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TUPE or not TUPE

. . . or The slings and arrows of outrageous fortune

In Eddie Stobart v Moreman the Employment Appeal Tribunal (EAT) decided that, for there to be a TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) “service provision change” the group of employees had to be deliberately organised to service the particular  client. The EAT decided that, in the Stobart case, the fact all the employees happened to work on a shift that provided services to that client was not enough. The TUPE regulations define a service provision change transfer as applying when there is an:

“organised grouping of employees”, which has
“as its principal purpose the carrying out of the activities … on behalf of the client.”

The EAT decided where a combination of circumstances (largely shift patterns and working practices) meant that a group of employees were as a matter of simple fact working mostly on tasks which benefitted a particular client did not meet this test.

The EAT pointed out that TUPE does not say merely that employees should in their day-to-day work in fact principally carry out activities for the client in question – TUPE requires that the activities are the principal purpose of the organised grouping of employees to which the individual belongs.

Whether an individual employee works 50% or more for a particular client is not any part of the test under TUPE 2006. It was part of the test under the 1981 version of TUPE, but that wording did not continue into the current 2006 version of the Regulations.

There are still a number of grey areas left in TUPE – as it seems there have always been. For example – could an “organised grouping” have more than one “principal purpose”? It might be that the “time proportion” test is relevant here – applying to the whole grouping. Or perhaps “principal purpose” is to be judged by the priority of the work?

The world of work streams and dotted line reports has yet to be fully explored in the context of TUPE. Does work streaming mean no group has a principal purpose? Or should we be tempted to say that work streaming means no-one is part of an organised grouping of employees?

What difference does it make in real terms if a transfer is, or is not, covered by TUPE?

A)     If there is no TUPE transfer, then any workers who were working on the project/task/service will not go through to the new contractor as the new contractor’s employees.

  • It is the current employer’s job to find them alternative work, reassign them, or if necessary make them redundant.
  • Any liability for back pay or benefits remains with the current employer.
  • All unfair dismissal, discrimination, equal pay risks remain with current employer.
  • All contractual liabilities remain with current employer.

B)     If there is a TUPE transfer, then the same workers will (as a matter of law) become the new contractor’s employees (with their full service and contractual entitlements – save for pensions – intact).

  • It is the new employer’s job to find alternative work, reassign or if necessary make them redundant.
  • All the other liabilities under A) transfer to the new employer

Where an argument breaks out between the employers about whether TUPE applies, individual employees may feel lost in the no-man’s land of litigation between two employers who are having some kind of custody battle where no-one wants the kids.
HR on both sides can do a lot to make sure that the original tender documents (where they exist), pitches for business,  take on board the statutory TUPE obligations. HR can go beyond that, if allowed into the negotiating process early enough, and can help shape a contract for services that incorporates thinking about employees and service levels from the start.

Don’t forget the TUPE regulations are a set of minimums not a set of maximums.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.
Tel: 08452 303050 Fax: 08452 303060
You can follow Annabel on Twitter
www.irenicon.co.uk
www.koffeeklatch.co.uk
www.balancingthebump.com

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Filed under employment law, TUPE

Getting to grips with ‘the help’

The natural growth pattern for a start up business is to have one or two unpaid owners who start it, then they get paid (a bit), and then other people start helping in the business.

Family members help out from time to time, some casual workers, some freelancers, even interns and apprentices. Some businesses never get out of the ‘freelance’ mode and take on employed staff.  Some employ people and carry on with a mix.  Very few end up with employed staff only as a business model.

Entrepreneurs cite fear of employment law as one of their key concerns – yet few seem to realise some simple facts:

  1. Calling someone freelance or self employed does not mean they are (we might have thought of that one ourselves if it really worked!)
  2. Self employment does not mean no tax has to be deducted under IR35
  3. Employment tribunals can decide your people are really employed (and trigger claims from the revenue for back tax)
  4. Genuine freelance workers have a full range of discrimination and other employment rights (the main thing they don’t have is unfair dismissal rights)

It can be tempting to take on people as freelance workers and not have to worry about PAYE and tax at the end of the month, but it can mean that you are storing up trouble for the future.   Sometimes it can be better to pay the tax as you go and know you don’t owe the revenue anything later.

New employees have two years before they qualify for unfair dismissal rights, and for some people it can be less worry to take on staff if the work needs to be done regularly or on an ongoing basis.  You really should talk to your accountants about this and tell them honestly how you are working.

Even if freelance workers are the right model for you, you need a proper agreement that not only sets out the relationship so HMRC can see it is not an employment relationship but also deals with:

  1. Who owns copyright – the default is that they will if they are not an employee
  2. Confidentiality and data protection
  3. What happens about confidential information when the contract ends
  4. How they will deal with sending suitably qualified substitutes when they are not available……because if they can’t that may be one indicator that they are not self employed
  5. What equipment they are going to provide
    And there’s more……

There are lots of things the law gives you automatically if you are the boss of an employee that you are going to have to contract for if you are using freelance workers. We come across people who don’t have copyright in their own web sites, who don’t have access to social media followers they paid someone to find and worse.

Ultimately you are in business to get particular things done at a profit. Setting out proper arrangements to manage freelance workers (and staff) are part of the building blocks of that success. Join us for a free teleseminar to discuss managing freelance workers – register via this link.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.

Tel: 08452 303050 Fax: 08452 303060
You can follow Annabel on Twitter
www.irenicon.co.uk
www.koffeeklatch.co.uk
www.balancingthebump.com

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Filed under employment law, Freelance Workers

TUPE or not TUPE

. . . or The pangs of despised Love, the Law’s delay

For the last year or so I have been talking about TUPE on a regular basis, both in teleseminars and in person. So far, no employee engagement, talent management or onboarding specialist has turned up.

Is TUPE seen as a completely unrelated discipline or as a simple compliance exercise? This may be why so many of the questions I deal with are around “What do we have to do?” instead of “This is what we need to achieve…”

Consultation

The consultation elements of TUPE are key to success or failure. There are two employers – the current employer (transferor) and the future employer (transferee). The law treats the two for most purposes as if they are one employer, but not at this moment. The transferor has to give elected employee reps information about the transfer, and to state what measures it is proposing to take (sometimes known as a “measures statement”), and the ‘measures’ it expects the transferee to take. The transferor is required to consult the employee reps about its ‘measures’ – with a view to seeking employee agreement to them.

Misconceptions

Often that the transferor fails to organise TUPE reps, believing that there is a ’20 person’ threshold to this requirement. That threshold is a redundancy one – it does not apply to TUPE. There is no statutory timetable for TUPE consultation unless more than 20 employees are at risk of redundancy and the redundancy thresholds are triggered. It can be tricky to do a good consultation exercise in no time at all whatever the law says. Many HR departments think they have to consult only on proposed changes to contracts (most of which would be difficult under TUPE anyway) whereas the ‘measures statement’ should cover changes to the contractual terms (such as pension schemes so far as TUPE permits) but also to non contractual arrangements (e.g. discretionary sick pay and bonus schemes).

Measures

The transferee is required by TUPE to provide their ‘measures statement’ to the transferor in good time so that the transferor can pass it on to the employee reps. Sometimes the transferor will even allow the transferee access to staff to begin their own consultation process. But there is no requirement for the transferor to allow personal contact or meetings with staff prior to the transfer date. If the two parties are rival contractors (rather than a situation of client outsourcing), there can be little practical motivation for the outgoing employer to invest a lot of time in the consultation process for outgoing employees. Some employers simply make an announcement and say “your new employers will tell you everything when you turn up to work for them”.

Compliance is not much of a goal

The real problem for the transferee is not legal compliance, which can be fairly easily achieved in most circumstances. Difficulties arise because the incoming employees are bringing with them the whole psychological contract they had with their existing employer, along with their own personal set of misunderstandings about their contractual and legal entitlements, their expectations of how they should be treated, and their memories of how they were. They will be adding to that psychological contract how they are treated during this process – by the transferee and by their soon to be ex-employer, the transferor It’s a potent mix that can result in three way tribunal claims, disaffected employees and a lot of wasted time and effort.

If the transferee is “allowed in” prior to the transfer, the consultation process can be a wonderful way to start to understand these issues, and to arrange to bring those individuals into their new employment relationship with a better basis for working together. At any point consultation can also be the time when a mini ‘skills audit’ is done to see what training is needed to properly induct the new team members. It can be a ‘getting to know you’ process and a ‘checking we understand the data’ process. Alternatively, you can make this process into: ‘This is where we tell you what we want you to know, and you just listen and obey’.

The spirit of consultation is often overlooked in the rush to compliance, and many highly motivated and resourceful individuals start working for their new employer confused, angry and resentful. It is an extremely hard thing for some people to be sent to work for someone they have never met, never applied to work for or indeed wanted to work for. We need to recognise that, and build our processes accordingly. This is the first opportunity you have to show them how your ’employer brand’ really works – are you going to fail?

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.

Tel: 08452 303050 Fax: 08452 303060
You can follow Annabel on Twitter
www.irenicon.co.uk
www.koffeeklatch.co.uk
www.balancingthebump.com

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Filed under employment law, TUPE

The past is no guide to future performance

Mary is an established member of her team, with good social and professional relationships with her co-workers.  Her boss has managed the unit with a fair degree of success (neither perfect nor imperfect), and everyone knows where the boundaries are and what is expected of them.

Boss moves on with fond farewells.  New boss Sarah arrives, with her own way of doing things.  Mary feels put out by the changes, and wants to carry on working as before.    She complains to colleagues about the changes, and starts to campaign with them that they should not implement them.     She tells her colleagues that many of the changes are pointless and will not work, and she will not participate in them.   When a colleague tells her “Sarah’s the boss, why not just do what she says?”  Mary turns on her heel and laughs.  Although Mary is a valued member of the team, her campaigning is making life very difficult for her new boss.  The team is dividing into ‘pro Sarah’ and ‘pro Mary’ camps.  Mary talks about “I was here first”, and “it worked well before”

Sarah was a very popular boss with her old team, and she is well liked by some of the new team.  She is very approachable, regularly buys drinks for everyone in the pub, and is willing to bend the rules to help her team members, letting them go home early if needed.    Standards are slipping a bit – the old boss was a stickler for detail, whereas Sarah is more of an overview person.   No-one from outside would notice the difference, but old team members shrug their shoulders and pick up the slack.  Sarah doesn’t seem to know.

Why is it we are so bad at change?

Planning for change, or accepting changes that are not planned, is something few us are willing or able to do.

Sarah went into a new team without a clear plan for how she would evaluate whether change was needed, communicate that change, implement it, and monitor it.  She just did what worked well in her old team.

Mary did not expect any change except for the name of her boss.   When faced with change she resisted it all.

If the team is lucky there will be a natural mediator on the team – one of those wonderful people who are the glue that really make the workplace work.    We need someone to say to Mary: “The boss is the boss.  Unless it is dangerous, or illegal, it is her job to say what we do.  If you think it is inefficient or there are better ways, have a quiet word with her and let her know, otherwise you need to do it.”   And we need someone to feedback to Sarah that she is changing how things are done (she may not be aware of it), and that she needs a process for bringing people along with her and for dealing with Mary.

How many HR specialists does it take to change a light bulb?

That depends on whether you want to keep the light bulb.

Sarah could have a useful learning experience that will enhance her skills and make her next promotion easier, or she could struggle with Mary and slowly begin to fail – she could get stuck here.  Mary may even accuse her of bullying, as Sarah repeats the same instructions over and over again and Mary gets progressively more isolated from her team.

Mary can learn how to handle change and difficult situations.  Or she can campaign against her boss, and sooner or later she will find herself with no promotion prospects, and quite possibly no job.   Mary can feel bitter that her lovely job was ‘stolen’ from her by this awful manager – an attitude that may affect her life at home as well as at work.

It’s not a big deal to help new managers put together a system of ‘raising the bar’ so that they can change the way a team works.   It’s not such a big deal to help Mary (at an early stage) to work out the difference between changes she needs to give feedback on, and those that are not really something to worry about.

So where were HR when all this was happening?   They were busy with other important things.  They had not routinely touched base to see how this team functioned.  Of course, when Mary claimed she was being bullied, and Sarah claimed she was totally unsupported by management, HR were all over the investigations like a rash.  The hours of note taking and decision making meant they were then too busy to touch base with any of their other teams.

Is there a happy ending to this tale?  Not really:  Mary spent years resenting Sarah, and then transferred to another team.  She is not regarded as a popular or successful team member, because she has kept up the habit of complaining about the boss and resisting all change.  Sarah never got another promotion in the organisation.  She stayed in post for a few years and then got a job outside.  She started with her new team in the same way, and is now convinced that people are just awkward and you have to push them harder to get what you want.   HR are still doing a lot of paperwork and taking a lot of notes at meetings with unhappy people.  No change there then.

Employment law is where the rubber meets the road – where people problems become legal problems and the law intervenes.  It can’t make Sarah a better manager, or Mary a more realistic employee.  It can’t make an organisation introduce the small interventions that prevent this type of problem  What employment law does do is penalise and sanction those organisations who get to tribunal after they haven’t done their part and a legal issue has arisen.

Of course if there are any ‘equality’ or ‘discrimination’ issues here, this turns into a nightmare scenario.  Sarah picked on me because I am white, transsexual…..  Even in unfair dismissal terms, the process of performance management can be a very long haul if it is started late and from an already-broken situation.

If there were no employment law and the organisation was free to act in any way, would that really solve this problem?  To what extent is the very existence of employment law the problem?

To my thinking, employment law, if incorrectly applied, can be a complicating factor, but it’s never the problem itself.   Giving long serving employees three warnings and an opportunity to change their behaviour doesn’t seem unreasonable.   In this situation would you really want to walk in and just sack Sarah or Mary (or both)?

There is another complicating factor:  in many organisations, both performance management programmes and warnings are often seen as the death knell for individuals – simply the start of an inevitable process of ‘managing someone out of the business’.  We need to do something to change that – but that’s not an employment law issue, it’s a cultural one.

It’s not employment law that gives us difficult problems.  The Sarah/Mary problem is one we get every day, and it has a relatively easy prevention plan, early on.  But allow it to fester to the point when employment law becomes an issue, and then you are in for a more painful remedy.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.
Tel: 08452 303050 Fax: 08452 303060
Website:  www.irenicon.co.uk
You can follow Annabel on Twitter

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Filed under bullying at work, discrimination, employment law, performance management

A word to the wise

Sometimes the obvious decision isn’t the right decision for the organisation.  It is easy to get focussed on narrow issues, or rush towards a conclusion when a decision seems obvious.

We are all busy and no-one wants to make a big thing of a little thing.   We all need an intelligent friend to nudge us and say “This doesn’t make sense – check it out” or “Are you so sure about that?”

A retailer had half a dozen staff in each of three shops.  He was a very hands-on boss and knew all his staff quite well and saw them regularly.  He regularly opened and closed each of the shops and often worked alongside his staff during the day.

One of his staff had worked for him for a couple of years, and had been quite reliable and hard working.  He started getting into work late and seemed to have lost all interest in the job or getting in on time.

One day, the owner was standing by the door of the shop when the guy turned up 15 minutes late for his shift.   “What time do you call this?” said the boss.  He was met with a mouthful of abuse in front of all the other staff at the shop.

It is very hard for a boss to tolerate being publicly abused in front of their team.  The staff handbook specifically says that swearing and aggressive language is gross misconduct.

Once we got the boss calmed down, we asked him to have a very quiet and private word with the chap to find out what was really going on.  (There was no one else in a managerial role in the business).   With a bit of help from us he found out that:

  • The chap’s wife had left him
  • He had three kids to get to different schools by bus (he had no car)
  • He had not wanted to make it public since he hoped she would return
  • He was really struggling to cope

Outcome

This particular boss did something many would find difficult.  He decided to give this man a final warning and allow him to continue to work in the business, despite the fact he feared he would lose face in front of his team.  He also altered his working hours so that he started after he had finished the school run, had a shorter lunch break and picked up the kids from school.

Four years later the same man took his boss on one side and said “You were so good to me that time, I really think you ought to know…..some of your staff are organising a lorry to back into the loading bay tonight and steal a major amount of stock…………”  As a result of this, they were stopped (and fired in due course).   The plan was to steal an amount of stock that would have bankrupted the business.

See our previous blog

To be continued ……

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.
Tel: 08452 303050 Fax: 08452 303060 Website :  www.irenicon.co.uk
You can follow Annabel on Twitter

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Filed under discipline and dismissal, employment law, performance management

Seeing Red

Sometimes the obvious decision isn’t the right decision for the organisation.  It is easy to get focussed on narrow issues, or rush towards a conclusion when a decision seems obvious.

We are all busy and no-one wants to make a big thing of a little decision.   We all need an intelligent friend to nudge us and say “This doesn’t make sense – check it out”  or “Are you so sure about that?”

A customer complained that a waitress deliberately tipped a jug of iced-water into his lap and stormed off.   The waitress had only been employed  for six weeks.  When asked about the incident she agreed that is what she did.  Her line manager was anxious to ‘get rid’ saying she was obviously volatile.

Seems like an open and shut case of gross misconduct – why take any time over this?  What would you do?

We asked our client to go back and have a quiet word with the waitress to find out what made her do what she did.  We discovered:

  • The customer was part of a heavy drinking group who all turned up at lunch time
  • They were making very crude sexual remarks about the girls red hair and its extent
  • She repeatedly asked them to stop, and they just laughed
  • The manager was listed as on duty, but was in fact absent from the site making a long telephone call to his girlfriend
  • This waitress was 17 years old, and left on her own in a busy restaurant  with no support

Now, we all know that two wrongs don’t make a right.  It is plain that waitresses shouldn’t throw iced water over customers.

But, the staff handbook said:

  • Customer service  – “If you have a difficult customer, do not try to deal with them yourself, but speak to your manager who will take over from there”.
  • Sexual harassment – “We do not expect you to tolerate inappropriate comments from customers.  Please let your manager know immediately if you experience any problems”.

Would any of this make a difference to your initial decision?

Outcome

The girl was given a tactfully worded warning not to assault customers, and told firmly to walk off the floor if such an incident recurred (which was never triggered because she knew what to do next time).  She went on to be a very successful Area Manager.

The manager was given a warning  for his failure to remain on site and his failure to properly support his trainee.  He was also retrained on supervision and equality.

All managers were reminded of the importance of remaining on site during service, and encouraged to properly support their trainees.

The incident was used as a case study in the organisation (with the girl’s consent) to show how sexual harassment by customers needs proper support from managers in the workplace.

And the customer was asked not to return to the premises.

To be continued ……

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy.
Tel: 08452 303050 Fax: 08452 303060 Websitewww.irenicon.co.uk
You can follow Annabel on Twitter

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Filed under discipline and dismissal, discrimination, performance management

Employment law does not prevent performance management

If I had a penny for every time a manager told me that employment law prevented them from managing their staff, I would be so rich I wouldn’t need to work.

Most of the problems we deal with on our hotline stem from a failure to properly manage performance.  Whether it is ‘bullying’ or problems in managing maternity leave, selection for redundancy, even half the discrimination problems we get – they all stem from a failure to:

  • Design jobs people can succeed in
  • Recruit people with the right skills
  • Set achievable goals within that job
  • Adequately resource for success
  • Monitor performance and feedback
  • Adjust course where needed

When we talk to employees within teams we find them saying – management won’t touch x person because they are protected by discrimination law, management don’t tackle poor performance early enough or clearly enough.

The managers say employment law stops them doing this.

Employment law is not that tricky if you know what you are doing.  Some organisations are cursed with the ‘employee from hell’ but most are not.   You don’t have to wait until you can’t stand it any more and then try to shoe horn ‘employment law’ into a last minute dash towards dismissal (with the replacement waiting in the wings).  You can integrate the basics into a simple performance management system.

If you are struggling with manage your team (or an individual)  and thinking “if employment law didn’t exist I’d…………….”  now is the perfect time to start working on that problem.

Employment law is not going to stop you managing poor performance in your business if you know what you are doing.

Annabel Kaye is Managing Director of Irenicon Ltd, a specialist employment law consultancy. Tel: 08452 303050 Fax: 08452 303060 Website : www.irenicon.co.uk. You can follow Annabel on twitter – http://twitter.com/AnnabelKaye

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Filed under employment law, performance management