TUPE – practical application of
case law
Shantha David, Legal Officer – Solicitor
UNISON Legal Services
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Matters to be discussed today:
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What is TUPE?
What is the difference between TUPE and
COSOP
How do secondments fit in with TUPE
Post transfer variations to contract including
harmonisation.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
WHAT IS TUPE?
Transfer of Undertakings (Protection of Employment)
Regulations 2006 - came into force on 6 April 2006.
TUPE is derived from European Community law, to
fulfil the UK’s obligations under the EC Council
Directive 77/187 (Acquired Rights Directive)
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
TUPE operates to preserve an employee’s
contractual employment rights that the employee
had before the transfer.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
WHAT IS PROTECTED?
•
•
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All the old employer’s rights, powers, duties
and liabilities
Continuous employment
Collective agreements
Recognition
All contractual rights
Match pension contributions
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
When does TUPE apply?
An undertaking
 A transfer of the undertaking
 Retention of identify after the
transfer
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Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
What is an undertaking?
Regulation 3(2):
‘an organised grouping of resources which
has the objective of pursuing an economic
activity, whether or not that activity is central
or ancillary’.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
What is an undertaking cont...
1.
2.
3.
4.
economic objective
organisational framework
the economic entity must be
stable
transfer of whole or part of an
undertaking
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Transfer of the undertaking
For TUPE to apply there must
always be a
‘relevant transfer’
as set out in Regulation 3(1)
of TUPE.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Relevant Transfer
• Transfer of a business or an undertaking
i.e. An economic entity which retains its
identity;
OR
• Service Provision Change (Outsourcing,
Change of Contractor, bring back inhouse).
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Retention of Identity
“multi-factorial test”
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the type of undertaking
whether tangible assets transfer?
the value of intangible assets at the time of the transfer?
whether the majority of the undertaking’s employees are taken
over by the new employer;
whether or not customers are transferred;
the degree of similarity between the activities carried on before
and after the transfer
the period, if any, for which those activities were suspended
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
HENKE exemption
Henke v Gemeinde Schierke [1996] IRLR
701
TUPE does not cover an administrative
reorganisation of public administrative
authorities or the transfer of administrative
functions between public administrative
authorities
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
COSOP
The Cabinet Office Statement of
Practice on Staff Transfers in the
Public Sector (‘COSOP’) has no
statutory basis or force
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Transfer of Undertakings
(Protection of
Employment) (Greater
London Authority) Order
2000, SI 2000/686
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
TUPE OR
SECONDMENT ?
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
RoEM
Retention of Employment
Model
•Celtec Ltd v Astley & Ors C-478/03, EC
•Capita Health Solutions Ltd v McLean [2008] IRLR
595
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
ROEM in practice
1. Follow steps as though TUPE transfer will take
place, including information and consultation.
2. Must be a fixed day for TUPE transfer
3. Employees object to transfer on day of transfer
4. Just after objection, Employees sign up to new
contracts with the Transferor, containing clause
re secondment.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Regulation 4(4), 4(5) TUPE 2006
4 Effect of relevant transfer on contracts of employment
(4) Subject to regulation 9, in respect of a contract of employment that is, or will be, transferred by
paragraph (1), any purported variation of the contract shall be void if the sole or principal reason for the
variation is—
(a) the transfer itself; or
(b) a reason connected with the transfer that is not an economic, technical or organisational
reason entailing changes in the workforce.
(5) Paragraph (4) shall not prevent the employer and his employee, whose contract of employment is, or
will be, transferred by paragraph (1), from agreeing a variation of that contract if the sole or principal
reason for the variation is—
(a) a reason connected with the transfer that is an economic, technical or organisational reason
entailing changes in the workforce; or
(b) a reason unconnected with the transfer.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Post transfer, the new employer
cannot vary a contract if:
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the ‘sole or principal’ reason for the variation relates
back to the transfer; OR
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The reason for the variation is not an economic, technical
or organisational reason entailing changes in the
workforce.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
QUIZ
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Q.1 Can the new employer harmonise the
terms and conditions of those who have just
transferred over?
a. YES
b. NO
c. DEPENDS
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
A.1 = C
Employer can only vary ts and cs post transfer if:
a. It has nothing to do with the transfer
b. There is an economic, technical or organisational
reason entailing changes in the workforce.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Q. 2 Is this variation connected to the transfer?
FACTS
• Prior to the transfer, employees paid full-time,
worked part-time hours
• 3 years post transfer, the employer noticed this.
•
Employees agreed to be paid pro-rata
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
A.2 NO!
Smith & Ors v Trustees of Brooklands College
[2011]
“…real reason for the variation was the respondent's
belief that the claimants had been mistakenly paid at
the full time rate and that as a consequence they
were out of step with the rest of the sector”.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Q.3 Can you vary ts and cs post
transfer in circumstances below?
• Harmonise terms and conditions across 37
difference contracts of employment
• Employees object; are dismissed and are reengaged on harmonised ts and cs.
Is this a breach of TUPE?
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
A.3 YES!
Manchester College v Hazel UKEAT/0136/12 (9
July 2012, unreported)
The fact that others are dismissed for the reason of
redundancy (a change in the number of the
workforce) does not alter the fact that these
employees may have been dismissed for the reason
of harmonisation (not a change in the workforce).
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Q.4 Is a change of location post
transfer a breach of TUPE?
• An employee objects to transfer on the basis that
there is a change to her work location?
•Is this variation to the contract post transfer a
breach of the TUPE Regulations
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
A.4. YES!
•Constructively dismissed under reg 4 (9) of TUPE, because
change of work location was a substantial change in working
conditions to her material detriment.
•Due a redundancy payment
•Unfairly dismissed
Tapere v The South London and Maudsley NHS Trust
[2009] IRLR 972, [2009] ICR 1563
Confirmed in Abellio London Limited v CentreWest London
Buses Ltd UKEAT/0283/11
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Q.5 Were Meter Readers who
were franchisees part of the
workforce?
So was this dismissal unfair?
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
A.5 Hardy v Meter U Ltd
• ET said Yes, unfair dismissal and breach of TUPE
•EAT said NO – not breach of TUPE!
•Case remitted to the ET to decide if dismissal fair,
and if franchise is a sham.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Q.6 Was a failure by the transferee to
honour a term of the contract post
transfer a breach of TUPE? E.g. where that
term relates to a pay increase awarded
under a collective agreement i.e. by a body
outside the contract where the transferee is
not part of the negotiating machinery?
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
A.6 Yes breach of Duty?
CJEU decision on 19 February
2013!
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
REMEMBER NO FACT IS TOO
SMALL!!
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
BIS Consultation on TUPE
•Repealing service provision change
•Post transfer harmonisation after 12 months
•Amend Regulation 4 so it does not allow for a
dynamic interpretation
•Changing the meaning of what is a substantial
change in working conditions to an employee’s
material detriment.
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
BIS Consultation on TUPE cont...
•Amending meaning of ‘entailing changes in the
workforce’ to cover changes in the location of the
workforce.
•A transferor should be able to rely on a transferee’s
ETO reasons entailing changes in the workforce in
respect of pre –transfer dismissals
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Join
UNISON!
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www.unison.
org.uk
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013
Institute of Employment Rights – TUPE Update: Shantha David, UNISON 13 February 2013