Beachcroft working with NHS North West. Transforming Community Services TUPE Toolkit and TUPE Guidance

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1 Beachcroft working with NHS North West Transforming Community Services TUPE Toolkit and TUPE Guidance Summer 2010

2 Working with NHS North West, Beachcroft have developed a TUPE Toolkit and training session to be used by both commissioners and providers in the Transforming Community Services integration programme. Beachcroft are recognised as the leading healthcare practice in the country. We act for over 200 Trusts (including over 50 FTs and PCTs) as well as specialist health bodies and a number of leading private sector providers. Our lawyers and consultants are renowned to be some of the most respected individuals working in the health sector. Two of our partners are non-executive directors of Foundation and mental health trusts. We are ranked top in Chambers UK s Best of the UK listings for Health and Social Care Advice. The speakers at our sessions were: Deborah Hely Partner, Employment and Pensions Group Direct Tel: +44 (0) dhely@beachcroft.com Claire Reynolds Associate, Employment and Pensions Group Direct Tel: +44(0) creynolds@beachcroft.com Robert McGough Partner, Commercial Services Group Direct Tel: +44(0) rmcgough@beachcroft.com 2

3 Beachcroft working with NHS North West Transforming Community Services TUPE Toolkit and Training Session 1. Time Line TUPE and TCS Index of Template Letters and Documents The Purpose of TUPE What is TUPE? When is it not TUPE? When is it a TUPE transfer? Cabinet Office Statement of Practice Discussion Points - Could it be TUPE? Who Transfers? What Transfers? Discussion Points Pensions Varying Employment Contracts and Harmonisation Discussion Points varying employment contracts and harmonisation TUPE Related Dismissals TUPE Related Dismissals and Group Exercise Information and Consultation Obligations Key Stages in a Transaction Information Gathering (Due Diligence) Commercial Aspects of TCS Process Negotiation of Contract and Workforce Related Warranties and Indemnities Checklist Transforming Community Services These notes and precedent documents are a broad guide to practical issues and a general statement of the law only. They are not suitable for detailed legal advice in relation to particular situations. They are not a guide to your organisation s own policies, procedures and practices which may differ from those specified in this note. 3

4 1. Time Line TUPE and TCS PCT TRANSFEROR DATE/EVENT TRANSFEREE (Old Employer) (New Employer) Regional staff side information and consultation Local staff side information and consultation Measures - request/give Work force and Employee Liability Information Due diligence Heads of term and contract negotiation Heads of term and contract negotiation Due diligence Work force and Employee Liability Information Measures - request/give Local staff side information and consultation Regional staff side information and consultation Prepare information Supply information 31 MAR 2010 Bids in to PCTs APR MAY JUN Services allocated JUL Request information Review information and consider measures AUG Update SEP Ditto OCT Update NOV Ditto DEC Heads of terms agreed Update JAN 2011 Ditto FEB Contracts agreed Update MAR Ditto TRANSFER DATE 31 MAR TRANSFER DATE Consolidation process starts APR Integration process starts There is no legal timetable for informing and consulting under TUPE. Information must be given long enough before the transfer to enable the employer of any affected employees to consult appropriate employee representatives (recognised trade union representatives). Consultation is undertaken with a view to reaching agreement. Representations with appropriate employee representatives must be replied to and reasons given for rejection of any representations. Dates for agreeing heads of terms and contracts are approximate. The earlier this can be achieved, the better. 1

5 2. Index of Template Letters and Documents TRANSFEROR (CURRENT EMPLOYER) DOCUMENTS Template Letter 1 To: Representatives of recognised trade unions for transferor s affected employees Purpose: Sets out the information required under regulation 13 TUPE, addressing the duty to inform and consult and the right to access/facilities for representatives of recognised unions. Template Letter 2 To: Transferee Purpose: Requesting details of any measures to be taken by the transferee with regard to transferring employees. Template Letter 3 To: Representatives of recognised trade unions Purpose: Beginning process of information and (if necessary) consultation on measures with regard to affected employees. Template Letter 4 To: Transferee (new employer) Purpose: Providing Employee Liability Information (minimal additional information requested) Annex: Employee Liability Information table (with minimal additional information) Template Letter 5 To: Individual employees to be transferred Purpose: Confirming the transfer TRANSFEREE (NEW EMPLOYER) DOCUMENTS Template Letter 6 To: Representatives of any of the transferee s employees who might be affected by the transfer, including any post-transfer restructuring Purpose: Informing them of the transfer and setting out measures to be taken in connection with the transfer, in relation to any affected employees. 2

6 Template Letter 7 To: Appropriate representatives (recognised trade unions) of its own employees Purpose: Commencing consultation on measures in relation to employees affected by the transfer Template Letter 8 To: Transferee s existing employees Purpose: Informing them of the transfer (includes optional information about the potential for restructuring and consequent redundancies). Template Letter 9 To: Transferor (old employer) Purpose: Requesting Workforce and Employee Liability Information. Annex: Workforce and Employee Liability Information Table Template Letter 10 To: Transferor (old employer) Purpose: Providing details of measures 3

7 TRANSFEROR DOCUMENTS TEMPLATE LETTER 1 Letter from the TRANSFEROR to appropriate representatives (in the NHS this will be recognised TRADE UNIONS), providing the information required under regulation 13 TUPE. NOTE: The letter should be sent to sent to each union representative by being delivered to them, or sent by post to an address notified by them to the employer AND sent by post to each trade union at the address of its head or main office. You should seek advice if there are no recognised trade unions for staff or a particular group of staff, since it may be necessary to elect representatives. Dear [ ] Transforming Community Services Proposed Transfer of [COMMUNITY SERVICES] to [ANYTRUST] Transfer of Undertakings (Protection of Employment) Regulations 2006 ( TUPE ) As you know, government policy is to create modern, responsive community services of a consistently high standard. The Transforming Community Services programme aims to deliver this. The programme has three key elements: quality, enabling transformational clinical practice and transforming the commissioning of community services. To help deliver transformation of the commissioning of community services, the relationship between providers and commissioners of community services is changing, and from 1 April 2011 will be purely contractual. [Over the past few months, [NAME OF SHA] has facilitated several meetings of representatives of local trusts and recognised trade unions. There have also been additional discussions between this trust s management and staff side. The purpose of all of these meetings has been to discuss the possible transfer of community services from primary care trusts to local trust(s).] Trusts [AND LOCAL AUTHORITIES] interested in providing community services in [AREA] applied to [NHS PCT]. The PCT has carefully considered all of these applications and [NAME OF SHA] has reviewed them. [NHS PCT] has borne in mind in mind government policy that the new provider organisation must be fit for purpose and capable of enabling and empowering frontline clinical staff to innovate and free up time for patient care. Clinicians must be provided with the support and resources they need to be world class practitioners. The new provider organisation must have a robust business infrastructure that is capable of contracting with commissioners and effective business planning. It also needs to be sustainable and flexible capable of evolving to meet an increasingly challenging environment of rising patient expectations, more demanding PCT and practice-based commissioners. ** With this in mind, I am writing to you to inform you that it is proposed that [COMMUNITY SERVICES currently provided by [NHS PCT] be transferred to [ANY TRUST]. This letter is to inform you, in advance of the proposed transfer, of certain matters as required by regulation 13(2) TUPE. 1. It is currently intended that the proposed transfer will take place on 31 March The legal implications of the proposed transfer are that TUPE will apply to transfer to [ANY TRUST] the employment contracts and statutory continuity of services of all of the employees who assigned to the provision of community service within [NHS PCT]. Otherwise than as set out in this letter it is not envisaged that there will any other economic or social implications of the proposed transfer. 4

8 3. A provisional list of employees who will transfer to [ANY TRUST] will be prepared as soon as possible and sent to you for the purposes of consultation. EITHER 4. [We are informed that [ANY TRUST] intends that, after the proposed transfer date, the following measures will be taken in connection with the transferred employees: //[SET OUT MEASURES]] OR 5. [We have requested details of any measures that [ANY TRUST] intends to take after the proposed transfer and will advise you of any such details as soon as we receive them.] OR 6. [We are informed that [ANY TRUST] does not intend to take any measures in connection with any employees who may transfer.] AND EITHER 7. [[NHS PCT] does not envisage that it will take any measures in relation to the transfer: formal consultation is therefore not necessary, [but consultation in relation to the practical aspects of the transfer may help to clarify any issues that arise and minimise disruption and uncertainty for the affected staff. We will therefore contact you to discuss arrangements for consultation meetings]. OR 8. [If you wish to request a meeting with [NHS PCT] and/or [ANY TRUST] to discuss any aspect of the proposed transfer, we will give proper consideration to any such request] OR 9. [NHS PCT] intends that the following measures will be taken in relation to the transfer [SET OUT ANY PROPOSED MEASURES TO BE TAKEN WITH REGARD TO NON- TRANSFERRING BUT AFFECTED EMPLOYEES]. We will contact you shortly concerning the practical arrangements for consultation in relation to these proposed measures.] 10. [As the proposed transfer is to [ANY TRUST], transferring employees will of course retain their entitlement to be members of the NHS Pension Scheme] 11. [Note: if employees are not to retain entitlement to be members of the NHS pension scheme then take legal advice and outline out details here]. 12. We anticipate that you may require access to the transferring [and affected] employees and we suggest that appropriate arrangements are discussed at our next meeting [OR SET OUT ARRANGEMENTS]. An office at [LOCATION] has been set aside for your use and it has internet access and phone lines. If you have any questions regarding the content of this letter please contact [THE WRITER OF THIS LETTER]. Yours sincerely [ NAME] [JOB TITLE] ** Note: taken from Transforming Community Services: Enabling New Patterns of Provision (Transforming Community Services team, Department of Health) 5

9 TEMPLATE LETTER 2 Letter from TRANSFEROR to transferee, requesting details of any measures to be taken by the transferee with regard to transferring employees. Dear [ ] Transforming Community Services Proposed Transfer of [SPECIFY] Community Services to [ANYTRUST] on [31 March 2011] In connection with the proposed transfer of community services, [NHS PCT] is required to inform representatives of the transferring staff of any measures that [ANY TRUST] proposes to take in relation to the transferring employees. Please would you therefore advise as soon as possible, and in any event no later than [date] whether the [ANY TRUST] intends to take any such measures: if so, please provide details. Yours sincerely 6

10 TEMPLATE LETTER 3 Letter from TRANSFEROR to representatives of recognised trade unions, beginning the process of information and (if necessary) consultation on measures with regard to affected employees. In the case of union representatives, this information should be sent to BOTH the local representatives AND each union s head office. Dear [Union Representative] Start of consultation concerning measures envisaged in relation to the transfer of [SPECIFY] Community Services from [ANY PCT] to [ANY TRUST] I write further to my letter of [date] in which I informed you of the proposed transfer of Community Services, which are currently provided by the PCT, to [ANY TRUST]. The PCT now envisages [that it will be necessary to take some measures which will affect a number of PCT staff who will not transfer to the [ANY TRUST]. In outline, these are [DESCRIBE] again. AND/ OR [in response to our request for details of any measures that [ANY TRUST] proposes to take after the transfer, the Trust has replied by way of [the attached letter]. I would be grateful if you would send me any representations that the union might have in respect of any of these proposed measures. In respect of the measures proposed by [in respect of the measures proposed by [ANY TRUST], formal consultation with the PCT is not appropriate, but we will pass on your comments to the Trust if you wish]. AND/OR [in respect of the measures proposed by the PCT, once we have had an opportunity to consider any representations that you wish to make, we will contact you again to arrange a consultation meeting to discuss them. Yours sincerely [Name] Job Title 7

11 TEMPLATE LETTER 4 Letter from TRANSFEROR to TRANSFEREE, enclosing employee liability information. NOTE: The Transferee may well request substantially more information than is required by Regulation 11 of TUPE, in order to better understand the financial commitment it is taking on and to facilitate integration of PCT staff into its organisation. It is anticipated that pragmatic discussions will take place between TRANSFEROR and TRANSFEREE concerning sharing information about the transferring staff. The pro-forma table attached to this letter will contain only the information that the TRANSFEROR is required to give to the TRANSFEREE under Regulation 11 of TUPE. Dear [Contact at ANY TRUST] Transfer of [Community Services] from [NHS PCT] to [ANY TRUST] TUPE Employee Liability Information In connection with the above transfer, I enclose a table setting out employee liability information in respect of all of those PCT staff whose employment is anticipated to transfer to [ANY TRUST] on [1 April 2011]. Yours sincerely [Name] [Job Title] Annex: Employee liability information table 8

12 ANNEX TO TEMPLATE LETTER 4 TEMPLATE EMPLOYEE LIABILITY INFORMATION SPREADSHEET REQUIRED BY REG.11 TUPE? Y Y Y Y Y Y Y Y Y Y Y DETAILS Personnel or employee number Employee full name NI number Job title Work location Age Gender Continuous service date (dd/mm/yy) Date employment started with existing employer Contractual weekly hours Regular overtime hours per week Salary (or hourly rate of pay) Payment interval Y Y Y Y Y Y Y Y Y Y Y Y Y Y Agreed Any other Type of Private Bank Sick leave pay allowances pension health holiday entitlement increases paid provision insurance entitlement Bonus payments Car allowance ( per year) Any other benefits in kind Current employer contribution rate Annual leave entitlement (excluding bank holidays) Contract end date (if fixed term contract or temporary contract) Maternity or paternity leave Sick pay entitlement 9

13 Y Y Y Y Notice Any collective agreements? Employment status (for example, employee, selfemployed, agency worker)? % of working time dedicated to the provision of services under the contract Currently absent from work due to long term sickness absence, maternity leave or career break (indicate reason for absence) Information about any disciplinary procedure taken against, or grievance procedure taken by, the employee in the last two years. Information of any court, tribunal, case, claim or action: (a) brought by the employee against the transferor previous two years; and (b) that the transferor has reasonable grounds to believe that an employee may bring against the transferee, arising out of the employee's employment. Employee CRB checked? (yes or no) If "yes" enter date of CRB check notification to you and employee If "yes" enter the category of the CRB check notification to you and employee Pension information: length of pensionable reckonable service 10

14 TEMPLATE LETTER 5 Letter from TRANSFEROR to individual employees, confirming the transfer Dear [employee] Transfer of [Community Services] from [NHS PCT] to [ANY TRUST] I am writing to confirm that consultation with staff side representatives has now concluded and that the transfer of [DESCRIBE] community services to [ANY TRUST] will take place with effect from [1 April 2011]. Your terms and conditions of employment, place of work and continuous service will not be affected by the transfer. [However, as we have advised your representatives, [ANY TRUST] intend to review the operation of the services with a view to maximising efficiencies from the process of integration. I understand that [ANY TRUST] will begin a process of consultation with you and your representatives about any such review after the transfer date]. I would like to take this opportunity to thank you for your service for the [NHS PCT] and to wish you well for the future. Yours sincerely [Name] [Job Title] 11

15 TEMPLATE LETTER 6 Letter from the TRANSFEREE to appropriate representatives of employees affected by the transfer (in the NHS this will be recognised TRADE UNIONS), providing the information required under regulation 13 TUPE. NOTE: The letter should be sent to sent to each union representative by being delivered to them, or sent by post to an address notified by them to the employer AND sent by post to each trade union at the address of its head or main office. You should seek advice if there are no recognised trade unions for staff or a particular group of staff, since it may be necessary to elect representatives. Dear [ ] Transforming Community Services Proposed Transfer of [COMMUNITY SERVICES] from [NHS PCT] Transfer of Undertakings (Protection of Employment) Regulations 2006 ( TUPE ) As you know, government policy is to create modern, responsive community services of a consistently high standard. The Transforming Community Services programme aims to deliver this. The programme has three key elements: quality, enabling transformational clinical practice and transforming the commissioning of community services. To help deliver transformation of the commissioning of community services, the relationship between providers and commissioners of community services is changing, and from 1 April 2011 will be purely contractual. [Over the past few months, [NAME OF SHA] has facilitated several meetings of representatives of local trusts and recognised trade unions. There have also been additional discussions between this trust s management and staff side. The purpose of all of these meetings has been to discuss the possible transfer of community services from primary care trusts to local trust(s).] ** I am writing to you to inform you that the Trust has been successful in its application to take over responsibility for the [COMMUNITY SERVICES] currently provided by [NHS PCT]. It is therefore proposed that those services be transferred to [ANY TRUST]. This letter is to inform you, in advance of the proposed transfer, of certain matters as required by regulation 13(2) TUPE. 13. It is currently intended that the proposed transfer will take place on 31 March The legal implications of the proposed transfer are that TUPE will apply to transfer to [ANY TRUST] the employment contracts and statutory continuity of services of all of the employees who assigned to the provision of community service within [NHS PCT]. Otherwise than as set out in this letter it is not envisaged that there will any other economic or social implications of the proposed transfer. EITHER 15. A provisional list of employees who will transfer to [ANY TRUST] will be prepared as soon as possible and sent to you for the purposes of consultation. 16. [The Trust intends that, after the proposed transfer date, the following measures will be taken in connection with transferred services. Some of these measures may affect Trust staff: 17. [SET OUT MEASURES]] 18. We will contact you shortly concerning the practical arrangements for consultation in relation to these proposed measures.] OR 19. The Trust does not currently intend to take any measures which will affect its employees: formal consultation is therefore not necessary, [but consultation in relation to the practical aspects of the transfer may help to clarify any issues that arise and minimise disruption and uncertainty for the affected staff. We 12

16 will therefore contact you to discuss arrangements for consultation meetings]. OR 20. [If you wish to request a meeting with the Trust and [NHS PCT] to discuss any aspect of the proposed transfer, we will give proper consideration to any such request] 21. We anticipate that you may require access to the affected employees and we suggest that appropriate arrangements are discussed at our next meeting [OR SET OUT ARRANGEMENTS]. An office at [LOCATION] has been set aside for your use and it has internet access and phone lines. If you have any questions regarding the content of this letter please contact [THE WRITER OF THIS LETTER]. Yours sincerely [ NAME] [JOB TITLE] ** Note: taken from Transforming Community Services: Enabling New Patterns of Provision (Transforming Community Services team, Department of Health) 13

17 TEMPLATE LETTER 7 Letter from TRANSFEREE to appropriate representatives (recognised trade unions) of its own employees - commencing consultation on measures in relation to employees affected by the transfer This letter should be sent to BOTH local union representatives AND to the union at its Head Office. Dear [ UNION REPRESENTATIVE ] Start of consultation concerning measures envisaged in relation to the transfer of [SPECIFY] community services from [ANY PCT] to [ANY TRUST] I write further to my letter of [DATE] in which I informed you of the proposed transfer of the [SPECIFY] community services from [ANY PCT] to this Trust. [As advised in that letter,] the Trust envisages that it will be necessary to take some measures, in connection with the transfer, which may affect our employees. This letter is intended to begin the process of consultation with you about the proposed measures. [The measures we envisage as are follows: [SET OUT PROPOSED MEASURES AND POTENTIAL EFFECTS ON EXISTING EMPLOYEES, IF THIS HAS NOT ALREADY BEEN DONE, OR IF THEY HAVE CHANGED] I would be grateful if you would send me any representations that the union might have in respect of these proposed measures. Once these are received and we have had time to consider them, the Trust will arrange a meeting with representatives of the recognised unions to discuss the proposals and seek agreement as to the way forward. Yours sincerely [NAME] [JOB TITLE] 14

18 TEMPLATE LETTER 8 Letter from TRANSFEREE (new employer) to any existing employees who may be affected by the transfer NOTE: this letter should not be sent until the unions have at least been informed of any possible redundancies. Potential redundancies are a measure and the obligation to inform and consult under TUPE is triggered. In addition to TUPE consultation a full collective redundancy consultation must be carried out (assuming 20 or more redundancies are proposed or (if numbers are lower) required by any organisational policy). These two types of consultation can be carried out at the same time and in the same meetings, provided that the twin purposes of the consultation meetings is made clear. Individual consultation must also take place to minimise the risk of an unfair dismissal. Dear [ ] I write to inform you that on [DATE] the Trust will take over provision of [SPECIFY WHICH ONES] community services currently provided by [ANY PCT]. This will, of course, require some integration of staff from [ANY PCT S] provider services into our own Trust. [One of the main aims of integration of community services is to improve the quality and efficiency of provision of these services. Whilst the process will not give rise to any major disturbance for the majority of the Trust s existing staff, it is possible that integration of the new services may necessitate a degree of restructuring in some teams and departments, in order to maximise efficiencies. It is hoped that any restructuring will be possible without compulsory redundancies. However, if redundancies are required then full consultation with staff side representatives and individuals will take place and other alternative measures will be considered before any decision is taken. The Trust will make every effort to avoid any compulsory redundancies]. Yours sincerely [NAME] [JOB TITLE] 15

19 TEMPLATE LETTER 9 Letter from TRANSFEREE to transferor requesting Employee Liability Information and additional due diligence information concerning employees Note: Under Regulation 11 of TUPE, the TRANSFEROR is not required to provide the TRANSFEREE with Employee Liability Information until 14 days before the transfer date. For practical reasons, the TRANSFEREE will usually want more detailed information much earlier in the process. This letter is intended to be sent to the TRANSFEROR at an early stage in the process, and should give rise to cooperative discussion (perhaps involving the unions in some consultation meetings) with a view to finalising a list of transferring employees and agreeing the level of employee information which the PCT should provide. Dear [ ] Transfer of [SPECIFY] Community Services to [ANY TRUST] We refer to the above proposed transfer of [SPECIFY] community services ( the Services )] staff from [NHS PCT] to [ANY TRUST], with effect from 31 March We consider that the transfer will be a relevant transfer for the purposes of the TUPE Regulations 2006, and that the Cabinet Office Statement of Practice 2000 will apply to it. The Trust is obliged to provide you with details of any measures that it intends to take after the transfer in relation to transferring staff, so that you can inform the affected staff as required under TUPE. [In order to facilitate the transfer, the Trust would be willing to participate in joint consultation with the transferring staff before the transfer takes place, so that any issues raised by the staff can be promptly resolved.] [We have provided you with details of the measures that we currently envisage in our letter of [date].] In order to enable us to assess the issues, facilitate the transfer of the services and provide you with any details of further measures, (if any) and as a matter of good practice more generally, can you please now provide us with the details set out in the Annex to this letter in respect of each of the staff to be transferred: [We anticipate that the information provided by you will be subject to changes which may take place before the transfer date. We therefore ask that the list information is updated and re-provided on [DATES EG BIMONTHLY] [the last update being [14] days before the transfer]. During the [28] days before the transfer, we request that, so far as it is able to do so, the PCT provides details of any changes to the information on a rolling basis up to the point of the transfer, to ensure that the most up to date information possible is given to the Trust prior to the transfer of staff. We appreciate that you will wish to anonymise some of the information so as to ensure compliance with the Data Protection Act: we assume that you will take the necessary steps in that regard. However please note that the identities of the transferring employees must be disclosed to the Trust no later than 14 days before the transfer date, as required by regulation 11 of TUPE. Please let us have the details requested in the Annex to this letter as soon as possible, and in any event by no later than [INSERT DATE SAY 28 DAYS FROM THE DATE OF THE LETTER?]. We confirm that the information provided in response to this letter will be kept strictly confidential to the Trust s team that is managing the transfer, and their legal and professional advisers. If you have any queries, please contact (insert name) at the Trust on (insert telephone and detail) 16

20 We look forward to hearing from you. Yours sincerely [NAME] [JOB TITLE] Enc: Annex - Information concerning workforce of transferring services 17

21 ANNEX TO TEMPLATE LETTER 9 To be attached to letter from TRANSFEREE to TRANSFEROR, requesting workforce and employee liability information. Note: this is a very complete request for employee information, similar in scope to what would be expected in a commercial transaction in the private sector. It may specify more detail than is required in some TCS transactions. Some Trusts may wish to undertake financial modelling which will require details of employment costs and risks. It is recommended that, before sending this request, Trusts should consider carefully (a) whether all of this information is necessary, in view of the perceived employment risk, and (b) whether it is realistic to expect the transferor to provide all of it. The minimum level of detail that the transferor is required to provide is set out in a table at Annex ## EMPLOYEE LIABILITY INFORMATION Workforce 1 An anonymised list of all employees and directors assigned to the Services ( the Transferring Employees ), showing the following details for each employee: a b c d e f g h i j k job title department, team and location date of birth start date in their current post continuous service date (and length of reckonable NHS service) National Insurance letter details of salary, AfC band and point details of pension if not in the NHS pension scheme details of current or anticipated details of accrued holiday entitlements details of any requests for flexible working l details of any adjustments made in compliance with the Disability Discrimination Act 1995 m details of absence records 2 Anonymised details of those employees of the PCT who are assigned to the Services but will not be transferred to the Trust, with reasons. 3 Anonymised details of anyone assigned to the Services who is not an employee of the PCT (for example within arrangements under s.75 of the NHS Act 2006). 4 Details of anyone who provides any part of the Services but who is not assigned to the Services. 5 Copies of the service agreements for all executive directors and senior managers (employed at Agenda for Change ( AfC ) Band [8b] and above) who are assigned to the Services. 18

22 6 A list of those employees regarded as key in the provision of the Services [OR ALL TRANSFERRING EMPOYEES WHO ARE EMPLOYED AT AFC BAND [8] AND ABOVE] together with copies of their job descriptions. 7 Details of any Transferring Employees whose contracts of employment do not incorporate the AfC Terms and Conditions of Service. 8 Details of (and copies of any relevant documents relating to) any existing or proposed bonuses, allowances, incentives or any other payments or benefits which are paid or provided to any employees assigned to the Services other than under AfC terms and conditions. 9 Details of any loans made by the PCT for the benefit of any Transferring Employees. 10 Details of any offers, promises or agreements to any future variation in any contract of employment of the Transferring Employees. 11 Details of any Transferring Employee who has received or has given notice or is likely to give notice to terminate their employment in connection with the Services, including details of the reasons for such notice. 12 Details of any planned dismissal of any key Transferring Employee. 13 Details of any Transferring Employee who has been off sick for a period of [21] days or more in any [SIX]- month period within the last [THREE] years (whether or not consecutive). 14 Details of any employee who is receiving or is due to receive Temporary Injury Allowance and any pending or threatened claims for such payment. 15 Details of any Transferring Employee currently or previously employed by the PCT in the Services who is on secondment, long-term sick, maternity, paternity, adoption or parental leave or other leave or who has a right to return to work or a right to be reinstated or re-engaged in the Services or to any other compensation. 16 Details and copies of any consultancy agreements or other agreements for the provision of services in connection with the Services by workers, consultants or contractors who are not employees of the PCT. 17 Details of any dispute, claim or legal proceedings (whether arising under contract, common law, statute or in equity or otherwise) brought against the PCT by any person currently or previously employed or engaged in providing the Services or by any trade unions, in the last [two years] or that the PCT has reasonable grounds to believe may be brought against the PCT, together with details of any payments and costs incurred (or likely to be incurred). 18 Details of any amounts outstanding or promised to any employees, workers, consultants or contractors employed or engaged in providing the Services and any liability incurred by the PCT which remains undischarged for breach of any employment contract, redundancy payment (statutory or otherwise, including protective awards), compensation under any employment legislation or regulations or wrongful dismissal, unfair dismissal, equal pay, sex, race or disability discrimination or otherwise. 19 Details of any disciplinary procedures taken against any person employed or engaged by the PCT or the Services or any grievance procedures taken by any such person in the last [two years]. 20 Details of any relevant transfer (for the purposes of the Transfer of Undertakings (Protection of Employment) Regulations 1981 or the Transfer of Undertakings (Protection of Employment) Regulations 2006) in the last [TEN] years, to which the PCT (or any previous provider of part or all of the Services) has been a party, that affected any of the Transferring Employees, including details of: a any variation of any such Transferring Employee s terms of employment varied for any reason as a result of or connected with such transfer; b details of any dismissal connected to such transfer; 19

23 c d details of any failure to comply with obligations to inform or consult in connection with such transfer or any redundancy affecting any Transferring Employee; and details of any right to an early retirement pension on redundancy or other dismissal existing prior to such transfer or affecting any Transferring Employee. 21 Details of the PCT's compliance with any obligations to inform and consult with trade unions, staff associations and other worker representatives in relation to the transfer of the Services to the Trust. 22 Details of any trade union, staff association, staff council, or other similar organisation recognised by the PCT in connection with any of the Transferring Employees, and copies of all agreements, constitutions, collective bargaining arrangements and negotiations with any such body. 23 Details of the current state of any negotiations with any trade union, staff association, staff council, works council or other organisation formed for a similar purpose, or with employee representatives, which might affect the terms and conditions of employment, working arrangements or severance payments of any of the Transferring Employees. 24 Details of any current and historic labour relations issues, including any strikes, stoppages, or other concerted action. Pensions 25 Details of any Transferring Employees (and employees listed in response to questions 2, 3 and 4 above) who are not active members of the NHS Pension Scheme. 26 In respect of any Transferring Employees (and employees listed in response to questions 2, 3 and 4 above) who are members of the NHS Pension Scheme, details of which section of the Scheme they are members of. 27 Details and copies of relevant documents relating to any pension scheme(s) other than the NHS Pension Scheme operated by the PCT in connection with employees listed in response to question 25 above: a b c d e f g h i trust deeds and rules; employee booklets and notices; names of the present trustees and actuary; actuarial valuations, trustees' annual reports and annual audited accounts for the last [two] years; details of the current rate of the employer's and employees' contributions to the scheme(s) and any proposed alterations to the current arrangements; details of insurance premiums, taxes and expenses paid in relation to the scheme(s); a list of all existing members of the pension scheme(s) (and those likely to become members within the next [six] months) including sex, date of birth, date of joining the scheme(s), current pensionable salary and any additional benefits granted or additional contributions made; details of any ex gratia or unapproved pension arrangements granted to employees; copy of the HM Revenue & Customs approval letter(s) for the scheme(s) and details of any reason of which the PCT is aware as to why the pension scheme(s) may cease to be approved; and j copy of the contracting-out certificate(s) under the Pension Schemes Act

24 28 Have the trustees and the PCT complied with all relevant pensions legislation and the rules of the pension scheme(s)? 29 Details of any claims or complaints that have been made or are pending or threatened in relation to the pension scheme(s) or in respect of the provision of (or failure to provide) pension, lump sum, death or illhealth benefits by the PCT in relation to any of the employees of the Services. 21

25 TEMPLATE LETTER 10 Letter from TRANSFEREE to transferor, setting out measures to be taken with regard to transferring employees. NOTE: if redundancies are contemplated then there must be a separate consultation exercise carried out by the transferee/new employer including where appropriate collective as well as individual consultation on the proposed redundancies. Dear [ ] Transforming Community Services Proposed Transfer of [SPECIFY] Community Services to [ANYTRUST] on 31 March 2011 I refer to your letter of [date]. I write to inform you that [ANY TRUST] envisages that, after the transfer date, the following measures will be taken in connection with the transferred employees: [SET OUT MEASURES BROKEN DOWN IN GROUPS OF EMPLOYEES IF NECESSARY INCLUDE POTENTIAL TIMESCALES. IF REDUNDANCIES ARE CONTEMPLATED WILL TRANSFEREE S EIXISTING EMPLOYEES BE PART OF THE POOL OF SELECTION? IF NOT, EXPLAIN WHY NOT EG DIFFERENT DEPARTMENT. INCLUDE INFORMATION ABOUT AVOIDING COMPULSORY REDUNDANCIES, ANY VOLUNTARY REDUNDANCY/SEVERANCE SCHEMES ETC]. Yours sincerely [NAME] [TITLE] 22

26 GUIDANCE ON TUPE 3. The Purpose of TUPE To protect employees by providing the right to be informed and consulted preserving terms and conditions of employment after the transfer; and prohibiting dismissals in connection with a transfer 4. What is TUPE? The Transfer of Undertakings (Protection of Employment) Regulations 2006 European Acquired Rights Directive First came into force in 1981, updated and reissued in When is it not TUPE? Share sales Genuine asset purchase e.g. building purchase Short term contracts i.e., one-off contracts, e.g. a research project for 12 months. 6. When is it a TUPE transfer? 6.1 TUPE IS NOT OPTIONAL The application of TUPE is a matter of law and fact Parties (including employees) cannot agree not to apply TUPE The Cabinet Office Statement of Practice and the Code of Practice on Workforce Matters in Public Sector Service Contracts effectively impose TUPE in most public sector situations. 6.2 There are two sorts of transfers: Transfer of an undertaking from one organisation to another e.g. a service moves from one host trust to another host Service Provision Change 23

27 An example of a transfer of an undertaking and a service provision change: Principal 1 st generation TUPE In-Sourcing Contractor 1 Contractor 2 2 nd generation TUPE 6.3 Service Provision Change Test Is the service currently provided by an organised and identifiable group of employees? No Yes Is the group dedicated to the provision of the service? No Yes Does new provider intend to continue the provision of the service? No Yes TUPE applies Secondary test applies 24

28 6.4 Secondary ( Factoral ) Test Is there a transfer of an economic entity which retains its identity after the transfer? Consider: the nature of the business similarity of activities before and after whether the majority of staff have been taken on by the new employer (or would have been if the new employer had not been trying to avoid TUPE) whether assets have transferred whether majority of service users remain the same whether or not there has been a break 7. Cabinet Office Statement of Practice Cabinet Office Statement of Practice on Staff Transfers in the Public Sector and the annex to it, A Fair Deal for Staff Pensions most public bodies should operate as if TUPE applies (even if it otherwise may not) includes service provision change between public and private sector organisations; and transfers between different parts of the public sector see also below Pensions 8. Discussion Points - Could it be TUPE? A Trust merges with another A Trust takes over the pathology operations of another Trust The Trust takes over all the mental health functions of a private provider which ceases to exist? The Trust changes its supplier of printer paper A Trust takes its IT function back in-house A PCT s contract for the supply of physiotherapy services to a third party comes to an end and the service is discontinued. The PCT enters into a partnership agreement with the Local Authority to provide health visiting services. (Potentially yes. However the LA/PCT must take over responsibility for the service on behalf of the other. Normal S75 arrangements do not create a TUPE situation). The PCT decides to commission its anti-coagulation service from 17 GP providers. Previously it was run in house. (Potentially yes but it may be difficult to determine if the service is continuing and who is eligible to transfer) Yes No 25

29 Yes No The PCT outsources its podiatry service to an independent sector provider and a Foundation Trust A Trust re-tenders its legal services and a new provider is appointed. Several projects are ongoing and will remain with the outgoing provider to be completed. Audiology services are provided by two Trusts. The Services are put out for tender and the new providers are allocated including: a Social Enterprise a group of staff from one of the original two Trusts; a private contractor 9. Who Transfers? Only employees assigned to the relevant (part of) the service or undertaking immediately before transfer. Includes those who would have been employed immediately before transfer if they had not been dismissed by reason of the transfer. Contractors and agency staff do not TUPE transfer (but beware contractors who may argue that they should be considered to have employee status) Extended definition of employee under TUPE 9.1 Who is assigned to the service? Consider: amount of time spent by the employee in the operation of the service but there is no percentage test. value given to each operation by the employee terms of the employee s contract (particularly duties in place of work) how the cost of the employee is allocated within the organisation. Don t forget Ghosts employees absent from work but assigned to the service: maternity leave or long-term sickness absence and (perhaps) secondments. 9.2 Discussion Points Who transfers? A Trust outsources MRI scanning services to a new provider There are: 10 clinical operators who are dedicated to the service a team of administrative and clinical staff who provide services to the MRI team and other activities delivered by the Trust a supervisor for the administration team who splits her time 50:50 between this service and other duties, but is required to give this service priority at busy times 11 nurses provided by an agency. The new provider will use a different agency 26

30 7 nurses provided by the Trust s bank staff. 9.3 Do assigned employees have to transfer? No employees can object A simple objection - by notice in writing prior to the transfer no unfair dismissal / redundancy compensation payable, treated as resigned. can be used as a device to retain key staff, contract may prevent this. can staff object after the transfer? A more complex objection which can result in claims against the old employer. If new employer is proposing substantial changes to the employee s contract; or changes in working conditions to material detriment of the employee.. employee can resign and claim unfair dismissal. Current maximum award (basic and compensatory) is 76, Secondment Can parties avoid TUPE by seconding staff to new employer? NHS Retention of Employment Model Employees remain employed by NHS body but are seconded to the new private sector service provider. Model requires staff to object to transfer and staff re-employed by original trust only permitted for soft facilities management staff in Private Finance Initiative Schemes and staff working in Independent Sector Treatment Centres. Since July 2009 and the bringing into force of the National Health Service Pension Scheme (Amendment) Regulations 2009 (SI 2009/1298) All NHS organisations must have DH approval before using. Staff are excluded from the NHS Pension Scheme if they have been subject to a nonapproved application of RoE (on or after 13 Jan 2009). 9.4 Practical Concerns Beware of contractors / old employers dumping staff Beware of contractors/old employers cherry picking staff Beware of contractors/old employers changing terms and conditions of employment Timing issues be alert for a series of transactions? 27

31 Obtain sufficient information to identify who will transfer at an early stage (see below : due diligence). 10. What Transfers? 10.1 Contracts of employment transfer as if originally made between the new employer and the employee All statutory and contractual employment rights transfer including: terms and conditions of employment benefits in kind early retirement and enhanced redundancy entitlements collective agreements with o ld employer/transferor s recognised trade union(s) trade union recognition where organised grouping of resources/employees maintains a distinct identity in new employer s undertaking contractual right to an employer s contributions to a personal pension plan (see Pensions below). Contracts of employment transfer so service-based employment rights also transfer and continue to accrue. Non contractual policies and procedures do not transfer New employer inherits liability for: arrears of pay outstanding claims unfair dismissal unlawful discrimination personal injury / negligence equal pay protective awards for failure to consult (liability may be shared with old employer/transferor). But NOT: criminal liabilities; tax and national insurance due in respect of period before the transfer. 11. Discussion Points The Trust inherits staff who: 1. have a 3 year pay protection policy. The Trust has reduced its pay protection period to 1 year. 2. have suffered an injury at work but have yet to make a claim; 28

32 3. have the benefit of a contractual disciplinary procedure which provides for three appeal stages; 4. are contracted to work for 35 hours per week, rather than 37 hours that Trust staff are obliged to work; 5. are members of OLDSKOOL, a union not recognised by the Trust but which has over the years made numerous informal request for recognition; 6. have potential equal pay claims relying on a comparator that remains with the transferor. What transfers? What practical problems are there and how should the Trust address them? 12. Pensions General position under TUPE: Transferred employees who have a contractual right to an employer s contribution to a personal pension plan retain that right. Transferred employees who are (or are eligible to be) members of an occupational pension scheme are entitled to a guaranteed minimum level of benefits post transfer. Transfers from the Public to Private Sector: Cabinet Office Statement of Practice on Staff Transfers in the Public Sector and the annex to it, A Fair Deal for Staff Pensions Transferee must offer: membership of a scheme that is broadly comparable (GAD certificate of comparability) certain security safeguards bulk transfer agreements for award of day to day past service credits by new scheme provide reasonable pension arrangements to new hires employed on the contract Commissioner must: set out non negotiable terms for bulk transfer agreements early in procurement process shortfall provision? ensure broadly comparable pension arrangements are achieved going forward N.B. Early retirement and redundancy entitlements under pension scheme are preserved by TUPE ( Beckmann/Martin rights) Continuing access to the NHS Pension Scheme currently three types of non-nhs body which may qualify to provide access to the NHS Pension Scheme (NHSPS) to its employees: NHS Contract Services Providers Direction Employers including Social Enterprises NHS/Local Authority Partnerships ("section 75 partnerships") 29