TUPE: Frequently Asked Questions For Schools becoming an Academy 1. PURPOSE This document is for Governors, Head Teachers and staff of schools who have received the Academy Order from the Department for Education to transfer to an Academy Trust. The purpose of this guidance is to provide the key information around the process of transferring staff, when a school becomes an Academy Trust. TUPE Jargon Buster TUPE Transferor Transferee Academy Order Trust Commercial Transfer Agreement (CTA) Consultation Transfer of Undertakings (Protection of Employment) Regulations (2006) Outgoing employer. The employer who will be handing over the business or service when the transfer takes place. Incoming employer. This refers to the employer who will be taking over the business or service when the transfer takes place. The Governing Body applies (via a sponsor if appropriate) to the Department for Education to become an Academy School and/or Academy Trust. When the application is approved, the Secretary of State will issue an academy order and a trust is set up. After an academy order has been approved, the next step is to set up an Academy Trust. Once converted, Academies are run by an Academy Trust, which is a charitable company limited by guarantee. Legal agreement between a Local Authority, predecessor school Governing Body and Academy Trust. The commercial transfer agreement records information on all the staff, assets and contracts transferring from a school to an academy trust. The process by which management and employees or their representatives jointly examine and discuss issues of mutual concern. Collective consultation must be conducted with a view to reaching agreement. Employers must inform/consult with employees through "appropriate" elected representatives i.e. representatives of the recognised trade unions. The information must be given in writing by the outgoing employer and must include: the fact that the transfer is going to take place, approximately when and why. any social, legal or economic implications for the affected employees, for example a change in location or risk of redundancies. any measures (see below) that the outgoing and incoming employers expect to take in respect of their own employees, or confirmation of the fact that no measures are expected. the number of agency workers employed, the departments they are working in and the type of work they are doing if agency workers are used. 1
Measures Employer Liability Information (ELI) Any changes the outgoing or incoming employers wish to make: under TUPE these changes are known as measures. Employers must consult about any measures they are thinking about or intend taking as a result of the transfer. Measures can include change of pay date, different working patterns, different pension arrangements. Information which the outgoing employer must provide about transferring employees to the incoming employer. The following information must be provided: the identities and ages of the employees who will transfer information contained in the employment contract of those employees details of any disciplinary action taken against an employee in the last two years details of grievances raised by an employee in the last two years instances of legal action taken by employees against the outgoing employer in the last two years (any court or employment tribunal claims) information regarding any collective agreements The information must be accurate, up to date, secure and provided not less than 28 days before the transfer. Due Diligence The investigation of a business by a potential buyer to determine the costs, liabilities, benefits, and risks associated with acquiring the business. In addition to Employer Liability Information, incoming employers often carry out a more in-depth investigation of the business or contract by seeking additional information from the outgoing employer about a transfer. This is a legal process called due diligence Sponsor Some academies, (generally that are set-up to replace underperforming schools), will have a sponsor. Sponsors come from a wide range of backgrounds including: universities individuals philanthropists businesses the charitable sector Academy converters Successful state maintained schools Successful Independent schools educational foundations faith communities/bodies Sponsors are held accountable for improving the performance of 2
their schools. They do this, in part, by challenging traditional thinking on how schools are run and what they should be like for students. Single Academy Trust Multiple Academy Trust If a school becomes a single Academy Trust, the Trustees, Directors and even Governors may be the same people. However, their roles are different. For example, Governors have a particular role but some or all of the Trustees and Directors may be appointed as Governors. The Governing Body is likely to have a key input into the direction of the school. In Multiple Academy Trusts, there may be several schools under common ownership. There will be one Trust and Company overall and there is likely to be a Governing Body for each school. The Trustees and Directors are the key policy and decision makers. Depending on the structure of the Trust, the Chair of Governors of each school may be appointed as a Trustee and Director of the Trust. The Trust will be required to enter into a Funding Agreement, approved by the DfE, for each school within the Trust. Agreements are normally subject to a minimum notice period of 7 years. Umbrella Academy Trust An Umbrella Trust generally is where several schools, who have independently become Academies, are then placed under an overall Academy Trust as the umbrella. Each school though is an academy in its own right with its own Trust, company and Governing Body. Such an arrangement can help with shared governance, collaboration and procurement of services. A cluster of primary schools may form an umbrella trust as an example. The umbrella could also include the secondary school into which the primaries feed. TUPE: Frequently-asked questions Question When should I notify the Local Authority and Schools Choice that the School is considering applying to be an academy? What is the Local Authority s Responsibility in regard to the TUPE process? What is the Local Authority required to inform Trade Unions about the transfer? Answer Schools should notify the Local Authority as soon as they are considering applying to become an academy Where the Local Authority is the current employer (i.e. it is the transferor), it leads on the TUPE consultation process with both the new employer and the Trade Unions and staff affected, in partnership with the school. The fact the transfer is to take place, the date or proposed date of the transfer and the reasons for it. The legal (change of employer, contracts, statutory rights and collective 3
agreements), economic (remuneration and other benefits) and social (e.g. location) implications of the transfer to the affected employees. Whether the current employer envisages taking any action (e.g. reorganisation) in connection with the transfer which will affect employees, and if so, what action is envisaged or if it envisages that no action will be taken. Any actions in connection with the transfer, which it envisages the new employer will take in relation to any affected employees who will become employees after the transfer, or if it envisages that no actions will be taken. Provide a range of information about the transferring employees to the transferee (known as employee liability information). How long must formal consultation be? What is the penalty if the school fails to consult with staff and unions? What happens if an employee does not want to transfer to the new employer? What happens if an employee refuses to transfer? Do I have to complete an Equality Analysis (previously referred to as an Equality Impact Assessment) as part of the transfer? There is no set timescale for the purposes of TUPE transfer. However consultation must be long enough before the transfer to enable meaningful consultation to take place. Failure to consult with staff and unions could result in the current employer having to pay each affected employee a compensation award of up to 13 weeks actual pay. If any member of staff is concerned about their transfer to the new employer they should speak to either their line manager or contact their trade union representative as soon as possible and ask for a one to one discussion. An employee can refuse to work for the new employer. They must let their current or prospective employer know that they object to the transfer. They will be regarded as having resigned and will have no right to claim unfair dismissal or to a redundancy payment. Please advise HR of the date the employee objected, if notification is not provided in writing. To meet the requirements of the Equality Act 2010, public sector equality duty, completing an equality analysis will show you have given due consideration as to whether the proposed conversion to academy status has any detrimental impact on anyone with protected characteristics covered by the Act. Your HR caseworker will be able to provide further guidance on this and an example template. 4
Question If we become an academy do we have to take responsibility for teachers pensions as their employer, as opposed to the LA? Do I have to register with the Local Government Pension Scheme (LGPS)? Will any LGPS deficit transfer to the academy? Are there any other pension responsibilities I need to be aware of? Do you have any third parties working at the school and have you Answer Once the academy trust has been established it will need to be registered with the Independent Teachers Pensions Scheme by contacting 0845 6066166 or at http://www.teacherspensions.co.uk/resources/pdf/ Academies.pdf Teachers Pensions has developed a new delegation form for authorities to be given access to STU (Secure Transfer Utility) to administer the Teachers Pensions Scheme on behalf of academies. To obtain a delegation form, the academy should contact Teachers Pensions tpstu@teacherspensions.co.uk Yes, academies are clearly defined as separate employers under the pension scheme regulations. They are a scheme employer and not an admitted body. This means the academy has the same type of standing in the local government pension scheme as Suffolk County Council and as such all staff currently in the scheme will remain under the same terms and all staff eligible to join will be admitted automatically when they join the employer. The employees have the right to opt out if they do not wish to be a member. The pension fund actuary will carry out an assessment of the academy staff and provide an employer s contribution rate to be paid by the academy. This assessment will be commissioned by Suffolk County Council Pensions team but will need to be paid for by the academy. The employer s contribution rate will be calculated on the basis of the academy s staff profile and relates only to the academy. This means the rate can be higher than the rate which applied to the school prior to becoming an academy. The Suffolk pension fund, like most other local authority pension funds, is managing a deficit at the moment. The deficit in respect of pensionable service prior to conversion transfers from the local authority to the academy. The actuarial calculation of the employer contribution rate will take into account the amount needed to pay off any past service deficit and meet future accruals over a period specified by the actuary. This will be explained in detail by the actuary when the contribution assessment is made. Yes, as an Academy and a new employer you will be responsible for paying capital costs on ill health retirements which the LA previously paid on your behalf. You need to consider if those third parties e.g. catering, caretaking and cleaning staff employed 5
made any offers of employment with a start date after the transfer date? Can salaries be changed? Can the school alter teachers' pay and conditions? Will staff need new DBS checks? Will new contracts of employment need to be issued? with SCC will be transferred to the new academy. If you wish to retain the services and not have staff transfer to the academy, you need to speak to the service manager to discuss a possible contract for those services. Any offers of employment before the transfer takes place will also be protected under TUPE. Under TUPE regulations the new employer cannot change the terms and conditions of transferred employees if the sole reason for the change is the TUPE transfer. Therefore, staff will retain the same terms and conditions under which they currently work. The new employer can change terms and conditions by agreement and if there is an economic, technical or organisational (ETO) reason entailed changes in the workforce. Detailed HR advice would be needed on this area. When a school converts from a local authority maintained school to a new academy, staff are entitled to transfer under the same employment terms and conditions. Immediate changes to the staff structure and operation are not usually anticipated. However, once open, the academy trust may consult with staff and their union representatives on changes to these terms and conditions, for example to enable the academy to operate over different term times or change the length of the school day. Staff will not need a new DBS check unless they have had a break of three months or more. Staff pre 2002 should have relevant police checks in place. No, but confirmation letters will be sent to staff confirming their current terms and conditions will transfer to the new academy, before the transfer takes place. If an employee applies for another job within the new employer later on would they still retain their existing terms and conditions? Does service continue when employees transfer to a new employer? For new employees, will service with an academy count as continuous service within Local Government for the purposes of determining service for statutory redundancy rights? For new employees, will service Existing terms and conditions are protected. If an employee applies for a new role within the organisation they have transferred to the new employer who will expect them to adopt their terms and conditions. All previous service will count as continuous service when a transferring employee (protected under TUPE) moves to the new employer. New employees to the academy (not under TUPE) will have periods of employment counted as continuous service within Local Government under the Redundancy Payments (Continuity of Employment in Local Government etc) (Modification) order 1999. New employees to the academy where the 6
with an academy count as continuous service for the purposes of sick pay or maternity pay? conditions of service for School Teachers in England and Wales (the Burgundy Book) applies the length of service for the purposes of sick pay entitlement and maternity leave entitlement is defined in terms of LEA Service, therefore only service with local authority schools is automatically recognised under the National Agreement. Support staff who come under the National Joint Council for Local Government Services, National Agreement on Pay and Conditions of Services (the Green Book), for the purposes of entitlements regarding annual leave, occupational sick and maternity pay, continuous service will include continuous previous service with any public authority to which the Redundancy Payments Modification Order applies. Therefore, the continuous service will continue to accrue for these purposes. Staff benefits: Frequently-asked questions Question Will I still be able to buy into the Suffolk County Council childcare voucher scheme? Will staff be able to continue to access the Bike to Work scheme? Answer Suffolk County Council operates a childcare voucher scheme which is open to all employees and is administered by Childcare Plus. When a school becomes an Academy, its employees are no longer eligible to participate in the SCC scheme, so the Academy needs to set up as an employer in its own right in order to continue to offer childcare vouchers to its employees. The Academy could work in partnership with Childcare Plus, but it is entirely at liberty to select an alternative provider of its own choice. No, if you have staff who currently have a hire agreement with SCC these will automatically come to an end when the school transfers to an academy. Consequently individuals will have to pay more to buy their bikes as the cost is determined by the age of the bike at the point their employment with SCC ends. They also lose the benefit of reduced tax & national insurance payments during the remainder of the hire period. There are different options available with regard to the outstanding debts (for the remaining hire instalments, & the cost of the bike): 1. No intervention by school. We will then have to deduct the balance of the hire instalments from the final SCC salary (as stated in the terms of the hire agreement they signed). They also have the option to buy the bike at this stage (out of their final SCC salary), or return it to SCC. We will write to them to 7
confirm all of this, but it would be helpful if the school warned them first. 2. School initially buys both outstanding debts from SCC. The individual then repays the school for both debts in instalments (we suggest that these are for the same amount as during the hire period). This option assumes that the individual wishes to buy the bike. 3. School initially buys both outstanding debts, but only reclaims the balance of the hire instalments from the individual (effectively buying the bike for them). 4. School pays off both outstanding debts without further recovery from the individual. Options 3 & 4 create taxable benefits which the individual may be taxed on next financial year. Can staff continue to receive other discounted benefits e.g. discounted gym membership, BUPA and do we have to offer these as the new employer? Can staff continue to have voluntary deductions from their pay (e.g. the old health insurance schemes, union fees)? Your named HR caseworker will be able to find out if you have any staff affected. Please contact Sally Roberts in the payroll team to discuss this further, as soon as you have decided on the option to be used for your staff. If these benefits are only open to staff on the basis they are SCC employees they will no longer be able to access them when their employment transfers to the academy. These benefits are not a contractual right so you do not have to offer equivalent schemes. This depends on the nature of the specific scheme. The payroll team will advise you where deductions cannot continue for members of your staff. All rights reserved. This publication may not be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior written permission of Schools Choice. Copyright 2014 8
TUPE FLOW CHART Full Governing Body proposes that school should become an academy Notify the LA & Schools HR Team Notify unions and staff of the proposals and issue measures' letter Must consider any third parties who may need to transfer or that may be affected (i.e. contract catering/cleaning) We can help you through the transfer process as well as talking to you about our services for Academies Invite to meetings must include staff that are absent e.g. Long term sick, maternity leave, secondment etc. If they are unable to attend through sickness follow ups can be offered individually on a 1:1 basis to update You may want to consider a separate meeting with unions before this to ensure full attendance from all the county secretaries First consultation meeting to be held with staff and unions local authority representative/current employer must be present. HR & pensions may attend. Set deadline for comments on the proposals e.g. one or two weeks Further meetings may need to be held depending on the complexity of the changes Full Governing Body meets to consider comments including feedback from parents and decide to become an Academy YES NO Final meeting to confirm outcome with staff and unions End of process or start again Staff should be notified of any schemes the Academy will be having e.g. child care vouchers Legal reviews transfer agreement for signing Letter issued to staff confirming the transfer will take place. HR to provide the Academy with due diligence information as per the TUPE regulations including employer liability information no less than 28 days before transfer TRANSFER TAKES PLACE 9
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