a TUPE transfer. Due diligence additional information is voluntary and is only effective where there is a commercial contract between the outgoing and incoming employers. This is because the information delivered as part of a due diligence process forms the basis of warranties and indemnities in the commercial agreement concerning the TUPE transfer.
What might you need due diligence for in a business transfer?
- Assess the risk
- Confirm the viability of the transfer
- Identify employment costs and inherited liabilities
With Business Transfers, the incoming employer frequently seek indemnities and warranties from the client or outgoing employer to ensure that the information supplied is correct.
What might you need due diligence for in a service provision transfer?
- Assess risk
- Determine the level at which to make a bid
- Identify employment costs and inherited liabilities
- Decide if the service can be provided with the budget available.
Warranties and indemnities are less common in service provision transfers because there has to be a contract in existence between the parties in order for these to be effective.
What is it meant by TUPE measures?
These refer to the plans to change employment arrangement by the incoming employers. These measures must be consulted with the impacted employees. The measure can include;
- Redundancies
- Workplace relocation
- Changes to staff pay dates
- Different working patterns
- Different pension arrangements
Measures are often interpreted widely and include non-contractual and organisational matters. If there are no measures, employers should inform employees and provide information about the transfer only, although this is likely to be infrequent.
Employees who will be TUPE’d must be informed in writing. What things must this include?
- The fact the transfer stacking plan, approximately when and why
- Any social, legal or economic implications for the affected employees for example a change in location or risk of redundancy
- Any measures that employers expect to take in respect to their own employees.
- The number of agency workers employed, the departments they work in and the type of work they are doing (if agency workers are used)
- The outgoing employer must provide information about any measures which the incoming employer is considering taking in respect of affected employees.
Who are the employee reps?
Either:
- Recognised trade union reps
- Formally elected employee reps
- Reps specifically elected for TUPE consultation.
What is consultation for?
- Both employers should consult.
- Employers must consider views before making final decisions
- Don’t need t accept the suggestions, but should provide a business reason as to why they are not.
How is it insured that a meaningful consultation takes place?
- Allow the rep access to affected workforce
- Provide training, facilities and time for consultations
- Seriously consider what the reps say.
What should the incoming employer do about pensions?
The incoming employer should auto-enrol the employees into their own scheme. Occupational pensions don’t transfer under TUPE, however, if transferring employee who were members of an occupational pension scheme, the incoming employer must offer them a pension which is;
- Final salary or career average
- A scheme that provides the came benefits
- A scheme that matches the outgoing employers contributions.
What considerations are there for TUPE and dismissal
- If an employee is dismissed for the sole purpose of TUPE then that is automatically unfair.
- If an employee is dismissed but not solely for TUPE , then that could be unfair if the proper dismissal and redundancy processes are not followed.
- The employee could claim constructive dismissal if T&Cs have substantially changes.
What employment rights and liabilities transfer over in TUPE?
- Contracts of employment, including all terms and conditions of employment such as pay, commission and bonus entitlements, holidays, job title and function, and sick pay provisions. Terms and conditions also include any implied terms such as a lorry driver needing a valid driving licence to operate.
- The employers’ contractual provisions such as job or workplace flexibility or mobility, restrictive covenants, or restrictions on outside work where this applies
- Continuity of service
- Accrued entitlements such as where a bonus or holiday entitlement has built up over a period of time, but has yet to be taken or paid
- Liability for the outgoing employers’ acts and omissions in respect of the transferring employees are passed across under the TUPE regulations to the incoming employer.
- Restrictive covenants: providing that the covenant is still relevant and enforceable as a result of the transfer, they will transfer.
- Pensions and early retirement: pensions have special rules attached to them. Existing early retirement provisions may transfer over and should be handled by the incoming employer in a manner consistent with previous practice. The law is complicated in this area and employers should seek specialist pensions advice.
