TUPE Regulations– It Doesn't Get Any Easier!
PUBLISHED: 16:03 28 November 2012 | UPDATED: 22:26 20 February 2013
For many years employers have been grappling with the TUPE Regulations. They have evolved significantly over time, but applying them still creates its difficulties.
TUPE Regulations It Doesnt Get Any Easier!
For many years employers have been grappling with the TUPE Regulations. They have evolved significantly over time, but applying them still creates its difficulties. Nigel Tillott, Head of Employment Law at Davies and Partners, Gloucester highlights what employers should consider following a transfer.
One of the latest employers to fall foul of the Regulations was Manchester College. It was involved in a TUPE transfer which brought 1,500 new employees into the College. Six months later it began a restructuring process which involved 300 redundancies. The College was experiencing funding difficulties and as well as making the redundancies, it wished to vary terms and conditions of employment, rationalising the 37 different Employment Contracts that it had to administer, but also significantly cutting pay.
Two employees were told that they were safe from the redundancy process but were later informed that the business wished to vary their contracts and reduce pay.
The employees rejected the new contracts and were subsequently dismissed but offered new Contracts with new terms and conditions. Following their dismissal they accepted these, but brought Tribunal claims against the College for unfair dismissal.
In reality, an employers ability to vary Employment Contracts following a transfer is very limited. Employers are not permitted to vary contracts with the aim of harmonisation. However, it may be possible to make changes which are not connected to the transfer or where there is, what is technically termed, an economic, technical or organisational (ETO) reason, which entails changes in the workforce.
The longer the time lag between the change in terms and conditions and the TUPE transfer the more likely it is that a Tribunal will conclude that the two events are not connected. However, there are instances where changes made several years after the transfer, have been still been deemed to be connected to the transfer and therefore considered unlawful.
It is also clear that the ETO defence will only be available where there is a change to the number or the functions of the workforce.
In the Manchester College case they lost on the basis that both the Tribunal and Appeal Tribunal believed that the changes to the Contract were linked to the transfer. The ETO defence didnt work because there werent any changes to the workforce and the two individuals concerned had already been told they were safe from redundancy.
The employer argued that it was artificial to make a distinction between the redundancies and the change in terms and conditions and that a holistic approach should be taken. This was rejected. Given the difficult financial position being faced and the need for redundancies, the College may have fared better had it sought to implement the contractual changes and redundancies at the same time.
Either way the case serves as a further reminder to employers to be cautious when undertaking changes following a transfer.