TUPE and Sick pay

Iamdave

Hi, 

Have taken over a business and presented them with contracts. One employee is questioning the amount of sick pay offered. Saying they used to get 6 months sick pay at full pay and 6 months at half pay. Another employee says they never had employment contracts with the previous owner (family firm) The person questioning is a relative of previous owner so its likely they had favourable terms in regards to sick pay with them. 

As far as we are aware though there is no physical contract showing that amount of sick pay and its not really an amount a company of 7 employees could reasonably be expected to absorb in terms of cost as far as i see it. 

So if there is no previous contract proving that amount of sick pay does it need to be honoured under TUPE?

DullGreyGuy

What was in the ELI from the business?

Undervalued

Iamdave said:

Hi, 

Have taken over a business and presented them with contracts. One employee is questioning the amount of sick pay offered. Saying they used to get 6 months sick pay at full pay and 6 months at half pay. Another employee says they never had employment contracts with the previous owner (family firm) The person questioning is a relative of previous owner so its likely they had favourable terms in regards to sick pay with them. 

As far as we are aware though there is no physical contract showing that amount of sick pay and its not really an amount a company of 7 employees could reasonably be expected to absorb in terms of cost as far as i see it. 

So if there is no previous contract proving that amount of sick pay does it need to be honoured under TUPE?

In most areas of English law (including employment) a contract does not have to be in writing to be valid. Offer and acceptance forms a contract on the agreed terms. Obviously it is easier to prove what was agreed if it was written down but an entirely verbal agreement is just as enforceable.

So, certainly if this employee has evidence to back up his claim (and possibly even without as I doubt you have evidence to the contrary) he may well be entitled to that level of sick pay.

That said, most often these days sick pay "entitlement" over and above SSP is to some extent "discretionary" rather than an hard and fast contractual entitlement. But not always.....

Be careful and take proper legal advice if you are unsure.

Iamdave

one of the other employees isn't related to the original owner. they said they had no written contract and were barely allowed to take leave more than a few days as they were the only ones capable of carrying out a certain business function (thankfully we've not trained ourselves to cover her so she can have her leave now) SO fairly certain this employee didn't have 6 months sick pay as an implied/verbal benefit. 

Can't be many/any small businesses out there that can afford to offer 6 months sick pay? it'd cost us a years salary to cover that if someone was sick for that long.  

DullGreyGuy

Iamdave said:

one of the other employees isn't related to the original owner. they said they had no written contract and were barely allowed to take leave more than a few days as they were the only ones capable of carrying out a certain business function (thankfully we've not trained ourselves to cover her so she can have her leave now) SO fairly certain this employee didn't have 6 months sick pay as an implied/verbal benefit. 

Can't be many/any small businesses out there that can afford to offer 6 months sick pay? it'd cost us a years salary to cover that if someone was sick for that long.  

Ask again, what did it say on the Employer Liability Information say about this employee and their sick pay? The whole idea of the ELI 28 days before the transfer effective date is so you aren't reliant on the employee confirming the details etc

Undervalued

Iamdave said:

one of the other employees isn't related to the original owner. they said they had no written contract and were barely allowed to take leave more than a few days as they were the only ones capable of carrying out a certain business function (thankfully we've not trained ourselves to cover her so she can have her leave now) SO fairly certain this employee didn't have 6 months sick pay as an implied/verbal benefit. 

Can't be many/any small businesses out there that can afford to offer 6 months sick pay? it'd cost us a years salary to cover that if someone was sick for that long.  

That may apply to their annual leave (which can only be taken when the employer dictates subject to fairly minimal notice). However, it can't apply to sickness absence. Suppose an employee is in hospital for a few weeks - it happens. Yes, any sick pay beyond SSP is a "contractual" matter but as I have explained that contract doesn't have to be in writing. Remember, despite the name, the employer has to meet the cost of SSP, those rules changed many years ago.

Regarding the long sick pay entitlement that one employee may (or may not) have, it is perfectly possible to cover this with insurance, certainly for an extended absence. That way you would have a known cost with less risk.

Iamdave

There was no ELI from the previous owner, to be honest they were massively out of date in terms of how they run their business (everything on paper) when the rest of the industry was on computers 20 years ago 

DullGreyGuy

Iamdave said:

There was no ELI from the previous owner, to be honest they were massively out of date in terms of how they run their business (everything on paper) when the rest of the industry was on computers 20 years ago 

As an aside... these types of comments are funny because "20 years ago" seems like an age ago and then I remember that was only 2003 at which point I think the rest of the industry should have been on computers over 20 years ago.

If they didn't provide the ELI information 28 days before the transfer then they are in breach of the TUPE regulations and you have grounds for action against the former employer

Iamdave

Thanks dull grey guy, that seems pretty straight forward then. Like I said they were still in the Stone Age in terms of technology so they won’t have provided any information like that. 

So any claim from the employee goes full circle back to the old owner. 

DullGreyGuy

You say you "took over" a business... what does that mean fully in legal terms? 

TUPE wouldnt apply for example if you bought the Ltd and the people are still employees of that Ltd and its just now that you or your company is the shareholder and director(s)

Savvy_Sue

T&C can be changed after transfer in any event, and company sick pay is always likely to be discretionary anyway.

You do need good advice on this, but having a consistent policy is always a good thing IMO!