Today I am going to tell you a story. Listen and pay attention, children, because there will be a test at the end.
Once upon a time a group of people in Europe thought it wasn’t fair that staff got fired when a business was sold. They also thought staff ought to be told in advance what was happening and what it would mean for them.
This resulted in the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE). This was a GOOD THING because lots of people didn’t get sacked. This was a BAD THING because the new boss couldn’t just cut everybody’s pay.
It can be hard to tell a GOOD THING from a BAD THING, so you are going to have to pay attention.
It turned out that the Dutch have ways of doing business, like renting a business, that don’t really exist in the UK. The Germans had their own way of doing things, and so it went on.
Workers complained to the judges, saying they should keep their jobs when the business hadn’t been sold but their employer had changed. The judges said that even one part time cleaner could keep their job when their employer changed if they were an ‘organised grouping’.
Even the Germans, who are very good at being organised, were surprised. Everyone had to scratch their head about TUPE. This was a GOOD THING because it was fairer that all these business transfers were covered in the same way. This was a BAD THING because it meant it was hard for the boss to come up with a way of getting out of it all.
Bosses in the UK wanted certainty and ‘a level playing field’, although nobody had any as they had already been sold off years ago. The Government made new TUPE Regulations in 2006 which made it clear that the judges had been right.
All sorts of service industries from facilities management to PR were covered by the ‘service provision changes’ (SPC). This was a GOOD THING because people could stay in their old jobs without being sacked or having pay cuts. This was a BAD THING because the new boss couldn’t cut everybody’s pay.
A new Government arrived. They said it would be a GOOD THING for the bosses to be able to fire people more easily or cut their pay. Sacking people would reduce unemployment, and cutting their pay would encourage them to spend more money in the shops. Reducing unemployment and improving the economy are a GOOD THING.
The Government is asking for comments on making TUPE apply to some transfers and not others. This might be a GOOD THING because some bosses would make more money and might be a BAD THING because it would increase uncertainty.
Some service providers will find they are left with liabilities when their contracts end, since the ending of ‘gold plating’ (which was a BAD THING) means they will have to pay off workers they otherwise would have passed on to the new contractors.
This is a ……… THING – well work it out for yourself. Another round of TUPE changes is always a GOOD THING for employment lawyers (who wear wigs and not tupes at all).
Now here comes the test I promised. You need to make up your own mind and respond to the consultation documents by 11 April 2013. This is really important for anyone who is contracting out services, taking them back in house, providing services under a contract on an ongoing basis.
Click here to join the conversation on TUPE and the service sector and join our free teleseminar.
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