1. Questions relating to whether a transfer of undertaking will take place

People Service Leaving the Department and Pensions Staff Transfers TUPE Out Document Title Frequently Asked Questions (FAQs) Brief for Line Managers and United Kingdom Based Civilian (UKBC) Employees Owner British Forces Germany Publication Date 29 June 2012 Version Number Version 1.0 Purpose This document provides a Frequently Asked Questions (FAQs) brief for managers and employees and can be used as part a communication plan. The FAQs will be expanded as more information becomes available and if additional questions are raised. Disclaimer The information contained in this document is not intended to be binding upon the MoD. A letter to employees (the Transfer Information Letter) will be sent out in due course, and this letter will set out the MoD s official position in relation to the transfer. 1. Questions relating to whether a transfer of undertaking will take place 1.1 What is TUPE? The Transfer of Undertaking (Protection of Employment) Regulations (TUPE) 2006 (as amended) are the latest UK legislation that implements European Community Acquired Rights Directive (77/187/EEC) (as amended). TUPE provides employees with legally enforceable rights that primarily are about protecting employees and their current terms and conditions of employment when there is a relevant transfer as defined by in the Regulations. 1.2 When does TUPE apply? When there is a relevant transfer as defined by in the TUPE Regulations. A relevant transfer can be a transfer of an undertaking or a service provision change. Some examples of transfers are: 1.3 Service provision change When an activity currently done by MOD in-house is outsourced to a contractor. When a contract for an activity that is currently performed by one contractor is re-competed and is won by another contractor, When an activity is being performed by a contractor, but MOD makes a decision to undertake the activity in-house, (in MOD). For example, an Inward TUPE Transfer can occur when: a contractor defaults on the contract or MOD takes a strategic or value for money based decision to undertake the activity in-house. Note that a decision that an activity will, in the future be undertaken by Service personnel does not stop the application of TUPE and the consequential inward transfer of civilian staff. Note also, if a contract let for a specific period of time comes to an end, unless the activity is to stop (i.e. there is no longer a requirement for anyone to undertake the activity), then a transfer of staff is likely to happen. 1.4 Transfer of an Undertaking 1 of 19

Where all or part of a sole trader's business or partnership is sold or otherwise transferred. Where a company, or part of it, is bought or acquired by another, provided this is done by - the second company buying or acquiring the assets and then running the business and not acquiring the shares only. Where two companies cease to exist and combine to form a third. Transfer of a function from one part of the public sector to another, where there is a change of employer, (for example, at transfer between the MOD and a National Health Service Trust). The Regulations need to be considered regardless of the number of employees that are involved in doing the activity that is to transfer. 1.5 When does TUPE not have to be considered? The following are not relevant transfers Transfers by share take-over because, when a company's shares are sold to new shareholders, there is no transfer of the business - the same company continues to be the employer. Transfers of assets only (for example, the sale of equipment alone would not be covered, but the sale of a going concern including equipment would be covered). The contract is to provide goods only and does not contain any service element. Reorganisation and transfers between central government departments and agencies (i.e. within the Civil Service) as there is no change of employer. 1.6 Who decides if TUPE applies? In outsourcing projects, in line with Government policy, MOD will give a view on the application of TUPE in the contracts information issued to companies competing for the contract. Unless there are exceptional, circumstances this will normally be that TUPE should apply. Bidders may agree with the MOD s view or offer an alternative view that takes account of the way they propose to deliver the services required. As the contracting authority, MOD may accept a bidder s proposal that would mean that TUPE did not apply, but there would need to be a robust case to justify that the delivery solution offered better value for money than any other options when all costs had been taken in to account. The application of TUPE is a matter of law, and challenges can be brought where it has been applied by individuals in an Employment Tribunal and pursued (if allowed) through the legal system to the House of Lords and/or the European Courts. 1.7 What protection does TUPE provide? TUPE gives employment rights to all employees affected by the transfer. It also places a number of obligations on the current and new employer. These include: The transfer of all employees (i.e. the new employer cannot pick and choose which employees to take) who are considered to be part of the organised grouping of employees that has as its principal purpose the carrying out of the work (whether central or ancillary) it is proposed should transfer to a new employer. (An employee can be considered as assigned when they do not work exclusively on the transferring activities). Transfer of contracts of employment as they are immediately before the transfer. Take over by the new employer of all rights and obligations arising from those contracts of employment, except criminal liabilities and rights and obligations relating to provisions 2 of 19

about benefits for old age, invalidity or survivors in employees' current occupational pension schemes. Take over by the new employer of any collective agreements made on behalf of the employees and in force immediately before the transfer. Limited opportunity for the current or new employer to vary, with the agreement of the employees concerned or the Trade Unions on their behalf, the terms and conditions of employment but only where there are changes in the workforce for economic, technical or organisational reasons to justify doing so. The ability to make changes does not extend to permitting full harmonisation of transferring employment terms with those other workers. The new employer cannot unilaterally worsen the transferred terms and conditions of employment of any transferred employee. There are requirements on old and new employers to inform and as necessary consult representatives of the employees. Old and new employers cannot fairly dismiss an employee because of the transfer or a reason connected with it, unless the reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce. If there is no such reason, the dismissal will be unfair. If there is such a reason, and it is the cause of the dismissal, the dismissal will be fair provided that the employers act reasonably, for example by following agreed redundancy procedures. 2. Questions relating who will be directly affected by the outsourcing (in-scope) 2.1 How will it be decided who transfers? The MOD has undertaken a Staff Scoping exercise to determine which positions, and therefore by association the employee currently in that position, are either in-scope to transfer or will be affected in someway by the transfer. The basis for determining "scope" is the nature and detail of the work transferring from the current employer to the bidder and whether that transferring work is your principal purpose, i.e. is the work that you spend all or most of your time doing. 2.2 When will a decision be made regarding transfer? Following the scoping exercise the MOD has decided that all UKBC clinical posts and a small number of administrative posts directly supporting the delivery of medical services are in scope for transfer. 2.3 When will we know if a transfer will take place? This will be known at Contract Award envisaged for September 2012. 2.4 What if I resign prior to the transfer? Then, as you will not be in employment with the "in-scope" group at the point of transfer, it follows that you will not transfer out to the new employer. 2.5 Am I entitled to redundancy as an alternative to transferring? No. TUPE is not a redundancy situation. If you are deemed as 'in-scope' of, the entity transferring to the new employer, then our expectation is that you will transfer under TUPE with your current employment terms & conditions protected. 2.6 I will be on maternity leave when the transfer takes place, do I transfer? 3 of 19

Normally a woman is entitled to return to her previous post on exactly the same terms and conditions under which she had previously been working if she returns at the end of 26 weeks paid leave. Beyond that she will normally be employed in the same grade and location as before with the same conditioned hours and in any event should be treated for posting and transfer purposes no less favourably than if she had not been absent. If the post that you are in immediately prior to going on maternity leave is amongst those that transfer, then you will transfer to the new employer while on maternity leave and you will return to the post that has transferred. While on maternity leave you will be fully notified of a project s progress and must receive all information that is made available to other employees and be invited to attend any briefings provided. 3. Questions relating to the provision of information to the Contractor 3.1 What information does MOD give to bidders during the procurement process about the assigned employees? The following general information will be provided: The total number of individual employees that currently undertake the work covered by the requirements of the tender that MOD has identified may potentially be transferred. The total number of posts or proportion of posts (military and civilian) expressed as a fulltime equivalent value, which currently undertake the work covered by the requirements of the tender. Preceding 12 months total pay costs - Pay, employee/employer ERNIC and Overtime. Redundancy liability. Additional information about factors influencing staffing levels and costs. (For example where there is a high level of Territorial Army membership amongst the transferring employees and therefore an increased requirement for special paid or unpaid leave). This information may be broken down, for example, to show different branches in an establishment or functions, if this helps the information to be understood in comparison to requirements of tender or other information provided for the tender. The following information is provided about the employees that may transfer. This information will not identify an individual employee by name or other unique personal identifier either directly or indirectly. Where it is broken down, for example, to show different branches in an establishment or functions care is taken so that an individual is not inadvertently identifiable. Age in years (not date of birth). Employment Status (i.e. Fixed Term, Casual, Permanent). Length of current period of continuous employment (in years, months). Weekly conditioned hours of attendance (gross). Standard Annual Leave Entitlement (not the in year leave total that may contain carry over or deficit from the previous leave year). Pension Scheme Membership (For example: PCSPS-Classic, Premium, Partnership, Nuvos or NHSPS, TSS). Pension and Redundancy Liability information. Annual Salary. Details of any regular overtime commitments (These may be weekly, monthly or annual commitments for which employees may receive an overtime payment). Details of attendance patterns that attract enhanced rates of pay or allowances (i.e. shift or rostered attendance). Regular and recurring allowances. 4 of 19

Outstanding financial claims arising from employment (i.e. season ticket loans, transfer grants noting that these will only give an indication of the type and value of loan balances and that these will change during the bid period. Bidders are also given access to reference documents, notices, handbooks, instructions, or electronic media that contain information about the current employment terms of MOD employees. 3.2 What information about me will be given to the new employer before I transfer? When TUPE applies, MOD will provide the information in the table below for each transferring employee following the award of the contract. The information is required by the new employer to transfer the individual properly and to continue to apply correctly the transferred employment terms. The transfer of information can be made within the provisions of the Data Protection Act 1998, without the need for the specific agreement of the individual concerned. Personal, Employment and Career Performance Appraisal Superannuation and Pay Medical Disciplinary Restoring Efficiency and Employee s full name Date of birth Home address Security Vetting Clearance Job title Work location Conditioned hours of work Employment Status The current year s Performance & Development Report (PDR) and Personal Training Plan (PTP) (The employee that is transferring will hold these) Maternity leave or other longterm leave of absence Annual salary and rates of pay band/grade Shifts, unsociable hours or other premium rates of pay Overtime history for the preceding 12-month period Sickness and absence records for the immediately preceding fouryear period Details of any active restoring efficiency case for health purposes Details of any active restoring efficiency case for reasons of performance Details of any active restoring efficiency case for reasons of attendance Details of any active disciplinary cases where corrective action is on going Details of training and operating licensing required for Statutory and Health and Safety reasons Details of training or sponsorship commitments Standard Annual leave entitlement and current leave year entitlement and record Allowances and bonuses for the preceding 12- month period Details of outstanding loan, advances on salary or debts Bank/building society account details for payroll purposes Tax Code Annual leave Cumulative pay 5 of 19

reckonable service date Details of grievance proceedings where the outcome may have an effect or require action by the new employer. Information of any active legal proceedings between employees and MOD Issue of Uniform/Protective Clothing Working Time Directive opt-out forms Date from which the latest period of continuous employment began. for tax and pension purposes Cumulative tax paid National Insurance Number National Insurance contribution rate Other payments or deductions being made for statutory reasons Any other voluntary deductions from pay Civil Service Pension Scheme Membership (Opt-out of Civil Service Pension Scheme, Classic, Classic Plus, Premium, Partnership Stakeholder defined contribution scheme) For pension purposes, the notional reckonable service date Pensionable pay history for 3 years to date of transfer Percentage of any pay currently contributed under additional 6 of 19

voluntary contribution arrangements Percentage of pay currently contributed under any added years arrangements 3.3 What happens if my personal information has been passed to the new employer but I do not transfer? If you are reassigned prior to the transfer any information about you, which had been passed to the new employer, will be returned to MOD, or the new employer will be required to certify that the information has been deleted from any of their recording systems. 3.4 What happens to my MOD Personal File; and will the new employer be allowed access to it? Personal Files are kept by the MOD; they are not given to the new employer. The Department's general rules on disclosure will be applied and, other than in the course of a legal action where the contents of the file may be relevant to the issues to be determined in the case or a Court orders its disclosure, nothing will be released without the written consent of the individual concerned. 4. Questions relating to the provisions in UK laws and MOD rules in a transfer of undertaking situation and its protection 4.1 Transfer Information Letter (TIL) The previous employer (transferor) or the new owner (transferee) must notify employees affected by a transfer in text form prior to transfer as follows: of the date or planned date of transfer, of the reason for the transfer, of the legal, economic and social consequences of the transfer for the employees, and of measures that are being considered with regard to employees. The date of issue of the TIL will not be known until after Contract Award as the letter will be a joint letter between MOD and the Contractor and includes information that only the selected contractor can provide. It is intended to issue the TIL as soon as practicable after contract award but no later than one month before the transfer date. 4.2 How does MOD ensure that the new employer observes their obligations under TUPE? The new employer is responsible for ensuring they comply fully with their legal obligations under TUPE. Additionally, the following elements form part of the procurement and delivery phases of contracts where MOD employees are transferred to provide an assurance that their interests are cared for. 7 of 19

During the procurement, process bidders must satisfy MOD that their views on the application of TUPE are soundly based. MOD will receive information explaining how the new employer will apply TUPE to the employment terms and conditions of the transferring employees and to Trades Union (TU) recognition and negotiating rights. The information will also explain how future methods of operation may affect employment terms and numbers of employees required. These are described in TUPE as measures. Prior to the actual transfer, in accordance with TUPE, MOD will provide information to the MOD TU representing the transferring employees about the measures the new employer intends to take. Once the transfer has taken place, the new employer is legally responsible for meeting all of the requirements that TUPE place on them and the Government policies that are applied through the terms of the contract issued by MOD. The TUs acknowledge that the new employer is responsible for operating the employment terms and conditions that transfer under TUPE. Negotiations about future terms and conditions of employment are the responsibility of the new employer. The Code of Practice for Staff Transfer in MOD Contracts requires that as part of the normal monitoring regime of the contract, the new employer must provide MOD contract monitoring teams with the following information: Proposed, agreed or imposed changes to terms and conditions - of service in respect of employees transferred to the contractor under TUPE. Disputes relating to TUPE compliance that are regarded as unresolved by a recognised Trades Union. Any court action or tribunal proceedings relating to TUPE - compliance. Completed court action or tribunal proceedings relating to TUPE compliance. Any out of court" settlements relating to TUPE compliance. The information provided will be reviewed by the MOD contract monitoring team. If the report contains issues that may directly or indirectly affect delivery of the services required under the contract the MOD contract-monitoring team may wish to consider with the contractor how the services will be maintained, while respecting the employer/employee relationship that cannot be interfered with. 4.3 Could the new employer in some way get around or avoid their obligations under TUPE? TUPE is just one regulation in the significant number of Acts of Parliament and Regulations that relate to how an employer can employ individuals. Additionally, cases brought before a court or tribunal may create case law (i.e. a legal ruling on how a piece of law should be interpreted or should be applied). If the new employer wants to make changes, for example, in the composition of the transferred workforce, employment terms, or number employed, normally these can only be properly achieved by adherence to the procedures and requirements of the law. Attempting to avoid or get-round TUPE would probably result in the new employer not properly complying with the law. 4.4 Are there any Government policies that are relevant to a TUPE transfer? The main policies relating to the transfers of MOD employees are contained in the following documents: Staff Transfers in the Public Sector Statement of Practice (Cabinet Office January 2000) Fair Deals for Staff Pensions (H.M. Treasury June 1999 and June 2004) 8 of 19

Code of Practice on Workforce Matters (Cabinet Office March 2005) Good Practice Guide 2008 4.5 Does TUPE apply to members of HM Forces working in the undertaking? No, it does not apply to regular members of HM Forces or to reservists serving full time with regulars for a predetermined period in a specific posting. For some contracts, MOD may allocate HM Forces posts to work with a contractor as an integral part of the delivery of the service requirements. 4.6 Does TUPE apply to an employee who as part of their employment terms has a Sponsored Reserve commitment to serve in HM Forces? Yes. Due to the nature of the work undertaken there are employers, including MOD, who have a proportion of employees with a Sponsored Reserve commitment as part of their employment terms. The inclusion of these terms enable the employees to undertake the work that they do in a civilian capacity and also to be called out and undertake the same work in a deployed or training state as part of a formed element of HM Forces. If in their capacity as an employee (not as a sponsored reservist) the work which they are assigned to transfers, they will transfer with the work the new employer may take on only the work performed by employees in their civilian capacity or in the combined civilian/sponsored reserve capacity. 5. Questions relating to the consequences of a transfer relating to Rights and Obligations under Individual Employment Contracts 5.1 Where can I find out what my current employment terms and conditions are? MOD employs individuals in a wide range of grades, professions and specialists. In general, the employment terms and conditions of MOD employees can be found on the MOD Intranet `People Portal. 5.2 What happens to my terms and conditions of employment when I transfer? The new employer assumes all rights and obligations arising from those contracts of employment, except criminal liabilities and rights and obligations relating to provisions about benefits for old age, invalidity or survivors in employees' current occupational pension scheme and takes over any collective agreements made on behalf of the employees and in force immediately before the transfer. Essentially this means that current employment terms and conditions are retained. However, a future employer will need to identify any changes (referred to as measures ) that they consider they can justify a need to make in respect of transferring employment terms to be able to operate them. Also, although terms will transfer it does not mean that they will be delivered in the same way. For example, the MOD will not agree to compassionate travel on MOD facilities or a MOD representative being available to host an individual at the airport or see them through in a timely manner etc. 5.3 Can the new employer change my employment terms? TUPE provides some freedom for the new employer to agree with an employee to vary an employment contract after a transfer. The new employer and the employee can agree to vary an employment contract where the sole or principal reason is: 9 of 19

or Unconnected with the transfer; Is connected with the transfer in and there is an economic, technical or organisational reason entailing changes in the workforce. Where a new employer proposes changes to the employment terms generally, the changes will need to be made through consultation and negotiation with the employees and, where applicable, their representatives (e.g. the recognised TU). TUPE does not include a set period after the transfer date during which the new employer cannot propose new employment terms. TUPE does prevent a new employer from imposing changes that are significant and/or detrimental to the transferred employees current employment terms where the only reason for change is the transfer itself. Where the transferred employment terms include the ability for the employer to alter, amend or withdraw them, these arrangements are available to the new employer to use, in exactly the same way that MOD might have used them before the transfer. Finally, a new employer will amend employment terms when obliged by a change in the law. 5.4 I am not a permanent employee - what is my position? Will I transfer? Employees of a third party or on a temporary contract may not have the automatic right to transfer. We will seek an early opportunity to understand your role and agree the way forward. If any temporary arrangement is to be ceased then this will be in accordance with the terms of your current contract with the current contractor and implemented by them. 5.5 On what salary will I transfer out of the MOD? You will transfer on your existing salary as at the day prior to the date of transfer. 5.6 Can I negotiate a higher salary? This would be a matter for an individual and the contractor. 5.7 What annual leave will I be entitled to? Your new employer will honour your existing annual leave entitlement, including any increases to the leave entitlement you are due to the year s service. The terms for granting of annual leave also continue to apply as they do in MOD. Normally the new employer will honour holiday arrangements that have been booked before the transfer takes place, however if on transfer your Line Manager changes you need to tell them about the holiday arrangements already booked and confirm that leave can be taken. 5.8 Will existing attendance patterns, such as flexible working hours or shift rosters, be maintained? Where attendance patterns like flexible working hours or shift rosters are the subject of collective agreements these will transfer under TUPE. Individual attendance arrangements such as home working may be reviewed by a new employer, in the same way that MOD line managers will review such arrangements to confirm their continued acceptability. Informal or ad hoc arrangements, for example where a manager has allowed an employee to arrive late or leave early with compensating adjustments to meal breaks for a few weeks, cannot necessarily be considered as transferable employment terms. Where adjustments have been formally made as temporary assistance to an employee, for example returning to work after sick absence, these temporary adjustments should not be affected by the transfer, in the same way that a MOD line manager would review the adjustment, so will a new employer. 10 of 19

5.9 Special adjustments have been made to my workspace because of my disability, will the new employer be told about these? Due to the Data Protection Act 1988, personal information that it is considered may assist the contractor to more fully understand the circumstances that affect an individual s employment can only be provided with the agreement of the individual employee concerned. Where specialist equipment has been provided, MOD will normally arrange for this to be transferred or loaned to the contractor for use by the transferring employee. 5.10 Will there be annual pay awards and performance bonus awards? The current collective agreements or imposed awards that MOD have in place for increases in pay and bonus awards will transfer. The new employer will need to continue to operate these arrangements until their operative date ends, or a new or revised system has been agreed by the employees and their representatives. Any revised arrangements made by the new employer do not have to be comparable to or reflect any future arrangements that MOD may make for its own employees. 5.11 I receive allowances associated with a PPI move (such as Excess Fares Allowance, Additional Housing Cost Allowance, Assisted Mortgage Scheme). Will I continue to receive these allowances following the transfer? Allowances will continue to be paid in accordance with the terms and for the period of the current arrangement by the new employer while you remain in employment with them. 5.12 I have deductions from pay for membership subscriptions to clubs and organisations; will these continue with the new employer? MOD will provide information to the new employer about the voluntary deductions made from your pay. It is possible that following your transfer the new employer may advise that they are unable to continue with all or some of the deductions from pay. Most clubs or organisations provide various ways to pay subscriptions and you may need to use one of the alternatives available to you. 5.13 Can I continue to be a member of organisations like Benenden Healthcare, Civil Service Sports Council and Civil Service Benevolent Fund? Generally, the rules of the national organisations will allow for continuing membership for transferring employees in the same way that they will give membership to individuals that have been civil servants at sometime during their employment history. In some instances, new employers may choose not to participate in arrangements for subscriptions for these organisations to be deducted from a transferred employee s salary. In this situation, the new employer must notify the transferred employee. However, all of the organisations offer individuals several methods to pay subscriptions other than from voluntary payroll deduction so continued membership should be possible. 5.14 Can I continue to participate in the MOD Lottery? Yes. 5.15 As a MOD employee, I currently use crèche facilities and, for example, can use the Forces Discount Brochure (FDB). Do these transfer under TUPE? The ability to apply for a place in a MOD crèche or to obtain discounts on products and services contained in the FDB are not employment terms and do not therefore transfer under TUPE. They are social benefits that are derived from being employed by MOD. In respect of using crèche 11 of 19

facilities their use is governed by the MOD arrangements setting them up, which may limit their use to MOD employees only. Where transferring employees currently have children attending a MOD crèche transitional arrangements that need to be made are a matter for local discussion. In respect of the FDB access to this benefit ends on transfer however; the new employer may have similar or alterative benefits that it makes available to its employees. 5.16 I have had salary advances/loans where the repayments are recovered each month directly from my salary. Do I have to refund all outstanding monies before I transfer? No. The new employer will continue to recover advances/debts in accordance with the terms and at the rate agreed between MOD and the individual. MOD will make contractual arrangements with the new employer, who will either buy out the total indebtedness of all the transferring employees at the point of transfer (and subsequently keep the sums collected from transferred employees), or make periodic payments to MOD as monies are collected from transferred employees, until all debts are cleared. 5.17 Can I continue to send my children to SCE schools? Yes. This entitlement will transfer across as part of your terms and conditions. 5.18 Will I retain my entitlement to undertake an annual trip to the UK with my family at public expense? Yes. This entitlement will transfer across as part of your current terms and conditions. 5.19 Will I retain my entitlement to the Compassionate Travel facility? Yes. This entitlement, or something similar, will transfer across as part of your current terms and conditions but the contractor will be required to put a process in place; it will not necessarily mean the use of MOD facilities. 5.20 Will ISA and Child Trust Fund status be affected? This will depend on your liability for UK income tax and will be a matter for you and the contractor. 5.21 Will I be able to use tax free facilities? As a recognised contractor under the Status of Forces Agreement, you will be able to use tax free facilities. 5.22 Will there still be an entitlement to boarding school allowance? Yes. If you are currently in receipt of this allowance then this entitlement will transfer across as part of your current terms and conditions. 5.23 Will we still get COLA? Yes. This entitlement will transfer across as part of your current terms and conditions but it will be for the contractor to determine the rate taking into account all relevant factors. They may wish to utilise a different method of calculation or provider to that used by MOD. 5.24 Will COLA rates change? Will these be protected? As with MOD, COLA may go up or down and so the rate will not be protected. However the entitlement to receive COLA will transfer across as part of your current terms and conditions. 12 of 19

5.25 Will RRA rates change? Will these be protected? This entitlement will transfer across as part of your current terms and conditions but any collective agreements affecting this which are put in place prior to transfer, will also transfer. 5.26 Will course fees be honoured? Yes. This entitlement will transfer across as part of your current terms and conditions if MOD has already committed to the cost. 5.27 Will housing entitlements remain the same? Yes. This entitlement will transfer across as part of your current terms and conditions but it will not necessarily mean the utilisation of the MOD housing stock. As long as the contractor provides the housing, they will have complied with their obligations. 5.28 I currently pay UK Income Tax; will I have to pay UK Income Tax when I transfer to the Contractor? Your liability to UK income tax will be a matter for you and HMRC. 5.29 I currently pay UK National Insurance Contributions (NIC); will I continue to pay NIC? This will be a matter for you and the contractor. This information will be made available by the winning contractor after contract award in September 12. However, if your earnings require you to pay NIC then it is expected that this will continue when you transfer to the contractor. 6. Questions relating to the consequences regarding employee representations 6.1 I am not a member of a TU. Will I be able to conduct consultations with the Department on my own behalf? No. The TU that the Department has recognised to cover various employee grades will be the focal points for consultation. Information provided to the Trade Unions about the transfer will be available locally for all employees affected by the transfer to see. Any employee could make a representation to the TU; it would be for the TU to decide on the action they took on those comments. 6.2 Does the new employer have to give recognition and negotiating rights to MOD recognised Trade Unions? TU recognition and negotiating rights can transfer under TUPE. The general legal position is that the new employer will continue to recognise the TU that represent the transferred employees if the undertaking (in the case of a business transfer) or the area of work (in a service provision change situation) maintains a distinct identity from other areas of the new employer's business. The recognition rights of the Trade Unions will be to the same extent that they were with the former employer. If the separate identity is not kept, the previous Trade Union recognition may lapse and it will then be up to the union and the employer to renegotiate recognition. 7. Question relating to the consequences regarding the pension scheme 7.1 Pensions 13 of 19

Note: Reference is made to the Principal Civil Service Pension Scheme (PCSPS). Some MOD employees are members of other public sector pension schemes, for example the National Health Service Pension Scheme. The arrangements described for the PCSPS members will normally apply to members of the other public sector schemes. 7.2 Does the new employer have to provide a pension? Provisions in the Pensions Act 2004 and the supporting Transfer of Employment (Pension Protection) Regulations SI 2005/649 which came into effect from the 6th April 2005 ensures that transferred employees who had access to occupational pension provision with an employer contribution prior to a transfer must be offered employer pension provision following the transfer. The Pensions Act prescribes a level of protection that must be given to: or Active members of the transferor s occupational pension scheme. Eligible to be members of a transferor s occupational pension scheme. In a waiting period before becoming eligible to be a member of a transferor Employer s occupational pension scheme. The new employer can offer transferred employees, as a condition of their contract of employment, membership of either a defined benefit pension scheme that meets a prescribed standard, a defined contribution pension scheme, or a stakeholder pension scheme. Where the scheme offered is a defined contribution or stakeholder arrangement, the new employer must match the employee s contributions up to a prescribed level, set at 6%. 7.3 The pension schemes described in the Pension Act are not the same as the PCSPS. I thought any new scheme offered by the new employer had to be comparable? The long standing policy position of Governments has been to require new employers to provide transferring Civil Servants and other public sector workers with broadly comparable pension arrangements. The latest Government policy documents on pension provision are Fair Deals for Staff s Pensions. 7.4 How will I know that the new scheme is broadly comparable to the PCSPS? The pension schemes that bidders propose to offer transferring employees will be subjected to rigorous scrutiny and comparison by a professionally qualified actuary working for the Government Actuary's Department (GAD). 7.5 How is the proposed pension s comparability assessed? The proposed pension schemes need not be identical to the PCSPS. To be broadly comparable the scheme must satisfy the condition that there would be no identifiable employees who would suffer material detriment overall in terms of their future accrual of pension benefits under that scheme. Amongst many aspects, the Actuary will consider: The value of the scheme The value to different types of individual Level of Contributions The range of benefits that the new scheme provides The retirement age and effect on benefits payable 14 of 19

Membership who is eligible to join The administration of the scheme The type of pension scheme The adequacy of contributions (Note: The Government Actuary s Department statement of practice for the Assessment of broad comparability of pension rights can be found in the Staff Transfers in the Public Sector Statement of Practice - Cabinet Office January 2000) 7.6 Do I have to join the new employer s pension scheme? No. However, a condition of the GAD certification is that membership of the new employer s scheme is automatic from the day of transfer. Transferring employees do have the option to opt out of the new employer s scheme by notifying them. Employees that previously had opted out of the PCSPS are also eligible to join the new employer s scheme. 7.7 What can I do with the pension I have already accrued under the PCSPS? Staff participating in the Classic and Premium sections of the PCSPS will have the choice of: Transferring the value of the accrued benefits into the pension scheme run by the new employer, (provided that at the time of the transfer you have not reached Pensionable Age which for PCSPS is currently age 60). The option to make a transfer under the Bulk Transfer Terms is normally only available for a set period of time immediately following the transfer. Preserving the accrued benefits in the PCSPS. The preserved pension will be assessed using final salary information at the point of the TUPE transfer and up rated by price inflation until it comes in to payment at Pensionable Age for their section of the PCSPS. (This option is only available to employees who have completed 2 or more year s service). Employees that are in the Classic and Premium sections of the PCSPS and over Pensionable Age but who have a Normal Retirement Age greater than age 60, (normally age 65) at the time of the transfer, will not have the option to transfer accrued benefits to the new employer s pension scheme. At the date of transfer, their PCSPS pension will come in to immediate payment, however receipt of this does not in anyway prevent the employee to continue to work for, and receive a full (unabated) salary from the new employer. Depending on the rules of the new employer s pension scheme, membership of a pension scheme should be possible. Staff in Nuvos section of the PCSPS will have the choice of transferring the cash value of the accrued benefits into the pension scheme run by the new employer, (provided that at the time of the transfer you have not reached Pensionable Age which for this section of the PCSPS is currently age 65). (The option is only available to employees who have completed 2 or more year s service). Up until the transfer, you continue to have the option opting out of the PCSPS and if you wish transferring the value of the accrued benefits into a personal pension scheme that you chose from the many commercial providers of pensions. Under this option the transfer of accrued benefits will only be on a cash value basis, (i.e. they may not buy the same value of benefits in the new scheme). 7.8 What are Bulk Transfer Terms? To transfer the value of accrued benefits from one pension scheme to another involves a payment being made from the current pension scheme to the new pension scheme. Current pension 15 of 19

regulations provide a basis for calculating a minimum transfer value where the accrued pension benefits in one pension scheme are transferred to another. These arrangements may not necessarily result in identical credits in the new employer s scheme, i.e. 1 year reckonable service in the current scheme may be worth less that 1 year in the new scheme. A bulk transfer agreement can be made between two pension schemes, that changes the basis for calculating the transfer value and typically will involve the current pension scheme making a higher payment to secure specific credits in the new scheme, i.e. 1 year s reckonable in the current scheme may be worth 1 year or very near 1 year in the new scheme. These special arrangements are referred to as bulk transfer terms. The option to transfer accrued pension benefits under these better terms will be available to transferring employees only for a short period following the transfer date. 7.9 Will MOD provide any advice on what I should do in respect of my PCSPS pension? MOD cannot provide employees individual advice on what to do with their PCSPS pension. However, the Project Team will normally arrange for a presentation by either the Government Actuary s Department or the Scheme Actuary for the PCSPS when the options available to transferring employees will be explained in detail. 8. Questions relating to the redundancies regarding a transfer 8.1 Can I be made redundant as a result of a transfer? Under TUPE employees cannot be fairly dismissed if the transfer is the principal reason for dismissal. However, under TUPE employees can be fairly dismissed for one or more of the following reasons that require a change in the workforce: Economic reasons for example, business has reduced. Technical reasons for example, new working methods or technology is introduced which require fewer employees. Organisational reasons for example, a reorganisation takes out a layer of management, or the way services are delivered or a change in the location where the service is delivered from. These have to be demonstrably essential and, if tested at an Employment Tribunal, an employer would have to show that redundancies were necessary and were applied reasonably. 8.2 What happens if the new employer is proposing changes in the workforce for economic, technical or organisation reasons? MOD will not make employees redundant in advance of the TUPE transfer, where the new employer proposals include this possible action. Following the transfer, the new employer may take redundancy action under the procedures that will have transferred to them (or their replication of the arrangements). Such actions may include pre-compulsory redundancy measures of identifying alternative employment opportunities elsewhere in the company and calling for volunteers. 8.3 Would redundancy compensation remain the same as that provided by the Civil Service Compensation Scheme (CSCS)? TUPE has the effect of protecting the value of redundancy benefits that would be payable to transferred employees under the CSCS. Redundancy benefits for those who qualify are determined by length of service, age and the terms applied to the actual redundancy action. 16 of 19

8.4 If the new employer cuts posts will they have to have Redeployment Pool arrangements like MOD? No. The Redeployment Pool arrangements are internal management arrangement in MOD. A new employer will have their own arrangements to manage surplus employees, ahead of any redundancy action. 9. Questions relating to the right to object and its consequences 9.1 What if I refuse to transfer? You need to carefully consider the implications of taking this decision. Whilst it is acknowledged this position is not of your choosing, you need to think in terms of your best long term interests. You can refuse to work for the new employer. You must let the MOD know that you object to the transfer. You'll be regarded as having resigned and will have no right to claim unfair dismissal or to a redundancy payment. 9.2 I am in a post identified to transfer under TUPE. I don t want to transfer, can I be placed in the Redeployment Pool. No. However, MOD has issued guidance regarding access to the redeployment pool for staff likely to be made redundant for ETO reasons following transfer to new employer on TUPE terms. Where the criteria are met, staff will have access to the RDP to assist them find an alternative job in MOD but they remain in-scope to transfer on vesting day if an alternative job as not been found. 10. Miscellaneous Questions 10.1 Can I continue to apply for internal (and external) advertised Job vacancies before the TUPE transfer? Employees may apply for both internal (if eligible, staff who are specially recruited are ineligible to apply for MOD posts in the UK) and external Job vacancies up to the date of transfer. However, only where the individual has been interviewed, offered and accepted the advertised prior to the transfer date will they not transfer. All outstanding applications for internally advertised vacancies are cancelled on the date of transfer, (external applications will continue). 10.2 Will I be able to transfer jobs with the Contractor? This would be a matter for an individual and the contractor 10.3 I am specially recruited for overseas service. Will I be able to apply for MOD posts in the UK? No. As someone specially recruited for overseas service, you are not eligible to apply for MOD posts in the UK. 10.4 Can I apply for vacancies advertised in MOD after I transfer to a contractor? You cannot apply for vacancies that are advertised internally in MOD. However, if MOD vacancies are advertised externally then you can apply but you would clearly, need to give notice of termination to your current employer. 10.5 Will I be assessed by the contractor? 17 of 19

This would be a matter for an individual and the contractor. 10.6 Does the new employer have to give their existing employees the same employment terms and conditions than those of the transferring MOD employees? No. 10.7 What happens if the new employer offers me the option of a new employment contract with different terms to those on which I transferred? There may be a number of reasons why a new employer may take this action. The most likely situation will be if you successfully apply for a different job, possibly a promotion in other parts of the employers business. An employment contract is an agreement between 2 parties and can be altered or replaced if both parties agree. It is possible that a transferred employee may be able to rely on their former TUPE employment terms if the new employment terms offered in part, or as a whole, are found to be detrimental. Determining this may only be as a result of action at an Employment Tribunal. Either by individual agreement or as a result of collective negotiations by the TUs, changes in the employment terms of transferred employees may occur over time after the point of transfer. Agreeing to change a single employment term or condition does not affect others (or the TUPE protection attached to them). If the employees are laid off by the company in liquidation then redundancy compensation above statutory levels (which is the responsibility of the DTI s Insolvency Service) would be a matter between the individual concerned and a Liquidator appointed to manage the insolvency of the company. 10.8 What happens if the new employer s existing employees are paid more and have better employment terms and conditions than those of the transferring MOD employees? Nothing, unless following the transfer the new employer wishes to harmonise the employment terms across their workforce. If this is the case, any changes would need to be agreed by the employees and their representatives. 10.9 Do the employment terms of new joiners recruited by the new employer have to match those of the transferred MOD employees? The Code of Practice for Workforce Matters requires that new joiners employed on the contracted work, working alongside TUPE transferred employees, get employment terms that are, overall, no less favourable that those of the transferred employees. Additionally, the new employer is required to provide a pension arrangement, details of which are given in the Code. These arrangements apply to procurements where there is a TUPE transfer of Civil Servants or in the case of the re let of contracts former Civil Servants where the procurement action commenced after 18 March 2005. The Code does not require the new employer to maintain parity between the employment terms of MOD employees and those of the transferred employees and any new joiners after the transfer. 10.10 What happens to transferred employees if the contract fails? The failure of a contract or contractor is a significant event and, depending on the reasons for the failure and how MOD decides the services should be delivered, in the short or long-term will affect what happens to the employees that the contractor has assigned to the work or services being delivered. If there is a need for services to continue to be provided, then TUPE Regulations will 18 of 19

apply to any change made to the service provider, be it to MOD (as an inward transfer) or to a different contractor. 10.11 If the bidder moves a function to a different location, will staff have a choice of whether or not they go? It will depend upon the employment terms of the transferred staff. 10.12 What happens if the new employer goes into liquidation during the term of the contract? If MOD still requires the work or services to be delivered MOD may decide to either undertake the work itself, or to place it with a different contractor. In this situation, TUPE may apply. If the company is taken over by another, there are specific regulations in TUPE that refer to the treatment of employees of a company in liquidation. 10.13 Would my employment terms be protected if I receive and accept an unsolicited job offer from a bidder? There are a number of points to consider: Timing If the job commences before the date of the TUPE transfer then to take up that new job you will need to have resigned from MOD. If the job will commence after the date of transfer, then provided you remain amongst those assigned to the Undertaking you will transfer under TUPE. Following the transfer, as an employee of the new employer, changes of this sort are a matter between you and your employer. Employment terms Only where you transfer under TUPE would the legal protection given by that legislation apply. If you leave MOD before the transfer date to take up a new job then the employment terms for the new job are a matter only between you and the company making the job offer. Business Rules and Acceptance of Appointments If you have been involved with the projects or the procurement process or have had access to information that would give a new employer a commercial advantage, if you resign from MOD to take up a new job with a bidder/new employer the MOD may impose some restrictions on your involvement on MOD work for a period time. In any case, you should report any unsolicited job offers to line managers irrespective of whether you intend to act upon them or not. 11. Additional information 11.1 If you have additional questions please do not hesitate to contact the Project HC2013 Team by emailing BFGHealthSvcs-HQ-JHQ_ProjReqMngr@Mod.uk or jean.ross116@mod.uk. 11.2 As more information becomes available, following contract award, which is due to take place in September 2012, the FAQs will be updated. 19 of 19