Shetland Islands Council
Health and Social Care Integration
Briefing Paper on TUPE Regulations
Article I.
Introduction
Health & Social Care Integration is being taken forward nationally with the introduction of
new legislation. The Public Bodies (Joint Working) (Scotland) Bill has now received Royal
Assent, April 2014.
As part of looking at an options appraisal for an integrated model for Shetland, it is
necessary to look at TUPE regulations in more detail.
The bill does not require the transfer of staff between the partner bodies for the purposes of
integration but it does contain provisions to permit it. The financial memorandum to the Bill
details that where staff transfers do take place, they will do so under TUPE arrangements.
Article II.
What is TUPE?
The TUPE (Transfer of Undertakings (Protection of Employment)) regulations
protect employees’ rights when the business or undertaking for which they work transfers to
a new employer and provide a structure for the transfer to take place.
In a transfer where TUPE applies, the employees:

jobs transfer over to the new company

employment terms and conditions transfer

continuity of employment is maintained
Article III.
When TUPE applies
There are 2 types of transfer protected under TUPE regulations:

business transfers

service provision changes
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Shetland Islands Council
For the purpose of this briefing paper, business transfer only will be looked at in any detail,
for this will be the only applicable transfer within the context of health and social care
integration. At the time of writing no service provision changes were being proposed.
Article IV.
Business transfers
This is where a business or part of a business moves from one employer to another.
To be protected under TUPE during a business transfer, the identity of the employer must
change. Therefore regardless of model chosen going forward for the integration of health
and social care, TUPE can be applied for the transfer of health and social care staff, if that is
the preferred option
The TUPE Regulations were updated on 31 January 2014. All of the changes are related to
the transfer of service provision changes only.
(a) What happens to employees before and after the transfer?
The regulations place a duty on both the outgoing and the incoming employers to inform and
consult with trade unions/employee representatives regarding the transfer.
This should be done long enough before the transfer to allow meaningful consultation.
It should cover:

That the transfer is going to take place

When it is expected to happen

Why the transfer will take place

Any implications of the transfer on employees, such as working with a new team
using a different IT system,

And, any other actions the new employer might take such as any proposed
redundancies or restructuring.
During the consultation process the employer must consider any issues raised by the trade
union/employee reps.
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Under TUPE, the new employer takes over employees’ employment contracts, including:

all the previous terms and conditions of employment

any failures of the previous employer to observe employees’ rights (so employees
could make a claim for discrimination against the new employer, even if it took place
before the transfer)

holiday entitlement

period of continuous employment - an employee’s start date is the same as before
the transfer, so continuous employment isn’t broken

any collective agreements previously made
It’s a breach of contract if the new employer doesn’t meet the terms of the employment
contract.
Employees can refuse to work for the new employer. This is the same as resigning - they
won’t normally be able to claim unfair dismissal or redundancy pay.
Notice isn’t required. The employee simply tells the employer, or the new employer, before
the transfer happens. Employment then ends at the time of the transfer.
If an employee’s working conditions are significantly worse because of the transfer, they can
object to the transfer, or resign and claim unfair dismissal.
(b) Changing an employment contract
TUPE regulations mean employees shouldn’t lose their existing employment rights.
Before the transfer
If the employer knows an employee is transferring to another company, they can’t normally
change the employee’s terms and conditions to make them the same as those of the other
company - even if the employee agrees to the change.
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Shetland Islands Council
After the transfer
The new employer can’t change an employee’s terms and conditions if the reason is the
transfer itself. The new employer can change an employee’s terms and conditions if the
reason is an ‘economic, technical or organisational reason’ involving changes in the
workforce (eg as a result of redundancies or a move from a managerial to a non-managerial
position) and the employee agrees to the change.
An employer can change an employee’s terms and conditions if the reason isn’t connected
to the transfer. When the transfer is complete, employees should make sure they get an upto-date written statement of employment giving the name of the new employer and saying
that their terms and conditions haven’t changed.
Article V.
Positive changes
Employers can improve employees’ terms and conditions if they agree. For example, they
might want to increase the amount of holiday so that it’s the same for everyone.
An employer can’t normally impose changes - they have to be agreed by the employees or
their representatives.
Article VI.
Collective agreements
Collective agreements in place before the date of the transfer will apply. Collective
agreements from the date of transfer won’t apply if the new employer hasn’t taken part in the
process.
Employers can renegotiate terms and conditions in collective agreements after 1 year if the
change isn’t less favourable to the employee.
Article VII.
Pension rights
Employees’ company pension rights earned up to the time of a transfer are protected, but
the new employer doesn’t have to continue an identical pension.
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Shetland Islands Council
Financial Implications with each integration model, via TUPE
Option 1 – Body Corporate;

The Council and the Health Board would each delegate functions and resources to
the Joint Board of the Body Corporate. Service delivery would be through the two
statutory agencies with staff remaining with their current employer. The Joint
Accountable Officer would be responsible for all service delivery and use of the
delegated resources and would report to the Joint Board. Other resources e.g.
capital assets would remain with the current owner.

Financial Implication – £30,167,957 to be transferred to corporate body from NHS
and SIC for Community Health and Social Care, if level and commissioned services
were to remain the same.
Option 2 – Delegation of functions for adult social care services by Shetland Islands Council
to Shetland NHS Board

The Council would delegate all community care services and any other
functions/service areas as agreed to the Health Board. The Health Board and the
Council would work in partnership through the Strategic Commissioning Group to
produce the Strategic Plan. The Health Board as host partner would deliver all the
services in the Strategic Plan including services on behalf of the Council as the
delegating partner.

Financial Implication – Salary costs and employee liability insurance costs to be
transferred in the event of NHS being lead agency = £20,367,910.11 / (19%) of the
total SIC budget.
Option 3 – Delegation of functions for community health care for adults by Shetland NHS
Board to Shetland Islands Council

The Health Board would delegate all community health care services for adults and
any other functions/service areas as agreed to the Council. The Health Board and
the Council would work in partnership through the Strategic Commissioning Group to
produce the Strategic Plan. The Council as host partner would deliver all the
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Shetland Islands Council
services in the Strategic Plan including services on behalf of the Health Board as the
delegating partner.

Financial Implication – Salary costs and employee liability insurance costs to be
transferred in the event of SIC being lead agency = £9,800,047 /(37% of the total
NHS budget)
These costs are inclusive of holiday entitlement and any outstanding claims of discrimination
from previous employers.
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Case study: TUPE in the Public sector
The City of Edinburgh Council:
Successful partnerships are those that value people1
Smooth transition
When The City of Edinburgh Council formed a strategic partnership with BT in April 2001,
people issues were top of the agenda. The fulfilment of the Council’s Smart City vision would
need to see the smooth transition of 174 of its employees to BT. The success of the exercise
is beyond doubt: as demonstrated in 2006 when the original 10-year award-winning
partnership was extended to 15 years.
Tom Aitchison, Chief Executive of The City of Edinburgh Council, says: “The contract
extension has generated cost savings of over £22 million in ICT services. We have been
able to reinvest that money, as a significant contribution to our keeping Council Tax frozen
since the 2007/2008 financial year.”
Invaluable expertise
The scale of the information and communications technology (ICT) outsourcing agreement
underpinning The City of Edinburgh Council Smart City is immense. It covers over 19,000
desktops, 46,000 email accounts, 150 business applications, 250 servers, more than 360
local area network sites, a city-wide metropolitan area network, internet access, intranet
connectivity, and a hosted data centre. However, significant though that is, the Smart City
ethos extends way beyond the provision of ICT shared services. The partnership is
delivering large-scale business transformation projects in departments such as housing,
revenue and benefits, children and families, finance, planning and building services, and
education. Those initiatives are making a real difference to the lives of Council employees
and citizens alike.
1
http://www.globalservices.bt.com/uk/en/casestudy/city_of_edinburgh_tupe
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Shetland Islands Council
Such innovation would simply not be possible without the invaluable knowledge and
expertise of the ex-Council people now working within BT.
Better service
For BT, The City of Edinburgh Council partnership was one of its first major employee
transition exercises.
That valuable expertise has been hard won. Several of the people who transferred from The
City of Edinburgh Council to BT in 2001, via TUPE, make reference to the fact that it initially
took a little time for BT to benefit from their skills and attributes. Among these is Richard
Milligan. Now Head of Service Operations for The City of Edinburgh Programme in BT,
Richard relates: “BT was keen to dice up the service elements and deliver them as
commodities. We helped to show it could be done more cost effectively by using the strength
of the Edinburgh Programme team. That ethos has been successfully carried through into
other local government contracts.”
Michelle Browne, now Applications Support Manager in BT for The City of Edinburgh Council
Programme, agrees. “After a short time BT quickly learned to use the experience of the staff
it acquired.”
John Grzybowski, Head of Service Introduction for BT Local Government Services and an
ex-Edinburgh Council man, is of like mind. “I think BT eventually realised that, in the Council
people who came across, it had acquired some truly valuable assets. Many of us grabbed
the chance to extend and develop our expertise as opportunities arose,”.
Transformation is key
BT showed great empathy in using due diligence to build bridges. Richard Milligan says that
Council people were involved in that process before the outsourcing contract got under way,
which helped to demystify the experience. Stuart Anderson, Lead Programme Architect for
BT in The City of Edinburgh Programme, is another ex-Council player. He adds: “During the
due diligence exercise we worked collaboratively with BT, developing trust and relationships.
This made the transition to BT very smooth, on day one we just continued working with the
same familiar people.”
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Application of TUPE
Turning to the personal dimensions, other powerful aspects of the story emerge. Under
TUPE, people who transitioned to BT retained the majority of their City of Edinburgh Council
terms and conditions including pay scales, annual pay rises, and flexitime. At a later date all
the ex-Edinburgh staff were invited to transfer on a voluntary basis to a BT contract which
included a system of annual bonuses. That suited many; but not all. George Davis, once
System Administrator for The City of Edinburgh Council IT Service Desk and now a Service
Design and Introduction Manager for major and significant projects, explains: “In my case
age played a part in that decision. I decided to stay with my Council terms and conditions
because I can see retirement on the horizon and wanted to remain with a contract suited to
my personal circumstances.
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