There are regulations in law designed to protect the rights of
employees in a situation where a company is being sold or
transferred which gives employees the right to work under the same
conditions as they did before without losing their period of
continuous employment. The regulations apply to all employees
affected by the changes, whether employed by the proposed or
current employers. The regulations are known as 'TUPE' and
stand for The Transfer of Undertakings (Protection of Employment)
Regulations 2006.
Who's Responsible?
If you think that by selling a business you can walk away from
your duty to your employees then think again! It is the
responsibility of both the current employer and prospective
employer to apply the TUPE procedures and ensure a proper and
meaningful consultation is given to all employees before any
changes take place. So, what do we mean by a 'meaningful
consultation?'. Broadly speaking it should be a 'genuine'
consultation and not simply a tick box exercise. The consultation
should be delivered to either a representative of an appropriate
recognised trade union or elected employee representatives who are
employees of the company. Both the current employer and the
prospective employer have a duty to give one another all relevant
information so that they are both able to meet this
requirement.
What's involved?
So, what information should be delivered in a
consultation? Under the regulations, there is a duty to
disclose specific information including; Why and when the transfer
is going to take place? The legal, economic and social implications
for the employees. Whether the prospective employers intend to take
action which is likely to affect the employees, for example,
re-organisation of the business, and if the previous employers have
knowledge of any such action, to inform the representatives and
employees of those proposals.
How can a business prepare?
A HR Strategy on TUPE must ensure that the change process as a
whole runs as smoothly as possible, that the statutory consultation
process is planned and managed effectively and staff are informed
and involved in the process right from the start. All staff
must be involved, including those on maternity, long-term sick
leave or secondment and any equal opportunity policies and
principles must be upheld at all times. It is also crucial that
staff are given appropriate advice and assistance at all key stages
and a senior manager should be designated to be responsible for
communication.
TUPE does not specify a clear timetable for employers to comply
with the duty to consult. It simply states that information under
the 'Information Duty' must be delivered allowing sufficient time
before the relevant transfer takes place, to enable the employer of
any affected employees to consult with the appropriate
representatives. The tendency is, therefore, to leave the
consultation to the last minute which may not be adequate under the
TUPE guidelines. Failure to build in time for adequate discussion
and genuine dialogue with employee representatives (even where the
legal Consultation Duty does not apply) is likely to be a breach
the TUPE regulations.
Who's Responsible?
If you think that by selling a business you can walk away from
your duty to your employees then think again! It is the
responsibility of both the current employer and prospective
employer to apply the TUPE procedures and ensure a proper and
meaningful consultation is given to all employees before any
changes take place. So, what do we mean by a 'meaningful
consultation?'. Broadly speaking it should be a 'genuine'
consultation and not simply a tick box exercise. The consultation
should be delivered to either a representative of an appropriate
recognised trade union or elected employee representatives who are
employees of the company. Both the current employer and the
prospective employer have a duty to give one another all relevant
information so that they are both able to meet this
requirement.
What's involved?
So, what information should be delivered in a
consultation? Under the regulations, there is a duty to
disclose specific information including; Why and when the transfer
is going to take place? The legal, economic and social implications
for the employees. Whether the prospective employers intend to take
action which is likely to affect the employees, for example,
re-organisation of the business, and if the previous employers have
knowledge of any such action, to inform the representatives and
employees of those proposals.
How can a business prepare?
A HR Strategy on TUPE must ensure that the change process as a
whole runs as smoothly as possible, that the statutory consultation
process is planned and managed effectively and staff are informed
and involved in the process right from the start. All staff
must be involved, including those on maternity, long-term sick
leave or secondment and any equal opportunity policies and
principles must be upheld at all times. It is also crucial that
staff are given appropriate advice and assistance at all key stages
and a senior manager should be designated to be responsible for
communication.
TUPE does not specify a clear timetable for employers to comply
with the duty to consult. It simply states that information under
the 'Information Duty' must be delivered allowing sufficient time
before the relevant transfer takes place, to enable the employer of
any affected employees to consult with the appropriate
representatives. The tendency is, therefore, to leave the
consultation to the last minute which may not be adequate under the
TUPE guidelines. Failure to build in time for adequate discussion
and genuine dialogue with employee representatives (even where the
legal Consultation Duty does not apply) is likely to be a breach
the TUPE regulations.
Failure to conduct a proper consultation results in liability
for the payment of compensation which may be up to 13 weeks'
pay. The new and old employers are both liable for any award of
compensation made by an employment tribunal for failure to inform
and consult.
If your business is contemplating a transfer which is likely to
be caught under the TUPE regulations then you should seek expert
Employment Law advice to ensure that you are compliant with the
regulations.
If you would like further information and guidance on the
employment law, HR or any other matter the ACUMEN
BUSINESS LAW Employment Team will be happy to meet with you.
Please contact us on 08458 678978 or visit our website: www.acumenbusinesslaw.co.uk.
Ruby Dinsmore Head of Employment ACUMEN BUSINESS
LAW