Early Bird Seminar - TUPE March 2011


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TUPE Seminar

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Early Bird Seminar - TUPE March 2011

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