Bristol City Council TUPE (Transfer of Undertakings (Protection Of Employment)) Guidance for Commissioners
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1 Bristol City Council TUPE (Transfer of Undertakings (Protection Of Employment)) Guidance for Commissioners 1. Introduction TUPE is shorthand for the provisions of the Transfer of Undertakings (Protection of Employment) Regulations This is employment legislation that applies in many situations where a service transfers from one provider to another as a result of a commissioning process. TUPE was first introduced in The 2006 regulations are the updated regulations which currently apply to a service provision change. The purpose of TUPE is to protect employees who are affected when a service they are deliver transfers from one provider to another. This guidance provides commissioners with an outline of the steps that should be taken to ensure TUPE responsibilities are met by Bristol City Council and that we also bring TUPE responsibilities to the attention of external providers. TUPE applies regardless of whether the external provider is a voluntary or community organisation or a private sector organisation and regardless of the size of the organisations involved. TUPE applies to all public services ; this document applies only to Bristol City Council and its commissioning processes. 2. Legislation The provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006 apply to a relevant business transfer where the transferor (the current provider) has a dedicated team of employee(s) that carry out the service activity that is to be transferred. In practice this will often apply where any City Council service is; out-sourced brought back in-house / in-sourced where a contract that former City Council employees are undertaking comes up for renewal and is awarded again to the same contractor or to a new contractor where a City Council service contract is transferred from one external organisation to another TUPE protects employees in the above situations so that wherever possible people are kept in employment under equivalent conditions and continue delivering the service. TUPE will also apply where a contractor who has been awarded a contract subsequently awards or sub-contracts all or part of it to another contractor whilst retaining the contract with the main client. Page 1 of 7
2 Summary of the regulations : All employees employed in the undertaking to be transferred automatically become employees of the new employer (the transferee ). An employer cannot pick and choose which employees to take on. Employees must transfer on the same contractual terms and conditions of employment as those they had with their former employer (except for certain occupational pensions rights). Length of service is also maintained from the former employer. The new employer takes over all liabilities (e.g. live employment tribunal claims) arising from those contracts of employment, except for criminal liabilities. Any liabilities relating to employees who were dismissed before the transfer (for a reason connected with it) also transfer to the transferee unless specified otherwise in the agreement between the organisations. Any collective agreements made with recognised trade unions and any recognition agreements where the business retains a distinct identity following the transfer will also transfer. Employees may object to the transfer or resign and claim unfair dismissal against through Employment Tribunal if the transfer involves a substantial change in their working conditions to their detriment. 3. Responsibilities of Commissioners It is important to be clear that in all the above scenarios responsibility for the employees affected and all employment rights and responsibilities lies with the new employer from the point of transfer. The TUPE regulations are complex and their application will be different in each commissioning situation therefore it is important that legal advice is sought in each case. Where the transfer is from one external provider to another the external provider must be advised to seek their own independent advice at an early stage in the commissioning process. Commissioners need to be aware at the beginning of any commissioning process that there could be TUPE implications. Thinking about TUPE needs to start from the ANALYSE stage of the commissioning cycle.. In some cases, commissioners may make a judgement as to whether the bidders are experienced in dealing with TUPE issues in a commissioning and procurement process. For example, many small organisations are unfamiliar with TUPE and may, if not supported, be deterred from participating in the commissioning process. If bidders are deemed to be experienced commissioners will provide the necessary contact details for the current providers and will expect the bidders to follow the due process. Commissioners will monitor the bidders to ensure they are on track Page 2 of 7
3 If it is deemed that the bidders are not experienced in dealing with TUPE issues in a commissioning and procurement process, and where the council can facilitate the process, commissioners will gather information, from current providers, about employees who may be affected by TUPE at an early stage in the commissioning cycle. This is so that the council can tell potential providers about the employees that may have a right to transfer and the potential providers can cost the implications of TUPE in to their bids. Without such information, providers may drop out of the commissioning process, which could unreasonably elevate some risks (lack of competition; market failure) to the successful completion of the project. However, it must be noted that current providers may be under no legal (or contractual) obligation to provide information about their employees prior to the 14-day requirement of the TUPE regulations (see 3.3 below). Commissioners should review the grant agreement/contract of current providers to check for the inclusion of any contractual obligation to provide employee information earlier than the 14 day period. Commissioners should be sensitive to this issue and communications and requests should emphasise the bigger picture that provision of employee information is in the best interests of employees, effective transitions to new services and, ultimately, service users. In all cases, it is in service users best interests that services are commissioned efficiently effective transfer of employees is a part of that and current providers must be encouraged to participate in the sharing of information at appropriate times. Withholding information could be described by potential providers as unfair practice and this could result in challenges to the commissioning process. Commissioners should be aware of that risk and promote to providers the need for good TUPE practice. In the case of VCS providers, commissioners should emphasise the commitments and values in the Bristol Compact. If the city council is the transferor the council s Human Resources department will be involved and so will relevant trade unions. In this case there is already detailed guidance on The Source including template letters that can be used and adapted for the given commissioning process. Go to Analyse Stage The Analyse stage includes identifying legislation and guidance relevant to the commissioning process. At this stage commissioners should : Familiarise themselves with the basic principles of TUPE Identify the providers whose employees may be affected by TUPE, including the council if the council is potentially the transferor Flag up TUPE as an issue that needs to be considered in any project documentation including the risk and equalities impact assessments. Page 3 of 7
4 Communicate the need for support and advice providers (potential and current) should be advised that their employees should have access to TUPE support and advice, for example, though trade unions. 3.2 Plan Stage In the Plan stage the bulk of the work is done to develop the service design and specification and to produce the commissioning strategy. Information about all employees potentially affected by TUPE needs to form part of the commissioning documentation that is made available to prospective bidders in the draft Commissioning Plan. (The consultation period is 12 weeks for the draft Commissioning Plan and this will allow current providers to engage with their employees and factor TUPE in to their bids in terms of the possible costs of employee transfers. TUPE will also form part of a provider s considerations when deciding whether to bid or not. At this stage commissioners should : Gather all required details about employees who could be affected (using the template spreadsheet attached at appendix 1) including employees of the city council currently delivering all or part of the service and employees working for external providers currently delivering all or part of the service. As this information may take some time to gather the process may even be started at the Analyse stage. As the employee details include personal information they should only be accessed by the lead commissioners. A summarised version of this information (with employee names, addresses, date of birth, National insurance number, CRB reference, pay number and pension scheme number removed i.e. any information that could be used to identify an individual) should be included in the package of information that is provided to potential bidders through Provide to Bristol. Bidders can then work out costings from this information. (This is also the appropriate time to collect equalities data about employees who may be affected which can be used to complete an equalities impact assessment of the impact on employees of the commissioning process. The equalities data should be collected on a separate spreadsheet and analysed separately to the TUPE information to avoid any concerns about it being used inappropriately). 3.3 Award Stage At this stage the successful provider(s) will be agreed and the contract (or funding agreement) will start. The collated employee liability information should be presented by commissioners whose interest at this point is to facilitate and encourage dialogue between former providers (transferors) and new providers and to ensure that service transition is successful. Whilst information on staff involved in TUPE transfers will hopefully have been accurately provided, commissioners should at this stage consider and act on the following: The transferor (current provider(s)) is obliged to give the transferee (new provider(s)) written information before the transfer about employees who are to Page 4 of 7
5 transfer and all rights and obligations towards them as per the spreadsheet shown at appendix 1. The council has an established process for this. Refer to the note about contractual obligations in section 3. If the council is the transferor the template at appendix 1 should be completed for all council employees affected and provided to the new provider(s). The collated employee liability information should be presented by commissioners whose interest at this point is to facilitate and encourage dialogue between former providers (transferors) and new providers and to ensure that service transition is successful. The information must be provided at least 14 days before the transfer but ideally longer in advance and must be no more than two weeks old. If the transferor is an external provider it will be their responsibility to provide the same information to the new provider at least 14 days before the transfer. In some cases a longer period will be specified in the contract/agreement with the new provider. As stated previously external providers affected by TUPE must be advised to seek their own independent advice. The council cannot enter in to providing any specific advice to external providers on TUPE matters. Completion of transfers needs to be taken in to account in the timescales for service delivery e.g. if there are more people transferred to deliver certain parts of the service than there are jobs time needs to be factored in for ring-fencing employees and recruitment and selection. Redundancies, including notice periods may also need to be factored in. Commissioners should allow for this in the target-setting and monitoring of the contract/funding agreement. Scenario 1 the service is transferring from the council to one or more external providers In this case there is already detailed guidance on The Source including template letters that can be used and adapted for the given commissioning process. Go to Scenario 2 the service/contract is transferring from one or more internal/external providers to a different combination of providers In this case the commissioner within the council should collect the information about employees who could be affected by transfer (whether internal or external to the council) and provide the anonymised details to bidders and potential bidders during the commissioning process. This is important not only to allow the bidders to see the employment implications of the commissioning process but also to enable bidders to ensure that liabilities can be covered and are part of a full cost recovery approach to the costings submitted as part of the bid. Although the council may not be the transferor in this scenario it is good practice for the council commissioner to obtain and collate the employee information in advance and facilitate this being provided to the successful provider(s). Page 5 of 7
6 For example, at a provider day, the commissioners should communicate to interested providers that TUPE might apply and that information about employees potentially affected will be made available. Good practice would also be to say that if, having taken their own independent advice, a bidder believes TUPE does apply they should build in costs to cover the level of liabilities that would come with TUPE transfer e.g. redundancy costs. Some providers may decide that the resource requirements associated with TUPE (e.g. management time, cost of legal and HR advice) are too high when weighed against the advantages of taking on the contract/service. Scenario 3 Where a contract that former City Council employees (that is, those previously transferred under TUPE) are undertaking comes up for renewal and is awarded again to a new contractor. Again, the commissioner within the council should collect the information about employees who could be affected by transfer and provide the anonymised details to bidders and potential bidders during the commissioning process. The same principles apply as in scenario 2. Example : Waste services commissioning. NB in this case council employees were the original providers of the service. SITA won the contract which resulted in transfer of council employees. In a further round of commissioning May Gurney (MG) won the contract and employees of SITA transferred to MG. TUPE applied in the transfer from BCC to SITA and then again in the transfer from SITA to MG. 3.4 Review Stage The Review stage is an opportunity to review the TUPE aspects of the commissioning process and to identify any learning points and opportunities to improve practice in future. At the review stage it will be useful to look at what the actual costs of TUPE were compared to the predicted costs. 4. Further Information In all cases commissioners should seek advice from Legal Services to ensure the council is complying with the legislation. Legal Services can be contacted on via this link on the Source Local voluntary and community sector organisations can be signposted to the Infrastructure Support Service led by Voscur for basic guidance on TUPE and to be signposted to possible sources of legal advice. Voscur , info@voscur.org Page 6 of 7
7 Appendix A) Standard TUPE questionnaire A standard TUPE questionnaire spreadsheet is available on The Source [Bristol City Council s intranet]. The spreadsheet includes the following information to be provided between employers. Name of organisation Employee Reference Number Job Title Work Area(s) (E.G. Particular client group/general) Where the provider supports service users at more than one site % of time spent by the employee at each site Pay Frequency Basic Pay Rate Weekly Contract Hours Holiday Entitlement Contractual Status Date of Commencement and Continuous Service Age (or age range eg "20-30, etc.) Gender Member of Pension Scheme Name of Pension Scheme Other Contractual Allowances Pay Grade Contractual Overtime and Rate Payable Page 7 of 7
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