Demystifying TUPEPrepared for Locality members byLuke Watkeys, Senior Consultant

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About Real People

• A social enterprise developed by the homelessness charity St. Mungo’s Broadway.

• A highly qualified and award-winning team specialising in providing people management advice, training and support to small and medium sized charities and community organisations.

• All Locality members are entitled to two-freehours of remote expert HR support per annum

Before we start…

• Come up with a fact, statement and/or term to do with TUPE and put it in the question box

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TUPE: what is it?

• Transfer of Undertakings (Protection of Employment) Regulations 2006:– “Transfer of an economic entity (organised grouping

of resources) that retains its identity”

• In our sector it is most likely to occur with mergers and ‘service provision changes’

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Current Provider

(Transferor)

New Provider

(Transferee)

Does TUPE apply?

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Commissioner

ProviderSecondary Provider

OutsourcingInsourcing

Second-generation outsourcing

Does TUPE apply?

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• Questions to consider:– Are the services the same? TUPE Regulations have been

amended from January 2014 to state that, for there to be a service provision change under TUPE, the activities carried out by the new provider after the transfer must be "fundamentally the same" as the activities carried out by the previous provider

– Will the service provided become fragmented?– Are the employees assigned to the transferring service?

• Always get legal advice if you or the other organisation dispute that TUPE applies!

The basics

1. If TUPE applies, all relevant employees transfer to the new organisation with their existing terms and conditions and continuous service

2. Joint duty to consult3. Dismissals and changes relating to

the transfer will be void (unless for an ETO reason entailing changes to the workforce)

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Straight after award of contract

• Make contact with relevant people at current provider

• Send over employee due diligence forms and request copies of employee contracts

• Establish whether there are representatives and if not ensure that the current provider will arrange this

• Send a notification letter to representatives and employees via current provider

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Duty to consult

• Joint duty for transferor and transferee

• Conduct a full and meaningful consultation at the earliest practicable time with representatives

• If there are no trade union or employee representatives, then representatives must be elected. The current employer must facilitate the election process.

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Duty to consult

• Both transferor and transferee must provide the following information to the representatives:– that a transfer is to take place – the reason for the transfer and when it is expected to take place – the implications for the employees – the measures (i.e. changes) that the employer expects to take in

relation to the employees – the measures (i.e. changes) that the new employer expects to

take in relation to the employees

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Consultation meetings

• Go though letters and explain all points

• Answer any questions honestly

• Follow up with letters summarising the meeting and answering any outstanding queries

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Duty to consult

• The cost of getting it wrong…

– 13 weeks actual pay per employee

– Joint liability between transferor and transferee

– The purpose of the award is punitive, i.e. to ensure the employer complies with its obligations, rather than compensatory. Case law has established that a complete failure to comply will mean that the maximum award will be made.

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Making changes

• You can make changes for the following ETO reasons:

– Economic: The profitability or market performance of the new employer’s business

– Technical: The nature of the equipment or production processes which the new employer operates

– Organisational: The management or organisational structure of the new employer’s business

• Employer has to show that the ETO reason entails changes in the workforce. This means that there must be changes in:

– The actual numbers employed in the workforce; or

– The functions performed by employees.

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Making changes

• In broad terms:– Reorganising is generally

acceptable so long as you consider pooling others who weren’t part of the TUPE’dgroup, and offer alternative roles to those affected

– Any other changes must also be a change to the wider workforce for business reasons and not linked to TUPE.

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Making changes

• Any changes must be genuine!

• Occupational pensions are the exception

• Get your business case on paper and seek legal advice before implementing

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Poll: are these acceptable?

• Salary: £25k– You want to make it £22k to fit with other staff and because you

went in at a low cost

• Hours: 35 hours per week, 9am - 5pm– You want to make them 37.5 hours a week on a 24/7 rota to fit

with the rota which meets the needs of the service as requested by the local authority

• Pay day: 20th of the Month– You want to make it 25th of the month to fit with the rest of the

organisation

• Private health insurance– You don’t want to offer this as you think it is a ridiculous benefit

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Making changes

• The cost of getting it wrong…– Breach of contract

– Unauthorised deduction of wages

– Constructive or unfair dismissal • Compensatory award of maximum of £76,574 and 52

weeks' pay (whichever is the lower), with the maximum ‘week's pay’ set at £464

• Basic award for automatically unfair dismissals at £5,676.

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“What if I refuse?”

• Employees who refuse a transfer are effectively resigning

• However, continue to consult with them until you have this confirmed from them in writing and you know that they understand the implications of their actions

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Day of transfer and beyond

• All the personnel files should be sent from transferor 28 days before

• Transferee to go through files with a fine toothed comb, noting current warnings / sickness triggers / performance issues

• Meet with all staff, inducting them and conducting a thorough training needs analysis

• Go over key policies:– Sickness– Code of Conduct– Disciplinary– Grievance

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Cultural assimilation

• For cultural assimilation, it is imperative you get in early. Your organisation culture is defined in practices:

– Availability of management

– Policies

– Expectations

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Crack down

• Pick up on all issues which don’t fit positively with your culture immediately.– Zero tolerance on

misconduct– Address and monitor

performance concerns– Deal with existing

sickness issues

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Make the deal explicit

• Think about what can they expect from you as an employer, and what you expect of them:– Development

– Communication and consultation

– Working and management style

– Diversity and equal opportunities

– Fairness

– Work life balance

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Make the deal explicit

• Full commitment to give your best

• Being fully committed to understanding the needs of your customers / clients

• Contributing to continuous improvement

• Using your initiative and judgement

• Following our procedures and code of conduct

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Thanks- need further support?

• All Locality members are entitled to two-freehours of remote expert HR support per annum

• Visit our website:– www.broadwaysrealpeople.com

• Email me at:– luke.watkeys@realpeoplehr.co.uk

• Call us on:– 0207 710 0626

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