Kerry Hudson, Employment Solicitor said;

“Many clients are concerned about the changes they may face and the how their jobs or their contracts may be affected. People immediately panic when they know they’re getting a new boss. They wonder what is going to happen to them. But the first thing I always tell them is ‘your terms and conditions should not change’.

One prime concern is travel, especially, for example, among parents with children at nursery who fear they may have further to go for work.  A new employer may offer travel pay and to offer the extra travel time as part of the working day, but the new conditions may still leave employees daunted. In such cases, where there is no resolution between the two parties it becomes tricky for employees to negotiate an exit. She said workers should always be mindful of asking for redundancy rather than offering their resignation. Asking a person to travel to a different location might not look like a big deal to a new employer, but to the other person it can be and they may prefer to be made redundant. But at the same time you cannot force a new employer to make you redundant.

This is where a solicitor comes in. In this instance a person should most definitely not put themselves in a position where they resign – instead they should still seek a fair redundancy. It can be tricky to negotiate when you’ve never had the experience but there is a process in which you have to explain why you can’t accept the changes, for example why you can’t travel. You will find that usually the new employer will accept your reasons. For an employee to bring a claim for constructive unfair dismissal is a lot messier for an employer than an amicable redundancy.

If there is a takeover where the company brand and operations remain the same but with new heads at the top there should be no implications on staff contracts. If a company is taken over and the face of the business changes – for example a change of brand and branches closing with staff and assets incorporated into the new brand –  employment is transferred from the old employer to the new and the rights of employees come under TUPE – Transfer of Undertakings (Protection of Employment) regulations. Working terms and conditions in an employee’s contract should not change under TUPE, but if they do they should be better – for example, a better pension.

In cases where an acquisition leads to the duplication of roles across the two businesses the new owners will hold a consultation process. This can lead to employees being asked to take voluntary redundancy, take up alternative roles within the business or re-apply for their existing roles. Those that opt for voluntary redundancy should receive their notice pay as a contractual entitlement on top of any redundancy pay. Ideally those who apply for voluntary redundancy should usually also receive an enhanced ex gratia payment – an incentive for them to apply. They can even receive payment in lieu of their notice – three months’ pay without having to work, and any accrued holiday pay on top of that is always an incentive. Not only is this an incentive to the workers but also to the employers who incur far less cost.”

For further information or advice on TUPE regulations, or any other employment related issue, please contact our expert Employment Law team who will be happy to help.

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A transfer of undertakings occurs either where:

• a) a third party buys or acquires part of the a business, or
• b) there is a change in a provision of services and the business either:
• c) engages contractors to carry out the work, or part of the work, that it previously carried out
• d) changes contractors which it engages to carry out the work, or
• e) it brings work previously carried out by a contractor in-house.

A transfer of undertaking does not occur on a share purchase as the Company entity remains the same, even though the owners may change.

Where is the Law governing Transfers of Undertakings set out?

The Law governing the Transfer of Undertakings is governed by the Transfer of Undertakings (Protection of Employment) Regulations 2006, which is often referred to as TUPE.

Who does it affect?

It affects Employees only. It does not apply to Workers, including agency workers.

Those Employees must form an organised grouping of employees situated in Great Britain which has as its principal purpose the carrying out of the activities concerned on behalf of the client. For the avoidance of doubt a single employee can form an “organised grouping”. However, following the Seawell-v-Ceva case, an employee will only form part of that grouping if they are expressly said to have done so, it will not be enough to show that they simply have fallen into a pattern of work where its principal purpose has become working for a single client or carrying out a specific role.

What effect does it have?

Where there is a Transfer of Undertakings, the existing employees’ employment rights are protected.

Any employee that is caught in a transfer sees their employment transfers from their present employer to the new provider of that service. The new provider steps into the shoes of the old employer and takes on the employees on their existing terms of employment.

In the event that a new employer wishes to change any of the terms of the old contracts then they are void. Therefore the only way to vary terms of a contract is with consent.

Can any dismissals be made following a TUPE Transfer?

Any dismissal connected to the transfer, provided that the employee has the requisite qualifying continuous employment, will be automatically unfair.

A recent case, Manchester College v Hazel, has held that automatically unfair dismissals will include those where employees are dismissed following their refusal to vary their contracts of employment where a new employer seeks to harmonise the terms of employment with their existing employees.

However, if the reasons for the dismissal are Economic, Technical, or Organisational then there may be a defence open to the new employer. This would include redundancies etc, however, if such were contemplated then provision should be made for such in the consultations and the relevant information which is provided to the employees or their representatives?

Are There Any Exemptions To TUPE?

Yes. Regulation 8 provides that employees will not transfer with the business and/or its assets, or with the change of provider of the service where the employer is in liquidation. There was for some time some debate over which of the insolvency proceedings would attract this protection. However, please see the previous article entitled “TUPE 2006: Insolvency and Life After Oakland“.

What Else Can Employees Expect as a result of TUPE?

As a result of TUPE where there is a proposed transfer of undertakings the present employer must consult with the Employees about the transfer in order to provide certain details. The Consultations must happen as soon as reasonably practicable, and in any event enough time before the transfer to allow the consultation to be meaningful. The information to be provided is specifically set out in TUPE.

If the consultation does not happen then the employees may have a claim for up to 13 weeks pay by way of a “protective award”.

Whether you are an employee or an employer, if you have any questions or queries on TUPE and its implications for a position you find yourself in, please do not hesitate to contact us on 024 7653 1532 or by email on enquiries@bttj.com.

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