TUPE Update (ELG Conference 1 June 2012)

Presentation by Morag Hutchison

Employment Law Group Conference 2012

1 June 2012

TUPE Update

Burness

Edinburgh \ Glasgow

Burness

Edinburgh \ Glasgow

The basics

(17%)

SPC: Activity

(22%)

SPC: Fragmentation

(5%)

SPC: Organised grouping

(17%)

SPC: Identity of client

(5%)

ETO: Dismissal

(17%)

Change to terms and conditions

(8%)

Government consultation

(9%)

Burness

Edinburgh \ Glasgow

The basics SPC: Activity SPC: Fragmentation



ETO: Dismissal



SPC : Activity•Acco

mmodation for asylum seekers

•Sufficient if activities “fundamentally or essentially the same”

Metropolitan Resources Limited v Churchill Dulwich Ltd (2008)

•Re-tendering of catering contract

•Activities “wholly different”

OCS Group UK Ltd v Jones

(2009)

•Provision of IT services

•Significant differences in activities

Enterprise Management Services v Connect-Up

Ltd (2010)

Burness

Edinburgh \ Glasgow




ETO: Dismissal



SPC : Activity

Identify activity Identify organised

grouping of employees

Are employees assigned

Argyll Coastal Services v Stirling & Others (2011)

Lady Smith: An organised grouping of employees must be a grouping deliberately put together by the transferor to carry out the particular activities required.

Burness

Edinburgh \ Glasgow




ETO: Dismissal



SPC : Activity

•Closure of care home

•Activities “fundamentally different”

Nottinghamshire Healthcare NHS Trust v

Hamshaw

(2011)

•Taxi bookings taken back in house

•“Holistic assessment” required

Johnson Controls Ltd v Campbell

(2012)

Burness

Edinburgh \ Glasgow




ETO: Dismissal



SPC : Fragmentation

Enterprise Managements Services

Connect-Up Ltd Contractor 4 Contractor 3

Contractor 2

Contractor 1

…lost contract for IT services to Schools

Enterprise Management Systems v Connect-Up Ltd (2010)

Where is it not possible to identify the destination of the activities because they do not have a distinct identity there is unlikely to be a SPC.

Burness

Edinburgh \ Glasgow




ETO: Dismissal



SPC : Organised Grouping

•Employee in PR agency spent 70% of time on contract for a particular client

•Was an organised grouping of employees

Hunt v Storm Communications

(2006)

•Britannia Building Society branch mortgage referrals transferred to different firm

•Organised group whose principal purpose was branch referrals

•Two out of six employees transferred

Royden and other v Barnetts Solicitors

(2007)

•Day shift and night shift warehouse staff

•Day shift worked principally on Vion contract

•Not organised grouping – spent time on Vion contract because of shift pattern - no deliberate planning or intent

Eddie Stobart Ltd v Moreman

(2011)

•Freight forwarding and management logistics

•“Inbound” and “outbound” goods teams – employee in outbound team and spent 100% of time working on Seawell account

•Not organised grouping – needs a deliberate putting together of employees - not a matter of “happenstance”

Seawell Ltd v Ceva Freight (UK) Ltd

(2011)

Burness

Edinburgh \ Glasgow




ETO: Dismissal



SPC : ClientW

G L

td

WG Ltd W

G L

td

WCP

Avi

va/R

ecei

vers

King Sturge

• TUPE only applies where activities carried out before and after the change of contractor are carried out on behalf of the same client.

• No need to adopt purposive approach as SPC provisions do not originate from the ARD.

Hunter v McCarrick (2010)

Burness

Edinburgh \ Glasgow




ETO: Dismissal



ETO: Dismissal

Meter U Ltd v Ackroyd (2011)Franchise

Meter U Ltd

Franchise

Franchise

Franchise

Franchise

Customer/

ContractorMeter U

Ltd

“Workforce” does not include franchisees so change in workforce and ETO reason for dismissal

Burness

Edinburgh \ Glasgow




ETO: Dismissal



ETO: Dismissal

• Repudiatory breach of contract

• Substantial change to material detriment

Resignation is dismissal where...

• Change in numbers• Change in job function

Automatically unfair if no ETO reason entailing

change in workforce

Burness

Edinburgh \ Glasgow




ETO: Dismissal



ETO: Dismissal

•Based in Birkenhead and offered role in Southport (22 miles)

•CUD claim and “substantial change” claim

•Automatically unfair as no changes in the workforce

Royden v Barnetts Solicitors

(2007)

•Move from Camberwell to Beckenham (8 Miles)

•Impact of change to be considered from employee’s perspective

Tapere v South London and Maudsley NHS Trust

(2008)

•Relocation of 6 miles was a substantial change

•Automatically unfair as no changes in the workforce

Abellio London Ltd v Musse

(2011)

Relocation: No change in numbers

• Could increase in numbers be a change in the workforce?

• Argue change in numbers and therefore workforce at original location?

Burness

Edinburgh \ Glasgow




ETO: Dismissal



ETO: Changing t&c’s

Enterprise Managed Services Ltd v Dance & others

(2011)

• Changes after transfer to improve performance and efficiency not connected with the transfer

Smith v Trustees of Brookland College

(2011)

• Reduction in salary after transfer due to mistakenly paying full-time salary for part-time work not connected with the transfer

Burness

Edinburgh \ Glasgow




ETO: Dismissal



Government Consultation

Have changes provided greater

clarity/transparency?

More litigation/higher impact on small & medium employers

If parties agree RoE could be allowed

Unlikely that SPC provisions will change

Do transferors comply with ELI

obligation?

Provisions not helpful

Mirror collective consultation timescales

May see obligation to provide earlier – at tender

stage?

Likely to see increase in information to be

provided

Is lack of ability to harmonise a

significant burden?

Point of TUPE to protect employees on point of entry

Allow if collective agreement/ee reps with cooling off period

Employees not allowed to “cherry pick”

Change difficult due to ARD

May be some “tinkering” around the edges

Burness

Edinburgh \ Glasgow




ETO: Dismissal



Government Consultation

Should professional services be excluded?

Difficulty will be defining who is

covered by professional services

Government revisiting

May remove from SPC but not

business transfer

Would additional guidance on an ETO reason be

helpful?

Helpful if clarification in relocation that

reduction at a particular place is change in numbers

May see some change to deal with relocation

issue

Interaction between TUPE and

redundancy consultation

Practical issue : cannot commence

redundancy consultation until

after transfer

Possible amendment to allow transferee to attend pre-

transfer consultation meeting

May allow “30/90” day clock to start before transfer

Burness

Edinburgh \ Glasgow

Q A

Morag Hutchison +44 131 473 6029 [email protected]

@BurnessEmplaw @MoragHutchison

Burness

Edinburgh \ Glasgow

Documents

TUPE Update (ELG Conference 1 June 2012)