Getting Involved, Getting Organised, Protecting Our Future
Commiss
ioning
Service
& Needs
Assessment
Moves to Procurement
Service Review
SIPS
Options Appraisal
Contract advert
Tender process
Contract evaluation
Contract award
TUPE
Post TUPE
TUPE
consultation
TUPE transfer
TUPE protection
TUPE challenges
Statutory
consultation
rights
Statutory consultation
rights – diminish over
time
TIME
No formal TU consultation rights
TUPE
TUPE
consultation
TUPE transfer
TIME
Statutory
consultation
rights



An organisation (or part of one) is transferred
from one employer to another and retains its
economic identity
Service provision change – an organisation
engages a contractor to do work on its
behalf, subsequent retenders to other
contractors or brings the work back in house
Must be an organised group of employees
doing the work that will transfer


Increasing examples of situations where
TUPE does not apply
Let’s play TUPE or not TUPE




An NHS Trust outsources its catering
function to private company X
120 staff formerly employed by the Trust
transfer to Company X
The service provided to the Trust by
Company X is broadly similar
TUPE or not TUPE?
TUPE
A Utility company retenders its meter reading contract
The contract is awarded to Company X
Company X announces that meter reading jobs will be
done on an individual franchise basis as this is its
existing business model
 The affected staff are told that TUPE will not apply
and all will be made redundant
 Company X offers re-employment, but the staff have
to form individual franchise companies and will have
to lease equipment (uniforms/vans/HHT’s etc) – they
will be doing the SAME WORK as previously
 TUPE or not TUPE?



Not
TUPE





4 local authorities establish a Joint Venture company with Company
X, where Company X is the major shareholder.
After 10 years the 4 authorities retender the work in 5 Frameworks
The work being retendered covers all of the work carried out by the
JV and new additional work
3 of the Frameworks will be awarded to one supplier exclusively
For the other 2 Frameworks
 Work will be awarded to multiple suppliers, including the LA’s own
workforce
 each supplier will be guaranteed a minimum amount of work
 Work over the minimum specified will be awarded ad-hoc for the
duration of the contract

TUPE or not TUPE?
BOTH
Getting Organised

Key impacts of failing to deal with transfers effectively are:
▪ Member terms and conditions may be undermined
(failure to deal with all TUPE and non TUPE issues
▪ Pensions not protected
▪ Recognition, facilities and UNISON organisation not
developed for post transfer
▪ Joint relationships and joint bargaining not developed
for post transfer
▪ DOCAS arrangements not in place
▪ Two Tier/Workforce Matters issues not addressed



Special Measures – notification from
transferee (new employer) of changes it will
make post transfer
Clarifies what is covered by TUPE & what isn’t
Critical
Employment contract and Incorporation Issues
Example of a TUPE notification on measures etc
TUPE Measures proposed by Capita in respect of transferring Liberata employees.
As required under the TUPE Regulations, I am writing to advise you of the proposed
measures that will occur in connection with the transfer to Capita Business Services
Limited
on the 5th J anuary 2009.
Capita will transfer existing Liberata Limited terms and conditions of employment with
the
exception of:
Employee Handbooks — All previous employee handbooks will be replaced by the
Capita
Employee Handbook, Your Guide to Capita', which will form the basis of employment
with
Capita Business Services Limited.
Upon transfer, Capita policies/guidelines will be used in respect of:
Policies and Procedures:
• Disciplinary and Grievance procedures — These will be replaced by Capita's
Disciplinary and Grievance Procedures. Please refer to the employee handbook.
• Employee Capability policy and procedure — Capita's arrangements will apply. Please
refer to the Disciplinary policy and Performance Improvement Plan.
• Dignity at Work — This will be replaced by Capita's Anti-Harassment and Bullying
procedures. Please refer to The Open Door policy for Grievance and Anti—Harassment
and Bullying sections of the handbook.
• Performance Appraisal policy and procedure — Capita's Performance Framework
will
be implemented. Please refer to Performance Management in the accompanying
Handbook. Current pay review arrangements will continue.
• Absence and Attendance policy and procedures — Sickness pay entitlements will
remain unchanged; however Capita's Absence Management procedures will be followed.
• Equal Opportunity policy and procedure — Capita's Equal Opportunities and
Diversity
policy and procedure will be followed. Please refer to the Equal Opportunities and
Diversity
section of the handbook.
• Maternity, Adoption, Paternity and Parental Leave Procedures — Enhanced pay
entitlement will remain unchanged; however Capita's procedures will apply in relation to
Maternity, Adoption, Paternity and Parental Leave.
• Drugs, Alcohol and Substance Abuse policy and procedure — Capita's Alcohol and
Drugs procedures will be followed. Please refer to the Health and Safety section of the
accompanying Handbook.
• Expenses (subsistence) policy — Capita's policy and procedure will be followed,
• Bereavement I Compassionate Leave — Capita's process and procedure will apply.
• Dependants' Leave Policy and Procedure — Capita's Time of for Dependants procedure
will apply.
• Leave for Religious Observance (as per Holiday policy) — Capita's approach will apply.
• Health and Safety — Capita's policies and procedures will be followed, this includes the
Capita provision for DSE eye tests and spectacles for DSE use.
• Fraud policy and procedure — This will be replaced by Capita's policy, please see the
Security and Confidentiality section of the handbook.
• Whistleblowing policy and procedure — Capita's Whistleblowing policy will apply.
• Flexible Working policy and procedure — Outside of all current arrangements that are in
place and are transferring, Capita's flexible working policy will replace the current Liberata
policy and arrangements.
• Data Protection policy and procedure — These will be replaced by Capita's policies.
Please see the Security and Confidentiality and Data Protection sections of the staff
handbook.
• Restriction of Activities — Staff transferring to Capita will be able to carry out any political
activities as any other citizen.
• Professional and Academic Training policy/MBA policy and procedure — Capita's
Training Framework "Impact" will replace the Training and Development opportunities
offered by Liberata. Capita policies in relation to study leave, membership of professional
bodies and qualification training will be applicable. Any existing arrangements that are in
place at the point of transfer will be honoured.
• Bonus Schemes - Capita's approach to discretionary bonuses will apply post transfer
• Car Scheme Policy — Those who currently have a company car or allowance will continue
to have that entitlement. Car allowances will transfer at the current rate for a period of
three years at which date they will be reviewed. Cars will be replaced on expiration of the
lease. Capita's car policy will apply.
n Mileage Rates — At the point of transfer, Capita's business mileage rates will be applied.
For employees using their own car, currently, the first 10,000 business miles are paid at a
rate of 40p per mile, 25p per mile thereafter. Employees using their own cars for business
mileage must ensure that their cars are adequately insured for business (Class 2) and
private use and are properly maintained and road-worthy at all times. For employees
eligible for a car/car allowance, Capita's business mileage rates will be applied, in line
with HMRC rates.
n Recruitment and Selection policy and procedure — Capita's approach will apply.
n Time off for Public Duties policy and procedure — Capita's approach will apply.
• Smoking at Work policy and procedure — Capita's policy will apply.
• Gifts — Capita's policy will apply.
• Employee Introduction Bonus Scheme — Ongoing payment plans will continue. No
bonuses will be awarded for referrals post transfer.
• Council Tax Deductions — Employees will be able to continue to pay their
council tax via
Capita's payroll for the current council tax year. From the new tax year (April
09)
employees will need to make alternative arrangements.
• Season Ticket Loan policy — Capita's arrangements will apply.
• Relocation — Capita's policy to apply
• Retirement policy and procedure - Capita's procedures will be followed,
please refer to
the Employee Handbook.
• Dress Code — Capita's approach will apply, in line with what is required
for the workplace
and the work undertaken. Employees must be clean, tidy and with good
personal hygiene.
Please refer to the Employee handbook.
• Special Leave — Capita's policy will be followed. Please refer to the
Working hours and
leave sections of the handbook.
• Mobile Telephone policy and procedure - Capita will provide those
employees who
require a mobile phone/internet access where there is a business need. Capita's
Phone
Policy will apply.
• Employee Assistance Programme — This scheme will not transfer and
Capita's
approach in line with the open door policy supported by occupational health
services
through Capita Health Solutions will apply. Any transferring employee
currently using the
existing Employee Assistance Programme will be able to complete any
counselling that
they are undertaking up until March 2009.
Terms:
• Pay Date — Staff will be paid on the 27th o f each month or the preceding working day
where this is a weekend or Bank Holiday and circa 201' December.
• Job Security — There is a no compulsory redundancy clause in the commercial
contract
affecting
group of staff.
Future Arrangements for Benefits:
• Personal Accident Insurance — Transferring employees will benefit from Capita Group
Personal Accident Insurance cover whilst on company business
• Business Travel Insurance - Transferring employees will benefit from Capita Travel
Insurance cover whilst on company business.
• Pension Scheme — Broadly Comparable Pension schemes have been offered to
transferring employees.
• Long Term Disability (LTD) Scheme - Those who are currently eligible to the LTD
Scheme will transfer to Capita's equivalent PHI scheme. Those currently absent and
claiming will continue to receive benefit.
• Discount Schemes — All employees will be eligible to access 'Capita Value' - a wide
range of discounted goods and services. Included within the range are discounts on
household equipment, cinema tickets, family attractions, CDs, travel, hotels, magazines
and health club memberships.
• Capita Share Schemes - Capita operates two Share Plans, 'Sharesave' and 'Capita
Share Ownership Plan' (CSOP). Both schemes will be open to transferring permanent
employees.
• Dental Insurance — All transferring staff will be eligible to join the Capita RSA Dental
Plan
at anytime of the year.
• HealthCare Cash Plan — All transferring employees will be eligible to join the Capita
HSA
Healthcare cash plan at anytime of the year.
• Childcare Vouchers — Capita's childcare vouchers scheme provided through Fideliti
will
be replace the current scheme and will be available to all staff post transfer. Staff may
contribute up to the agreed Inland Revenue salary sacrifice limit.
• GAYE- Capita's arrangements will be available to employees.
• Sports Club/Shop Steward deductions via payroll — These will cease on transfer.
• Parking - Current arrangements will continue. Capita will set up deductions through
payroll for those parking spaces that are currently paid for by cheque
For completeness, I outline below those terms and conditions that will transfer without
change:
• Continuous Service
• Annual Leave Entitlement
• Salary
• Salary Review Date
• Salary Protection as a result of Job Evaluation
• Grading structure
• Outstanding pay awards
• Hours of work
• Mobility
• Restrictive covenants
• Notice periods
• Probationary periods
• Overtime
• Market Forces supplements
• Call out/Standby payments
• Shifts and Shift pay
• Sick Pay entitlement
• Flexi-time
• Current flexible working arrangements, including home working
• Maternity and adoption leave entitlements and pay
• Paternity leave entitlements and pay
• Parental leave entitlements and pay
• Redundancy payment provision will transfer
• Life Assurance multiple of four times salary
• Normal Retirement age
• Private healthcare — contractual entitlement
• Westfield health cash plan — current members will be able to continue to make deductions
via payroll
• Free vending/trolley service



Capita challenged the incremental pay progression & separate salary
increase mechanism post transfer – NOT INCORPORATED INTO
CONTRACTS OF EMPLOYMENT
Wanted to apply only performance related pay for progression – virtually
impossible for staff to progress to top of grade
UNISON legal advice was bleak

Incorporation of pay & grading into contracts in transferor pre-transfer was unclear
 Minimal prospect of pursuing breach of contracts claims on that basis
 Transferee would have strong chance of successful ETO defence based on unforeseen
costs of a pay and grading scheme they did not expect to operate
 Therefore, no realistic chance of a successful legal challenge for us

A new pay & grading scheme based on PRP principles and with lower
salary max in each grade had to be negotiated with Capita
Post TUPE
TUPE protection
TUPE challenges
TIME
Statutory consultation
rights – diminish over
time



Increasing number of challenges to TUPE
protection
How robust is TUPE protection?
No matter how robust the legal position is –
our own TU organisation & strength is crucial



TUPE protects employee contractual T&C’s at
point of transfer
There are NO time limits to protection
Employer can change T&C’s after transfer IF:
▪ Economic/Technical/Organisational (ETO) reason
connected with the TUPE transfer (must involve
changes to the whole workforce – job function, no’s)
▪ For a change unconnected with the transfer

Strong case law that harmonisation of terms
and conditions is a breach of TUPE


Increasing examples of situations where
TUPE protection is being challenged
Let’s play TUPE or not TUPE
A local authority transfers 60 staff from Children’s
Services to Charity X under TUPE with all of their
main contractual T&C’s protected
 After 10 months Charity X announces its intention
to move the TUPE staff onto its own, inferior pay
and conditions
 It argues:

 It is finding it difficult to administer different sets of pay
& conditions
 It is unfair to have some staff on better pay &
conditions doing the same job

TUPE or NON TUPE?
 TUPE
Charity X holds multiple local authority & NHS contracts,
employing staff on a range of different TUPE protections, as
well as new starters on its own T&C’s
 It announces proposals to move all staff – TUPE & non-TUPE
onto a common set of new harmonised conditions – with
dismissal & re-engagement for those that refuse
 Its justifications are:

▪ Impending insolvency due to the pass through of government austerity
cuts by local authorities & the NHS – the TUPE costs are the main costs
▪ No other way in which to make cost reductions
▪ Unfair to have different pay & conditions for people doing the same job –
hence the desire for harmonised terms & conditions
UNISON has reviewed its accounts & accepts that it is facing
insolvency
 The TUPE staff are the main group of staff adversely affected
 TUPE or NON TUPE?


NOT TUPE



TUPE is very valuable at protecting workers
rights
BUT – it comes with limitations
UNIONS MUST:
 Maximise the legal protection it provides by engaging
fully throughout the TUPE process
 Build effective TU organisation to deal with TUPE
challenges industrially as well as legally
 Understand – “the die is already cast” when formal
TUPE consultation starts

SO………… back to the time-line
PreProcure
ment
Needs
Assessment
Moves to Procurement
Service Review
SIPS
Options Appraisal
Contract advert
Tender process
Contract evaluation
Contract award
TIME
No formal TU consultation rights




No formal consultation rights – Major problem
Decisions here shape TUPE/Non-TUPE & most
of the post transfer employment landscape
Unions must organise/lobby to occupy this
territory
Difficult – but not impossible – we did it with:
 TUPE 2006 to secure rights above the Acquired
Rights Directive
 Secondment/retention of employment model (ROE)
 TUPE Plus agreements
 Cabinet Office statement on non TUPE public
transfers
The future looks bleak
Government is currently consulting on changes
to TUPE under its “Red Tape Challenge”.
 Gov view that UK TUPE regulations “Gold Plate”
the EU Acquired Rights Directive” and act as
barrier to business.
 Real purpose is:


 to encourage wider and faster public sector
outsourcing
 to facilitate reductions in labour costs post transfer

This quote from the BIS consultation
document is revealing:
“It can be very hard when outsourcing a service for a
transferee to introduce efficiencies and operate more
cheaply than the transferor because the regulations
act as a barrier to reducing the size of the workforce
or the transferred workers’ pay levels.”
Dismissals
“It can be difficult to harmonise the terms and
conditions of the newly acquired workforce with the
transferee’s existing workforce.“
Pay &
conditions cuts

Service Provision changes
 Repealing the 2006 TUPE provision which includes




most service provision changes within the scope of
the regulations
Will exclude many contracting out transfers from
TUPE – opens public sector to wide scale outsourcing
with no TUPE protection
Will bring greater legal uncertainty to whether TUPE
applies – pre 2006 multi-factoral test
Will politicise outsourcing further and generate
industrial relations disputes
Great uncertainty for staff caught up in outsourcing

Loosening restrictions on
 changes to terms and conditions
 protection against dismissal

Economic, Technical or Organisational
issues
 Bring work relocation into scope – will allow
employers to move work to new locations
without triggering unfair dismissal TUPE
protection

Post transfer harmonisation of terms and
conditions
 To enable transferee to put transferred staff on its




own employees T&C’s
Prime purpose is to facilitate reduction in labour costs
post transfer
Likely to mean cuts in pay and conditions for
transferred staff
Could be breach of Acquired Rights Directive
Alemmo Herron v Parkwood ECJ decision will be
important – static or dynamic TUPE link





TUPE is a valuable employment protection
mechanism
BUT – increasing challenges to the mechanism & the
protection it provides
Trade Unions must engage fully in TUPE issues – vital
to ensure transferring staff are as fully protected as
possible
Trade Unions will need to build more effective
organisation for industrial responses to respond to
TUPE deficiencies and proposed changes
Trade Unions must organise/campaign/lobby against
weakening of TUPE AND for formal TU involvement in
early stages of procurement & commissioning under a
future government
Available from
UNISON
Bargaining
Support or
download from
UNISON web
ALSO
TUPE branch
training
From LAOS