Tag Archives: TUPE 2006

Measure for Measure . . . TUPE and redundancy

We must not make a scarecrow of the law,
Setting it up to fear the birds of prey,
And let it keep one shape, till custom make it
Their perch and not their terror.
(Wm Shakespeare, Measure for Measure, Act II, Sc I)

The TUPE regulations are too dynamic for the comfort of those advising their employer (or their clients), with caselaw often changing between taking on a service contract and losing it again.   This is very anxiety-provoking for most HR practitioners, since ‘getting it wrong’ can mean their employer is taking on liabilities they otherwise need not, or, worse still, on the losing end of several employment tribunal claims.

This is particularly so when a TUPE transfer involves potential headcount changes and redundancies.

The legislation on redundancy and TUPE intertwine and interleave, and it can be tricky working out who needs to be consulted about what, in what format, over what period of time, and by whom.   So let’s have a go.

Consultation TUPE consultation Redundancy consultation
Statutory obligation to inform or consult with appropriate representatives Always, no threshold of employee numbers 20 plus redundancies at one establishment within 90 days
Appropriate representatives Reps from recognised trade union; or employee reps appointed or elected by affected employees for another purpose; or specially elected/appointed employee reps Reps from recognised trade union; or employee reps appointed or elected by affected employees for another purpose; or specially elected/appointed employee reps
Statutory Timescales No defined statutory minimum period of consultation Information about transfer given to reps long enough before the transfer to enable consultation (with a view to seeking agreement) to take place on the ‘measures’ to be taken by either employer Less than 20 redundancies  – no specified timescale20+ redundancies at least 30 days before first dismissal takes effect100 +plus redundancies; 90 days Consultation ‘in good time’
Description of employees covered by the consultation Anyone who may be affected by the transfer (not just those transferring) Anyone at risk, and those who  may be affected by measures taken in connection with those dismissals
Duty to inform Inform, in writing: fact of transfer, date, reasons, implications for affected employees, measures envisaged in relation to affected employees Inform, in writing: reasons; numbers and descriptions of employees proposed to be redundant, and total number of employees of each description at the establishment; proposed method of selection, and proposed method and timing of dismissals; proposed redundancy payments; number of agency workers working for employer, where in the business, and doing what
Duty to consult With a view to seeking agreement to intended measures, considering representations, and stating reasons if proposals rejected With a view to reaching agreement, about ways of avoiding the dismissals, reducing the numbers, and mitigating the consequences
On whom duty is placed Transferor to consult; transferee to provide ‘measures’ statement Employer
Penalties Up to 13 weeks’ pay (statutory maximum not applying) Protective award up to 90 days’ pay

The Government made a call for evidence on ways to improve TUPE, which closed on 31 January 2012.  No draft legislation has been published.

TUPE caselaw is developing all the time.  Where redundancies are to take place in a TUPE scenario, then both sets of regulations and caselaw have to be considered and applied.

The redundancy consultation process and timing requirements are currently the subject of consultation which ends on 19 September  (http://www.bis.gov.uk/assets/biscore/employment-matters/docs/c/12-808-collective-redundancies-consultation.pdf).  It is proposed to shorten the consultation period for 100+ redundancy exercises.

Many of the toughest issues around TUPE, economic technical or organisational dismissals (ETOs) and collective redundancies (or finding alternatives to them) are most effectively resolved by having a good consultation process.

Having clear organisational and commercial objectives does not mean that the way of achieving these is set in stone, and there is a real difference between the aftermath of a well constructed and well consulted process, and the fall-out from a  rushed compliance exercise.

As long as the law applies to what employers can do to employees at work, there is always going to be an area of ‘grey’.  It is simply not possible to arrive at a system that is both predictable and clear and also flexible and fair (https://irenicon.wordpress.com/2011/06/10/red-tape-and-fairness/) .

If we accept this as a fact and work within it, then it becomes obvious that the way to deal with the ‘grey’ areas is to have a conversation – in other words, to consult.   If you do this in a TUPE context you will quickly discover that some people:

  • don’t want to TUPE through and would be happy to be made redundant (whether or not a genuine redundancy situation exists)
  • are not willing or able to change location/work base if that is what is needed
  • are not willing or able to learn new working methods and techniques

and by way of comparison some people

  • are keen to expand their skill base
  • are keen to change location
  • have unused skills in their current role that would be useful in a new structure
  • will do just about anything to keep a particular job

I have often sat down with HR teams and Directors who have said “X will never do this, Y will never agree to that”.  Sometimes they are right, but equally they can be wrong.  Flexibility can be as much influenced by circumstances as by personality.  We don’t know what people are keen to do until we ask them, and lay out the options for them.  Good consultation can have useful individual results, as well as improving the atmosphere at a challenging time.

For regular free teleseminars on TUPE, redundancy and more check our events page.  We are running a new seminar on how to handle the two processes simultaneously.

Click here for more about this

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

3 Comments

Filed under employment law, redundancy, TUPE

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

Leave a comment

Filed under employment law, TUPE