CIPDEmployment LawSeminar 7 March 2013
Employment Update • Legal Update • Recent Cases Emilie Darwin & Kristine Scott
Collective Consultation • 100+ redundancies - 90 day consultation • 6 April 2013 • Reduce to 45 days consultation • Acas non statutory code of practice
Tribunal Update • Compensation cap now £74,200 • Week’s pay £450 • Proposed overall 12 month cap to unfair dismissal compensation • Issue fees in tribunal – July 2013
End of Employment • Settlement Agreements • Guideline “tariffs” • Statutory code of practice
Other legislative changes • Parental leave increases from 13 to 18 weeks • Draft subject access code of practice • Protection of Freedoms Act • DBS • Biometric
On the Horizon • Proposed new system of shared leave • Fully flexible maternity/paternity leave • Time off for fathers at antenatal appointments • Proposed extension of flexible working
Case Law Update Tayeh –v- Barchester Healthcare Ltd  • Court of Appeal • Tribunal was not entitled to substitute own view of the seriousness of an employee’s misconduct
Case Law Update Bray & Others –v- Monarch Personnel Refuelling  • ET decision • Agency Workers Regulations 2010 • Pay between assignments complied with Swedish derogation provisions
Case Law Update Davies –v- Sandwell Metropolitan Borough Council  • Court of Appeal • Legitimate to rely on final written warning where issued in good faith
Case Law Update Eweida & Others –v- UK  • European Court of Human Rights • 4 cases brought for UK breach of Article 9 of ECHR (right to manifest religious belief) • Upheld Ms Eweida’s claim that UK failed to protect her Article 9 right • Legitimacy and proportionality of uniform policy were key
Case Law Update Eweida & Others –v- UK  • Other 3 claims were unsuccessful • Mrs Chaplin was not allowed to wear her necklace on health and safety grounds • Mr McFarlane refusal to counsel homosexual couples • Ms Ladele refusal to officiate
Case Law Update X –v- Mid Sussex CAB  • Volunteer is not an employee for purposes of discrimination law • Is there a contract?
Case Law Update Lloyd –v- BCQ  • Dismissal of employee receiving PHI benefits • Wording of contract
Holiday and Sick Pay NHS Leeds –v- Larner  • Court of Appeal • Prevented from taking holiday during sickness absence
Case Law Update Aderemi –v- London and South Eastern Railway  • Definition of disability • Standing for long periods can be day to day activity • Focus on what employee cannot do
Managing TUPE Tim Crane, Rachel Roberts and Oliver Daniels 7 March 2013
Programme • General introduction to TUPE including: • What is TUPE? • What and who transfers? • When does TUPE apply? • TUPE process – information, consultation and ELI • Practical application of TUPE
What is TUPE? • The Transfer of Undertakings (Protection of Employment) Regulations 2006 • Acquired Rights Directive • TUPE protects employees in the event of a “relevant transfer”
Aim of TUPE • To protect employees when the work they perform on behalf of one employer is transferred to another employer • Employees’ rights and liabilities transfer from one employer to another
Effect of TUPE • Automatic transfer of employment • Continuity of employment preserved • Automatic unfair dismissal • Obligations to inform and consult
Dismissals and TUPE • A dismissal will be automatically unfair if the sole or principal reason for the dismissal is: • the transfer itself; or • A reason connected with the transfer which is not an ‘ETO reason’ • ‘ETO reason’ means “an economic, technical or organisational reason entailing changes in the workforce”
Fair or unfair dismissal? • Dismissals in a TUPE context generally fall into one of three categories: • Automatically unfair – dismissal due to transfer or for a reason connected with it and no ETO reason; • Potentially fair - dismissal for a reason connected with the transfer but with an ETO reason; • Potentially fair – dismissal is for a reason not related to the transfer at all • Affected employees still require the qualifying period of service of one year (or 2 years from 6 April 2012)
Constructive Dismissal? • Regulation 4(9) – where a relevant transfer involves or will involve: • a substantial change in working conditions • to the material detriment of a transferring employee • that employee may treat the contract as having been terminated • and shall be treated as having been dismissed.
Definition of a TUPE transfer • TUPE defines two types of transfer: • Classic Business Transfer: the transfer of a business or part of a business from one owner to another; and • a Service Provision Change (“SPC”)
Classic Business Transfer • Classic Business Transfer: the transfer of an undertaking or part of an undertaking where there is a transfer of an economic entity which retains its identity; • Economic entity: “An organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary”
What is an economic entity? • Business sales/ purchases: assets, goodwill, employees, premises etc • Sales of the freehold of a property • Transfer of a lease • Change in a franchise • But NOT sale of shares in a company
Retention of Identity • Relevant factors include: • Type of undertaking; • Whether tangible assets transfer; • Value of intangible assets; • Whether majority of employees are taken on; • Whether customers are transferred; • Degree of similarity between activities; • Period, if any, for which activities suspended
Service Provision Change • Activities cease to be carried out by a principal on its own behalf and are carried out instead by a contractor (outsourcing); or • Activities cease to be carried out by a contractor on the principal’s behalf and are carried out instead by a subsequent contractor (second-generation transfer); or • Activities cease to be carried out by a contractor or a subsequent contractor on a principal’s behalf and are carried out instead by the principal (in-sourcing)
SPC conditions • Immediately before the SPC there must be “an organised grouping of employees … which has as its principal purpose the carrying out of the activities concerned on behalf of the client”; • The relevant activities will be carried out after the transfer other than in connection with a single specific event or task of short-term duration; • The activities do not consist wholly or mainly of the supply of goods for the client’s use
What transfers? • Virtually everything • Regulation 4(1): “…any such contract shall have effect after the transfer as if originally made between the person so employed and the transferee” • Transferee ‘steps into the shoes’ of transferor
What transfers? • All existing rights, duties, liabilities and obligations • Includes benefits – holiday pay, sick pay, medical and permanent health insurance, company car, bonus, commission, notice, garden leave etc • Includes terms incorporated under collective agreements • Accrued liabilities and outstanding claims – e.g. equal pay, discrimination, constructive dismissal claims etc
What doesn’t transfer? • Pensions exception; • rights under occupational schemes excepted • employee contributions matched to 6% of basic pay • Insolvency exception (regulation 8) • Criminal liability for transferor’s actions (e.g. for breach of health and safety legislation); • Terms that cannot be replicated • e.g. profit share, share option schemes, staff discount; • “scheme of substantial equivalence”
The process • What must employers tell staff? • When you are required to tell staff? • Who is entitled to information and when? • Election of representatives • Penalties for non-compliance AND • Employee liability information (ELI)
What must employers tell staff? • The fact of proposed transfer and the reason for it • When the transfer will occur • Any legal, economic and social implications • Any action that the employer envisages it will take (or if no measures are envisaged that fact) • Outgoing employer must also inform of measures the new employer envisages
When will consultation be required? • Consultation required if “measures” are envisaged • With a view to seeking agreement to the measures • Responsibility of the employer of the affected employees • “envisages” means definite plans or proposals which would not have happened but for the transfer; not mere hopes or possibilities • No need actually to reach agreement
What are “measures”? • “Any action, step or arrangement” affecting employees: • changes to T&Cs and within T&Cs • redundancies • reporting line changes • reorganisations • relocations • pension changes • salary payment dates
Who is entitled to information and when? • Information in written form to “the appropriate representatives of any affected employees” • “affected employees” means: • any transferring employee • any other employee of the transferor or the transferee who may be affected by the transfer or by measures taken in connection with it • When? Long enough before the transfer to enable old employer to inform and consult in good time
Who are the appropriate representatives? • Representatives of a recognised trade union; or • Where there is no trade union recognition “Employee representatives” who are either; • Existing employee representatives who; • were appointed or elected previously for other purposes AND • have appropriate authority to be informed/consulted in the context of TUPE • To inform/consult employee representatives elected specifically for the purposes of TUPE 2.
Election of employee representatives The employer must; • Take reasonably practical steps to ensure election is fair; • Determine the number of elected representatives sufficient to represent the interests of all the affected employees; • Determine whether the representatives should represent all affected employees or particular classes of those employees;
Election of employee representatives • Ensure candidates are themselves affected employees on the date of the election; • Ensure no affected employee is unreasonably excluded from standing for election; • Ensure votes are secret and accurately counted; • Ensure all affected employees are entitled to vote
Roles of representatives • Similar to collective redundancies • Conduit for information and views • Need (and have a right to) access to affected employees • Facilities and accommodation to do their role. • Legal protection (time off and no detriment)
No election? Where the employer invites affected employees to elect representatives BUT employees fail to do so within a reasonable time: • The employer must give to EACH and EVERY affected employee the relevant information concerning the transfer; • There is no duty to consult (but will in practice)
“Special Circumstances” defence • Allows the employer to circumvent its obligations to inform and consult where it is not reasonably practicable for the employer to comply. • Very limited application.
Penalties for non-compliance • Complaint to Employment Tribunal • Time limit: 3 months from transfer date • “Appropriate compensation” – punitive rather than compensatory • Protective award: up to 13 weeks’ pay for each affected employee • New employer is jointly and severally liable with former employer
Employee Liability Information (1) • Regulation 11 – statutory due diligence • identity and age of all transferring employees • information contained within section 1 statement (pay, hours, holiday, sickness, notice, job title etc) • disciplinary and grievance proceedings • legal action • collective agreements
Employee Liability Information (2) • In writing / readily accessible form • Not less than 14 days before the transfer date • Ongoing duty on former employer to notify new employer of any interim changes • Compensation for failure to comply • Minimum award ordinarily of £500 per employee
Ratatouille • Jean-François is the owner of Ratatouille and Cassoulet, a pair of high class French restaurants. • He is approached by Claude, who agrees to purchase the lease, assets and goodwill of Ratatouille. • Will this sale amount to a TUPE transfer? • What sort of transfer?
Spic ‘n’ Span • Sushi and Sushi, a top London advertising agency, is dissatisfied with its office cleaners, Spic ‘n’ Span. • They are dissatisfied at the standard of cleaning and there has been a recent spate of items going missing from the office. • Sushi and Sushi decides to terminate the cleaning contract and engage an alternative contractor. • Will this trigger a TUPE transfer?