Given the number of housing transfers and moves toward group structures and mergers, it is no surprise TUPE continues to be a major organisational change issue. Below, I have set out some of the most relevant issues and their implications.
When and where to apply TUPE
Each situation must be individually assessed to determine whether TUPE applies. Some examples of where it does apply include:
- The transfer of a business or part of a business from one owner to another
- The transfer of a recognisable economic entity from public to private sector
- Outsourcing and insourcing, including competitive tendering situations
- Transfers from one contractor to another
- Transfers from one organisation to another within the same group.
Individuals are eligible for TUPE if:
- They are wholly employed within the undertaking that is transferring
- They are substantially employed within the undertaking that is being transferred (normally at least 50% allocation of time relating to the undertaking).
Normally in public-sector transfers, the transferor and transferee employers prepare an employment protocol with the trade union to determine who TUPE will apply to and how the transfer will be managed.
Basic principles
When an undertaking is transferred, the employment contracts of all staff working there are automatically transferred to, and binding upon, the new employer. Consequently, the pay and terms and conditions of transferred staff cannot be changed as a result of the transfer. Similarly, an employee cannot normally be dismissed as a result of a transfer.
Pension entitlement protection
At present, TUPE excludes occupational pension arrangements. However, it should be noted that the regulations set out in Statement of Practice: Staff Transfers in the Public Sector require a broadly comparable pension scheme to be offered.
It is unlikely the transferor’s terms and conditions will fit the transferee’s requirements
Consultation obligations
Both the transferor and transferee employer will be obliged to consult with appropriate representatives. Initially, the onus will be on the transferor employer to provide information on the reasons for transfer: when it is to take place; the legal, economic and social implications for affected employees; and consultation on measures the new employer envisages taking.
The consultation must include all employees, not just those affected by the TUPE transfer, and it must take place well before the transfer. It is important to note that the transferor employer must provide for the election of staff representatives if there is no recognised trade union.
The transferee should demonstrate it can provide a clear, well-structured consultation process for staff and unions that keeps them informed about key events, and how these will affect them. The transferor and transferee should not be surprised if employees are negative about the transfer if the consultation process is limited.
Failure to consult with staff and unions in line with TUPE requirements could lead to industrial action. The transferee could be forced to pay 13 weeks' salary to every TUPE transfer employee if successfully challenged at an employment tribunal.
Post-transfer terms and conditions
It is unlikely the transferor's terms and conditions will fit the transferee employer's requirements in the long term. Terms and conditions are only protected at the point of transfer. Good practice suggests that they be protected for a while afterwards, but there is no legal requirement to maintain them for a designated period.
Post-transfer, it makes sense for the new employer to flag up for discussion, and later for formal negotiation, areas of terms and conditions it may wish to change to enable the organisation to meet its aims and objectives. The key to doing this successfully will be to take change at a measured pace, involving staff wherever possible in drawing up the agenda for change.
Source
Housing Today
Postscript
Anne Elliott is executive director of human resources consultant Hacas Chapman Hendy
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