Briefing on TUPE and Bristol Youth Links. 9 March Jeremy Harrison, Charity HR Simon Collinridge, Sherbornes Solicitors LLP Mark Hubbard, Voscur

Transcription

1 Briefing on TUPE and Bristol Youth Links 9 March 2012 Jeremy Harrison, Charity HR Simon Collinridge, Sherbornes Solicitors LLP Mark Hubbard, Voscur

2 Aims of the session To provide an overview of TUPE regulations and their purpose To understand how TUPE regulations relate to the Bristol Youth Links commissioning process.

3 What is TUPE? TUPE stands for the Transfer of Undertakings (Protection of Employment) Regulations, which were first introduced in 1981 and further updated in 2006

4 The purpose of TUPE To give protection to employees if the business in which they are employed changes owners. To move employees and any liabilities associated with them from the old employer to the new employer by operation of law. To prevent asset stripping.

5 5 critical issues 1. When TUPE is likely to apply? 2. What are the legal issues connected with TUPE? 3. What needs to be done to comply with TUPE? 4. What are the penalties for failing to do so? 5. What protection is there from the effects of TUPE?

6 1. When does TUPE apply? TUPE applies when an undertaking, or part of it, is transferred from one employer to another. For example: where all or part of a business or partnership is sold or otherwise transferred as a going concern and where there is no change of employer; where two companies, cease to exist and combine to form a third where a contract to provide goods or services is transferred in circumstances which amount to the transfer of a business or undertaking to a new employer. e.g. outsourcing

7 1. When does TUPE apply? TUPE applies, regardless of the size of the transferred undertaking, ie from large organisations employing thousands of employees to small businesses like a village shop with one assistant.

8 1. When does TUPE not apply? Where there is a share purchase because and the same company continues to be the employer; transfer of assets only (e.g. the sale of equipment alone wouldn't be covered but the sale of a going concern including equipment would be covered); transfer of undertakings situated outside the UK.

9 2. What are the legal issues? Employees within the entity that is transferring automatically have their employment transferred to the new employer. The new employer effectively steps into the shoes of the old employer. Employees can refuse to transfer (or "optout"), but depending on the circumstances of the case, they can lose valuable legal rights if they do.

10 2. What are the legal issues? The employee takes all their rights under the contract of employment, such as statutory rights and continuity of employment and includes employees' rights to bring a claim against their employer for unfair dismissal, redundancy or discrimination, unpaid wages, bonuses or holidays and personal injury claims etc Apart from an exception for pension rights, transferring employees have the legal right to transfer to the new employer on their existing terms and conditions of employment and with all their existing employment rights and liabilities intact.

11 2. What are the legal issues? Because the new employer takes on all the rights and liabilities of the workforce it inherits, it is critical that it knows exactly what it is inheriting. The old employer is required to provide to the new employer written details of all employee rights and liabilities that will transfer.

12 2. What are the legal issues? Any dismissals will be automatically unfair, where the sole or principal reason for the dismissal is the transfer. There is an exemption where the dismissal for an economical, technical or organisational reason (an "ETO" reason) requiring a change in the workforce. This ETO defence is narrow in scope and can be difficult to rely upon.

13 2. What are the legal issues? The new employer is prohibited from making any changes to the terms and conditions of employment of the transferred employees if the sole or principal reason for the variation is the transfer. Where an independent trade union has been recognised by the outgoing employer in respect of transferring employees, recognition will transfer to the incoming employer to the same extent.

14 3. What needs to be done to comply? Both sets of Employers must inform appropriate representatives of the affected employees of the transfer and any measures proposed, and must consult on any proposed measures. Certain specified information must be provided to the representatives long enough before the transfer to enable the outgoing employer to consult with them about it.

15 3. What needs to be done to comply? If there are any changes or proposals for changes following the transfer, these "measures" will have to be discussed with the representatives of the affected employees The incoming employer is required to provide the outgoing employer with information on proposed measures to allow the outgoing employer to comply with its duty to inform and consult.

16 3. What needs to be done to comply? If there is a failure to inform and consult, a complaint can be made to the Employment Tribunal. If successful, the Tribunal can award whatever compensation it considers just and equitable having regard to the seriousness of the employer's failure up to a maximum of 13 weeks' pay per affected employee. Information and consultation failures can result in joint and several liability between the outgoing and incoming employers.

17 3. What needs to be done to comply? The outgoing employer must provide employee liability information to the incoming employer. The outgoing employer has a duty to provide the incoming employer with written details of the transferring employees (including identity, age, particulars of employment, disciplinary and grievance records, employee claims and collective agreements) together with all associated rights and liabilities that will transfer. This information must be given not less than 14 days before the transfer.

18 4. What are the penalties for failing to comply? If the outgoing employer fails to supply employee liability information to the incoming employer, the latter can apply to the Tribunal for compensation which will be assessed with regard to the losses suffered with a minimum award of 500 per employee. A failure to comply with TUPE could therefore expose employers to claims large enough to undermine the entire transaction.

19 5. What protection is there from the effects of TUPE? It is not possible to contract out of TUPE; nor is it possible to prevent TUPE from applying. Because the incoming employer is always liable for any pre existing claims with the old employer, any claims from employees will always be made to the former. The incoming employer should always consider taking out contractual indemnities with the old employer to cover themselves in the event of any claim and specialist advice should be sought

20 Further support Preparing and transferring services in the public and non-profit sectors (CIPD report with useful TUPE information and guidance) TUPE: Transferring projects to and from your organisations (NCVO factsheet) > Bristol City Council s Enabling Commissioning Framework > TUPE guidance in your handouts ProHelp is a national network of over 400 professional firms committed to making a difference in their local community by providing free advice and professional support. > Law Society search for employment solicitors >