TUPE - Is thee a minimum period of protection?

pb3

Hi everyone,

I've heard it bandied around that under TUPE, the new organization is obliged to honour your existing terms and conditions for a minimum period of 2 years.

However a bit of searching on the Internet suggests that there is no such mininum period - your existing pay and T&Cs continue as before . However the new organization can change your T&Cs or make you redundant at any point after the transfer if they can show a valid Economic, Technical or Organizational (ETO) reason.

Can anyoone clarify which of the above (if any) applies?

What I'm trying to ascertain is whether "Outsourcing of redundancies" is possible under TUPE. This is where OrgA has a decent severance package (compared to the statutory minimum) in place for its staff. To save money on severance costs OrgA TUPEs some of its staff to service provider OrgB, who promptly makes them redundant (potentially on the day after the transfer) on the statutory, using its own cheaper staff to deliver the service. Win-Win situation for both OrgA and OrgB.

Is such a scenario possible under existing TUPE regulations?

sangie595

pb3 wrote: »

Hi everyone,

I've heard it bandied around that under TUPE, the new organization is obliged to honour your existing terms and conditions for a minimum period of 2 years.

However a bit of searching on the Internet suggests that there is no such mininum period - your existing pay and T&Cs continue as before . However the new organization can change your T&Cs or make you redundant at any point after the transfer if they can show a valid Economic, Technical or Organizational (ETO) reason.

Can anyoone clarify which of the above (if any) applies?

What I'm trying to ascertain is whether "Outsourcing of redundancies" is possible under TUPE. This is where OrgA has a decent severance package (compared to the statutory minimum) in place for its staff. To save money on severance costs OrgA TUPEs some of its staff to service provider OrgB, who promptly makes them redundant (potentially on the day after the transfer) on the statutory, using its own cheaper staff to deliver the service. Win-Win situation for both OrgA and OrgB.

Is such a scenario possible under existing TUPE regulations?

There is neither a minimum nor a maximum - the myth of "two years protection" keeps doing the rounds, but it isn't true. As I recall it is based on some quite old case law on a specific situation, in which it was ruled that even without any ETO reasons, it was not reasonable to expect an employer to never change terms of employment again if TUPE was involved, and it was felt that two years (which was the time period in that case) was sufficient time to have passed.

The situation you suggest could hypothetically happen, but it would depend on the exact circumstances and be loaded with risk if it happened within a one day timescale! The redundancy terms for employer A would need to be contractual or part of a collective agreement - which is very rare. If they are not, then they are policy, and employer A has the right to change that policy at any time anyway. Depending on the circumstances, they may have to consult or give notice, but they could do it. If that is the case, then employer B would only have to do the same.

And organisation B could not simply make staff redundant based on the fact that they are paid more. That would be a reason connected to the TUPE and therefore unfair in law. What would need to happen is a "restructure" in the sense that all the potential staff, regardless of pay, would need to be pooled against the "new jobs" (which may be nothing more than the old employer B role on the lower pay). If employees refuse the "new jobs" then they may be redundant - but that does depend on the exact circumstances because it is no longer (and hasn't been for several years) the case that refusing a job on lower pay is necessarily reasonable in law.

And any redundancy situation would be subject to all the usual consultation periods and so on.

The other thing to note is that staff are not the basis of a TUPE - services are. The business case is that the saving is achieved by the transfer of the service. Anything else is ancillary to that case. Only staff who are in scope as delivering that service are transferred, and so it could not be argued that the transfer was to save money on severance costs per se. It might be a consideration but it would be very hard to prove it was the reason or the prime reason. At the end of this, organisation A would still want the level of service delivery, and their aim in outsourcing is to make the service delivery more competitive, more efficient and/or more profitable. These are legitimate business cases, so any unfairness in relation to staff terms would need to be shown in relation to process, not to the business reasons. In short, and employer can state any business case it wants and the law is not concerned about that. Businesses make their own decisions. It is the "how" that is the risk, not the "why".

All that said - the very simple answer is yes, hypothetically and practically, changes to terms could be effected very quickly after a TUPE, and it would be a stupid employer who couldn't come up with an ETO reason.

getmore4less

TUPE only protects at the point of transfer unless there are additional contractual terms put on the transfer.


One thing you can do is collect evidence that the current redundancy terms are part of your current T&C often through custom and practice.
Things that help are.
Have they been negotiated through collective bargaining
Are they common knowledge
Have they been used for a few rounds of redundancies and been the same every time and each time common knowledge.

Anything that points to the packages being the normal custom and practice of the organization.

A lot of companies will have the usual discretionary clauses in any policy but if they forget to use them and use the same policy a number of times they risk C&P, ovoiding C&P stratagies are to only communicate with those that are at risk/redundnant so the policy is not seen to be in use by everyone, some go further and use comprimise/settlement agreements so the actual deals are never common knowledge.

It is not easy but has been done, you just need everyone to be on side and enough evidence to convince the new company is is not worth going to court.

Andy_L

TUPE prevents your T&Cs being changed as a result of the transfer, except for the ETO reasons mentioned above. There is nothing stopping the new employer changing them following the normal process. In exactly the same way that, if there was no transfer, your current employer could change them. It is, these days, quite easy for an employer to change your contract for the worse so TUPE protection isn't all that

sangie595

Andy_L wrote: »

There is nothing stopping the new employer changing them following the normal process. In exactly the same way that, if there was no transfer, your current employer could change them.

Actually there is something stopping the new employer changing them following the "normal process". That would be the TUPE legislation. That is why the new employer must demonstrate an ETO reason for any change. Not that that would be difficult. But technically, what the law on TUPE says is that the terms of a transferred worker cannot be changed by the new employer. Full stop. Case law has made some inroads into that by saying exactly what you are saying - it is unrealistic to have a protection that lasts for ever and therefore restricts the employer making legitimate business decisions. hence, there is a general assumption that changes made after a couple of years are unlikely to be challengeable. But it would be a stretch to think an employer couldn't easily find an ETO reason, so it may be moot. But employers cannot change things on a whim after TUPE. And they can be (and are) called to account in tribunals if they do. It is for the employer to demonstrate that that have an ETO reason - and if they cannot then they have unfairly dismissed.