Being TUPE’d – can new employer cut pension and allowances ?

garichd

Looking for a bit of advice on TUPE as my wife is currently being transferred to a new employer.

She’s received her new contract and some of the terms seem noticeably worse than what she currently has. I was under the impression TUPE protects existing terms and conditions, so just trying to understand where we stand.

A few key differences:

Pension

• Current employer: contributes up to 10% if she puts in 5% (so total 15%)
• New employer: only adds 1% extra (so 5% + 6% = 11%)

On-call allowance

• Currently £50 per day
• New contract says £20 per day

Bonus

• She’s consistently received 5%+ bonus each year for the last 5 years
• New contract is vague and doesn’t confirm if any bonus will be paid

My questions really are:

• Do things like regular bonuses or on-call payments count as “contractual” under TUPE if they’ve been consistently paid but not clearly written in the contract?
• Can the new employer reduce things like pension contributions and allowances like this?
• What’s the best next step if these changes aren’t allowed?

We haven’t signed anything yet and just want to understand our position before pushing back.

Any advice or experiences would be really appreciated.

elsien

Is there not a consultation process where some of these questions can be clarified? Or a union?

The new employer does not have to give the same pension contributions as the old one.
I would query the on-call allowance if that is in the existing contract.

Can’t help on the bonuses.

I would also ask if she’s understood correctly because the new employer may be giving the option of transferring over on the new contract terms and conditions rather than on the current ones.

In a recent TUPE in my organisation, some staff moving over preferred the new terms and conditions because the pay was higher, although other benefits were not quite as good. Others kept the old terms and conditions.

if she’s TUPEing and staying on her current terms and conditions, I’m not sure she signs a new contract ?

p00hsticks

I've been TUPE'd a couple of times, although a few decades back.

As a previous poster said, there should be some form of consultation and negotiation prior to the transfer going ahead - if not with the individual, then with a representative - either a union official if there is a recognised union or someone agreed with the affected employees.

The new company is allowed to make changes to an employees contact for 'Economic, Technical or Organisational' (ETO) reasons in exactly the same way that the existing employer could. It is then up to the individual to either accept or reject the changes, although a rejection could be considered as being effectively a resignation. note that simply not signing a new contract would think be considered as tacitly accepting it.

As others have said, some large companies that carry out TUPE's regularly may give transferred employees the choice of remaining on existing T&Cs or swapping to the new company's standard terms.

YBR

I've also been subject to TUPE several times. What I've learned (not an expert) largely echos previous posters with a few differences …

• the "consultation" is not a negotiation, it needs employee representatives, who may be union officials or not.
• we never signed new contracts as part of TUPE, contractual terms must not be changed at the time of TUPE [1] although Pension provision is not protected the same way.
• Anything that can be identified as discretionary, or custom and practice, rather than contractual may be changed - one of my TUPEs we lost the paid rest day when changing from day to night shifts. Although it was all we'd ever known, we couldn't prove it was contractual.

So the Bonus is almost certainly discretionary, and not protected. On call allowance there wouldn't be a general rule.

[1] But as soon as the TUPE is complete, then the new employer can make changes as the previous employer could, which is what @p00hsticks says.

ohreallƳ

Most pension arrangements fall outside the scope of TUPE.

Bonuses and allowances will be seen as fair game by the new employer and may be in jeopardy by intent or otherwise.

Is there a trade union recognition agreement and if so are they involved so far?

Undervalued

https://forums.moneysavingexpert.com/discussion/comment/81949142#Comment_81949142

Indeed.

In theory, TUPE largely protects any employment rights the employee had with their current employer. It certainly doesn't enhance them!

However what many people don't realise is just how easy it is for any employer to make changes to employee's terms and conditions ("contract") if they go about it properly and have valid business reasons for doing so. An employment "contract" is far from set in stone. Usually the bottom line is that if the employee won't accept the changes their only option is to resign and claim unfair dismissal. Note is is not constructive dismissal in such circumstances despite the resignation. Ultimately an employment tribunal would have to decide if the changes are reasonable or not. If the ex employee wins they will get some compensation but the employer cannot be compelled to re-employ them.

MyRealNameToo

The main advantage of TUPE is that your start date doesnt change, ie if you had 3 years service on the day of TUPE on the following day you have 3 years and 1 day for consideration of redundancy or notice periods etc rather than going down to 1 day.

New employers have two choices really if they want to make changes… 1) they can leverage discretionary elements of the old contract (eg when a former employer bought another firm they offered them all new terms and made it clear that the "discretionary bonus" (up to 100% depending on your grade) would not be paid to anyone staying on their old terms. Obviously if the bonus hadn't been discretionary they couldn't have done this.) 2) They could have argued business need and forced through the changes

Intoodeep

As far as I was aware (Payroll Manager for 43 years), things like Bonuses are more often than not at the discretion of the Company and they are not a guaranteed payment.

Undervalued

https://forums.moneysavingexpert.com/discussion/comment/81965490#Comment_81965490

Indeed.

If there is a hard and fast contractual entitlement to a "bonus" then it isn't really a bonus at all and simply part of the salary!

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/81965526#Comment_81965526

It can still be a bonus it's just how its calculated is set in contractual terms. A former employer had a very mechanical way of calculating these things based on a combination of company profits and personal performance rating so as soon as the annual results were announced you knew what bonus percentage you'd get but in their case they had it on the intranet site not in your contract so it was still discretionary even if formulaic

ohreallƳ

There is no need for a "bonus" to be included in contractual terms.

Depending on the local situation/ agreements the bonus could very well come under implied agreement, custom and practice. If the bonus is longstanding and notorious (there are other conditions) you may very well be in a place of some strength to argue it's continuation.

Is the site unionised and are you a member?