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Early Bird Seminar - TUPE March 2011
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Early Bird Seminar - TUPE March 2011


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TUPE Seminar

TUPE Seminar

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  • 1. Early Bird Seminar TUPE: Clearing a path through the minefield March 2011
  • 2. Agenda
    • Update
    • Practical guide to TUPE transfers
      • Worked example
      • Key procedural steps: focus on Transferor
      • 5 things a Transferee should do
      • 5 tricky issues for a Transferee
      • Cost of getting it wrong
  • 3. Update on…
    • Shared paternity leave
    • 26 weeks “additional maternity leave” transferred to baby’s father (similar arrangements for same sex and adopting families)
    • 3 April 2011
    • Retirement
    • Removal of default retirement age
    • 1 October 2011
    • Bribery Act
    • Delayed
  • 4. Compensation Limits and National Minimum Wage (1 Feb 11)
    • Max. compensatory award for unfair dismissal increased from £65,300 to £68,400
    • Max. limit on a week’s pay increased from £380 to £400
    • Min. basic award for certain unfair dismissals (e.g. dismissal for reason of being a trade union member) increased to £5,000
    • Standard minimum wage rate (workers over 21) = £5.93 a n hour
  • 5.
    • TUPE –
    • Clearing a path through
    • the minefield
  • 6. When might TUPE apply? Are you bidding or relinquishing a commercial contract? Changing an old contractor for a new one? In-sourcing or out-sourcing a team, department or business function? Restructuring your group companies? Changing the status of your business, for example Ltd to LLP? Buying another business or selling part of your own? When could a transfer occur?
  • 7. Typical outsourcing scenario
    • Today’s example – outsourcing
    • O. LYMPIC Ltd has decided to outsource two functions of its business to RINGS Ltd: its courier function and its surveying function
    • There are 24 O. LYMPIC staff that work on the courier service and 6 staff in the surveying team
    • O. LYMPIC and RINGS have agreed that RINGS Ltd will take on the two functions from 1 June 2011
  • 8. Example Transfer date: 1 st June 2011 “ Transferee” Main workforce O. LYMPIC Ltd Courier Service Surveyors RINGS Ltd “ Transferor” Transferring staff
  • 9. TUPE transfer in practice
    • Identifying affected employees
    • Appropriate Representatives: Trade Union and/or employee reps
    • Election of Employee Representatives
    • Employee Liability Information
    • Measures
    • Duty to inform
    • Duty to consult
  • 10. Identifying affected employees
    • Transferor must identify which
    • employees are actually “ affected ” by the transfer
    • These will include the transferring employees
    • Non-transferring employees may still be “affected”
    • Duties to inform/consult apply to “affected employees” not just to transferring employees
  • 11. Identifying the “appropriate representatives”
    • Obligations to inform and to consult require appropriate representatives
    • May require a mixture of union reps and employee reps if union only recognised in respect of part of the transferring workforce
  • 12. Electing Employee Representatives
    • Announce the need to have employee reps
    • Determine how many reps you require (1 rep : 15 employees as a guide)
    • Invite candidates : simple ballot required
    • Too few candidates/no candidates : no requirement to have reps, just a requirement to allow employees to put themselves forward as candidates
  • 13. HALF TIME
    • So…
    • Affected employees identified
    • Scope of union recognition (if any) identified
    • Union reps identified (if union recognised)
    • Employee reps elected
    • What happens now…?
  • 14. Employee Liability Information
    • Transferor must send to the Transferee the E.L.I for each transferring employee
    • E.L.I must be sent 14 days before the transfer, but ideally earlier
    • The E.L.I will enable Transferee to:
      • understand the terms/liabilities that apply to the employees that will transfer
      • identify what measures it envisages
    • Ongoing obligation on Transferor to update E.L.I right up to the Transfer Date
  • 15. Transferee sends measures letter to Transferor
    • What next? Transferee should send a measures letter to the Transferor
    • What’s this? Letter must explain any ‘measures’ that the Transferee envisages taking in relation to the transferring employees
    • No measures? If Transferee envisages no measures, that fact must be confirmed in writing to the Transferor
    • When? Letter must be sent “in good time”. Aim for no later than 3 weeks pre transfer
  • 16. Transferee sends measures letter to Transferor
    • Measures? Any action, step or arrangement proposed by the Transferee which could affect the transferring employees’ contractual terms and/or working arrangements
    • What next? Transferor must incorporate Transferee's measures in TUPE information letter
  • 17. Inform representatives
    • Who? Written information must be provided to “appropriate representatives” of “affected employees”
    • When? “Long enough before the transfer to enable consultation to take place between the employer and the employees’ representatives”. Generally, no later than 14 days pre transfer.
    • What information?
  • 18. Mandatory Consultation
    • Transferor must consult with the appropriate reps (with a view to seeking their agreement) about any measures it, the Transferor, wishes to take and which may have an impact on affected employees
    • In practice, it’s rare for the Transferor to propose any measures, so mandatory consultation not normally triggered
  • 19. Voluntary Consultation
    • If Transferor proposes no measures, it’s still common practice for Transferor to hold informal consultation meetings with representatives and affected employees about key issues
    • The Transferee is not legally required to consult with the Transferor’s employees before the transfer, but this may be beneficial commercially.
  • 20. Part 2: Focus on the Transferee
    • 5 things a Transferee should do
    • 5 tricky issues for a Transferee
    • The cost of getting it wrong
  • 21. 5 things a Transferee should do
    • Check the Employee Liability Information very carefully
    • Send your ‘measures’ letter in good time
    • Even small ‘administrative’ changes should be mentioned in the measures letter
    • Where possible, Transferee to participate pre-transfer informal consultation with transferring employees
    • Consider whether any of the Transferee’s existing employees are “affected” by the transfer
  • 22. 5 tricky issues for a Transferee
    • Making employees redundant (pre & post transfer)
    • Where appropriate, do not forget to ‘pool’ transferring
    • employees AND existing employees for post-transfer redundancies
    • 3. Harmonising terms and conditions of employment
    • 4. New place of work
    • 5. Pensions
    • 6. Replicating ‘unfamiliar’ benefits
    • 7. Union recognition
  • 23. Getting it wrong
    • Protective award (failure to inform/consult)
      • 13 weeks’ actual gross pay per employee
      • joint and several liability
      • punitive, not compensatory
      • e.g. 20 employees @ £25k p.a. @ 7 weeks award = £67,000!
    • Automatic unfair dismissals if transfer related and no ETO
    • Regulation 4(9) dismissals – possibly unfair
    • Contract variations VOID if transfer related and no ETO
  • 24. Questions?