TUPE and Compensation arising from Redundancy

MikeyBhoy

Hi all,

I used to work in the Civil Service for about 15 years, before being TUPE'd to a large defence contractor in 2007 where I've worked since.

My old employer had a quite reasonable redundancy package known as the Civil Service Compensation Scheme (CSCS). Depending on years served, age, etc, we could receive a compensation payment of upto 3 x salary if made redundant.

Indeed some staff who TUPE'd out with me have already been made redundant and have received the same package they would have received under the CSCS.

Recent announcements by Gordon Brown that he is set to alter the terms of the CSCS in this parliament have me worried. If the compensation package of my old employer changes, could my new employer subsequently say I am no longer entitled to the previous terms and will now only get the reduced terms?. Is compensation upon redundancy a Term and Condition under TUPE and is it protected?

The wording in FAQ documents I read at the time of the TUPE transfer are open to interpretation. They say that you will receive a compensation package of equal value to that you would receive under CSCS rules. But if the CSCS rules change ...?


All comments and views welcome.

Debt_Free_Chick

TUPE does not require the new employer to continue to match the old employer's terms, forever. On the face of it, that's good news for you so if the Civil Service downgraded their terms, your current employer is not obliged to follow suit.

However, your current employer is under no obligation to continue to match your old terms. If they are contractual, then your current employer can vary the terms of your contract following the normal rules - typically, they need your consent, but if you don't consent they can - subject to due process - force their new terms on you.

In summary, you do not need to worry about changest to the CSCS. But you do need to watch for your employer varying your T&Cs of employment, "in the usual way".

HTH

MikeyBhoy

Thanks for the reply DFC,

I think I follow you.

funnily enough, my (admittedly vague) understanding of TUPE as explained to me at the time of transfer, was that my new employer does have to keep my terms and conditions the same indefinitely (unless I agree to change them in exchange for something, e.g. a pay rise or promotion), even if I TUPE transfer again to another company.

I'm hoping that my T&C's in the former organisation were effectively "frozen" when I came across in 2007 and so the new company will match the CSCS as it was at 2007, and not how it might soon look in Aug 2009.

I'm slightly encouraged in that some TUPE colleagues have alread had redundancy at the higher rate. If I received less generous terms than them, would that not be a form of discrimination?

Mike

AnxiousMum

The TUPE agreement is used in all of the schools when changing to academy status. They harp about the security imposed by the TUPE agreement. I think it's either Clause 5 or 6 of the agreement though that states that when there is a change of management structure or financial structure, the security offered by the TUPE agreement no longer exists.

MikeyBhoy

Thanks Anxious,

I think your referring to the ETO (Economic, Technical or Organisation) part of TUPE dealing with redundancy.

I'm not so bothered about being made redundant, in fact it's highly likely in my case - the post is going in December, but I am keen to make sure I get the same compensation terms as my colleagues who have already been made redundant.

Mike

dampsquib

The prospect of drastic cuts in the amounts paid under the CSCS rules must be quite alarming to those still in work. How are they going to get the unions to accept such cuts? Maybe by claiming that jobs cuts will be reduced, if staff accept poorer redundancy terms?
Thankfully, I escaped via redundancy/early retirement last year, so I no longer have to worry about my terms & conditions vanishing.
Redundancy compensation is indeed protected by TUPE - even where severance leads to Approved/Flexible/Compulsory Retirement under the CSCS rules. This has been confirmed by cases in the European Court of Justice. Whilst TUPE doesn't protect pensions, it does protect pre-retirement age compensation packages. Pensions liabilities may alternatively have been protected by contractual obligations placed on the new employer.
In my previous situation, no one seemed quite clear exactly what rules applied - was it current CSCS rules, or the rules in force on Day 1 of the transfer. When it came to calculating compensation, the third part engaged to do it, seemed to use the current CSCS rules, as they had at least been amended (in an attempt) to keep up with legislation changes. It seems even the current CSCS rules may not be fully legal though. I gather an employment tribunal ruled last year that the tapering of the 6 mth salary payment for staff aged over 57, did not comply with age discrimination legislation - even though the logic behind the tapering was quite sensible.
Good luck!

MikeyBhoy

Dampsquid,

very informative, thank you. Clearly you've been there, done that, bought the T-shirt .

I couldn't find anything online or in my paperwork which confirmed that compensation terms were protected under TUPE so what you say is quite reassuring..

I have a colleague who falls into the situation you have described for over 57s. They are very close to retirement, and under CSCS tapering rules he would have received less than 1000 pounds in compensation.

However our new company have confirmed that he will in fact receive statutory redundancy terms, which mean a lump sum closer to 10,000 given his years of service.

This will bring him into line with the over 60's in the company who get the statutory terms as a minimum.

Anyway, here's hoping that in my case, they will apply the "Day 1" rules, rather than the current terms which are being threatened by Gordon B. Hopefully I'll have gone before then.