TUPE or not TUPE.

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2 TUPE or not TUPE

3 Changes to TUPE Why and when Why: View that the regulations are convoluted and difficult and stifle innovation But: They had bedded down and now we will be further reliant upon new case law When: Changes from 31 January 2014 but..some later

4 The Main Changes What amounts to a service provision change Restrictions on changes to terms and conditions have they been loosened? Approaches to the transfer of terms of collective agreements What about relocation changes and ETO reasons? Collective redundancy consultation but now pre-transfer Employee liability information now 28 days pre transfer

5 Service provision changes Example: School catering staff working within a school, employed by the local authority DSO catering team, where a new contractor is brought in by the school Previous position: TUPE applied where an employer engaged a contractor to do work on its behalf, engaged a different contractor to do that work in place of the first contractor, or brought the work in-house And now: TUPE applies in these circumstances, as long as the activities being carried out after the transfer are fundamentally or essentially the same as before the transfer

6 What do the service provision changes mean in practice? What does this mean for councils? Will fundamentally or essentially the same as before the transfer mean new contractors will exaggerate differences to avoid TUPE? Still not entirely certain.

7 Changing terms and conditions When can you change terms and conditions? If the transfer is not the sole or principal reason for the change, but the reason is otherwise connected to it. If the transfer is the sole or principal reason for the change but: there is an ETO reason and the employer and employee agree to the change the change is permitted by the employment contract

8 Changing terms and conditions So when can you change terms and conditions If the reason is not the sole or principal reason, but another reason connected with the change. How useful will this be? If the sole or principal reason is the transfer but: there is an ETO and employer and employee agree change permitted by the contract e.g. flexibility or mobility collective agreement But a word of caution may be a risk of a material detriment claim under Regulation 4(9) changes so bad, forced to resign, unfair dismissal.

9 Relocation of the workforce Example: A new contractor takes over a service but wants to locate its workers centrally in its operational depot which services three different councils. Your former employees will be relocated. Previous position was that relocation of the workforce was not by itself an ETO reason, which meant that changes of location redundancies, where there was no other ETO reason, were automatically unfair under TUPE. Now: Relocation of the workforce is expressly included as an ETO reason

10 Relocation of the workforce What does this mean for councils that outsource contracts knowing a move of workers is likely? Dismissals as a result of a change of location could be potentially fair on the basis of redundancy Where an employee wants to relocate, the contract could now be varied by agreement in order to provide for the new location But industrial implications for councils negotiating outsourcing which involve location changes

11 Collective agreements The old position was that contractual terms (derived from collective agreements) are treated in the same way as other contractual terms when making changes in a TUPE transfer situation Case law determined that the terms that transfer are those which exist at the time of the transfer (a static approach), rather than those which occur post transfer, and the transferee has not negotiated those changes

12 Collective agreements The new position: Codifies the case law on a static approach Contractual terms derived from collective agreements can be varied after more than a year has passed since the transfer, provided that overall the contract is no less favourable to the employee

13 Pre-transfer Collective Redundancy Consultation Amendments made to the Trade Union and Labour Relations (Consolidation) Act 1992 New s.198a : there is to be, or is likely to be, a relevant transfer transferee proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less one or more of the transferor s employees who will, or is likely to, transfer may be affected by dismissal or measures in connection with it

14 Pre-transfer Collective Redundancy Consultation But The Transferee is reliant on transferor s co-operation Consultation - Risk of not completing consultation prior to the transfer. Who should the transferee consult with? Can notice be given pre-transfer? Transferor cannot rely on transferee s ETO reason Pooling: Transferee will need to consider whether the transferring employees will need to pool with existing employees unfair selection for redundancy?

15 Employee liability information To be provided at least 28 days before the transfer (previously 14 days) Applies to transfers on or after 1 May 2014 No additions to the information to be provided Continue to seek indemnity protection or price adjustment mechanism for failure to provide information or provision of inaccurate information

16 Conclusions If the idea was to simplify there are new complexities created! Unlikely the changes will substantively weaken TUPE as there may be timidity until new case law emerges but Does the 12 month rule on collective agreements in effect limit TUPE to that time period? Beware of the industrial relations implications - bound to create enhanced nervousness over future changes to T&Cs and potential for TUPE to be a by-line for redundancy

17 Thank You!

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