Archive for the ‘TUPE’ Category
By Philip - Friday, June 13th, 2008
For those interested and involved in TUPE, there is a very important decision on TUPE reported today.
In the case there was a service provision changeover. However instead of awarding the contract to one company , the contract went to two separate companies - A and B. The previous contractor we can call C.
A and B were not awarded an equal amount of the contract. A was awarded 71% and B was awarded 29%. To keep things simple, let’s say C (the transferor) employs 10 people on the contract that is transferring .
The question for the Tribunal (and I am distilling this) was:
1. Does A have 7 employees transfer and B 3 employees transfer, consistent with the terms of the contract?
2. Does A have 10 employees transfer and B none, consistent with Botzen?
The answer is 2. A was landed with 10 employees, despite only winning 71% of the contract.
This case will be useful if you are an employer awarded a small percentage of a large contract. You can argue that the party winning the large share of the contract should assume responsibility for all employees in scope.
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By Liam - Wednesday, June 11th, 2008
Both the Trade Union and Labour Relations (Consolidation) Act 1992 and the Transfer of Undertakings (Protection of Employment) Regulations 2006 contain provisions requiring employers to consult collectively about redundancies and measures envisaged as a consequence of the transfer respectively.
The penalty for failing to comply with such a requirement is up to 13 weeks’ pay for each employee within the description of employees in respect of which the protective award is made (the description of employees could be all employees being made redundant or all employees of a particular grade or classification - this will vary on a case by case basis).
The 13 weeks’ pay is subject to the same statutory cap as is used for redundancy pay. This means that the maximum protective award is currently £330 x 13 = £4,290.00 x number of employees who fall within the description in respect of which the award was made.
This could clearly be considerably less than uncapped pay x 13 weeks, particularly for high earners and therefore is a useful fact to know when assessing potential liability in a mass redundancy/mass TUPE exercise.
Posted in Redundancy, TUPE | No comments »
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By Liam - Thursday, March 6th, 2008
The ‘new’ TUPE Regulations that came in to effect in April 2006 replaced the TUPE Regulations 1981. The draftsmen added a few bits, removed a few bits and changed the section numbers around just to make life more fun for all.
Regulation 12 of old TUPE made any agreement (including a Compromise Agreement) void in so far as it:
- excluded or limited the effect of certain regulations, or
- precluded employees from presenting a complaint to an Employment Tribunal in respect of breach of certain regulations
One of the regulations that Regulation 12 affected was old Regulation 10 relating to information and consultation obligations. This meant that Compromise Agreements could not be used to compromise claims for failing to inform and consult (although arguable they could be used to compromise the right to receive an award for failing to inform and consult).
New TUPE Regulation 18 is the closest equivalent to old Regulation 12, but is significantly different. New Regulation 18 states that the law about Compromise Agreements as contained in section 203 of the Employment Rights Act 1996 applies to the TUPE Regulations 2006 as if the TUPE Regulations 2006 are part of the Employment Rights Act.
This change is important as it means employers can now compromise claims for failing to inform and consult in Compromise Agreements. If you are dealing with a TUPE situation and using a Compromise Agreement, make sure the Compromise Agreement excludes claims under TUPE 2006 and states that the Requirements of Regulation 18 of TUPE are satisfied.
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By Philip - Wednesday, January 2nd, 2008
To our readers. Well 2008 has certainly started with fireworks down at the EAT.
One query that often arises is whether TUPE applies cross border : ie closing down your UK call centre and opening up one in Bombay.
The EAT has held that TUPE can potentially apply to cross border transfers. Read it here
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By Liam - Tuesday, November 20th, 2007
The Court of Appeal have handed down their decision in Regent Security Services Limited v Power. The case concerns the TUPE Regulations and the rule that detrimental changes to transferring employees’ contracts are not enforceable. The question for the Court of Appeal was whether changes for the benefit of transferring employees were enforceable if related to a TUPE transfer.
Employers could be forgiven for taking the view that if detrimental changes can not be relied on by the employer, the employee should not be able to rely on beneficial changes. This was not what the Court of Appeal decided. Employees can take new beneficial changes connected to a TUPE transfer with one hand and take old more beneficial (unchanged) terms with the other.
It is worth mentioning that any changes, whether detrimental or not, that are not related to a TUPE transfer, are still enforceable. This means that following a change of job e.g. promotion, new terms can be offered and such terms should be enforceable.
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By Sarah - Wednesday, August 22nd, 2007
An executive was dismissed four months before the transfer of undertaking took place. The male brought a claim for unfair dismissal and race discrimination and the Tribunal held that the dismissal was in anticipation of the transfer! It held the transferee liable both for automatic unfair dismissal and for the transferor’s pre-transfer discrimination.
The first issue for the EAT was whether the transferor had the right to appeal notwithstanding the Tribunal’s ruling that the transferee was liable. The EAT ruled on this preliminary point that it did have the right, since if the Tribunal’s decision was overturned liability would revert back to the transferor. You can read the full decision here.
You may wonder why the transferor would wish to get involved since the transferee was the one against whom the award was made. Well I suspect it related to indemnities given by the transferor to the transferee relating to such conduct matters pre-transfer. The case is interesting from the angle of time between dismissal and transfer and a reminder of the importance of effective indemnities.
Posted in Sex/Race Discrimination, TUPE, Unfair Dismissal | No comments »
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By Liam - Thursday, June 28th, 2007
Readers of this blog will be aware that the Transfer of Undertakings (Protection of Employment) Regulations 1981 were replaced for transfers on or after 6 April 2006 by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (see our Podcast on the subject).
Cases on the new Regulations are now starting to filter through the Tribunal system and this week saw the handing down of the first EAT judgment on the new insolvency provisions contained in regulation 8 of TUPE 2006. As one might expect for a TUPE case, the case is not light bed time reading.
Regulation 8 makes provision for parts of TUPE (relating to Unfair Dismissal) not to apply in full in the case of an insolvent transferor. Different types of insolvency are treated slightly differently, depending on whether the insolvency is with a view to the liquidation of assets. However, the two sets of rules for the two different types of insolvency have one thing in common. For either of them to apply, the Transfer must occur after the insolvency practitioner is appointed to act in the capacity of insolvency practitioner (IP) (as distinct from being involved with a view to being appointed in the capacity of IP at a later date).
The transfer must also occur after insolvency proceedings are instituted. Proceedings are instituted for the purposes of TUPE at the same time as they are instituted for the purposes of the statutory insolvency procedures themselves.
If the Transfer pre-dates the appointment of the IP, or pre-dates the institution of insolvency proceedings, regulation 8 does not kick in and therefore TUPE applies in full. If TUPE applies in full, the Transferor takes on all liabilities post transfer and the Secretary of State is not responsible for any payments.
Posted in TUPE | 1 comment »
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By Liam - Monday, April 23rd, 2007
Back in January 2007, this Blog posted about a TUPE case that held only post Transfer changes that are detrimental to the employee are void - changes that are beneficial to the employee are allowed (see here).
The DTI has now issued a guide for Employers, Employees and Representatives which reflects this new case. As one might expect for something TUPE related, the guide is not short but is nonetheless helpful background reading.
If you would like to know more about TUPE 2006, why not listen to our podcast
Posted in TUPE | 4 comments »
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By Philip - Tuesday, January 30th, 2007
Changes to Terms and Conditions of employment after a TUPE transfer are the subject here. In summary, changes which benefit the employee will be allowed. Changes that do not benefit the employee will be void.
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By Philip - Monday, January 15th, 2007
The much loved TUPE Regulations have a number of immutable, underlying principles. A key concept is that in order for TUPE to apply the identity of the employer has to change. Therefore if a transaction involving a limited company is effected by a share sale, TUPE will not normally apply, as the identity of the employer has not changed, merely the identity of the owner of the employer. Reminder here.
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