The Channel logo

Features

By | SA Mathieson 19th November 2013 09:58

Company selling you out? You've been TUPE-ed

A survivor's guide to being sold down the river...

Everyone on your team is called into an obligatory meeting by the boss, and no one knows what it’s about. Just for once, there really is something worth hearing: your manager announces that you and everyone you work with are on your way out.

But there’s nothing to worry about, because your jobs are being moved to a new employer. You are about to be TUPE-ed – that is, become subject to the Transfer of Undertakings (Protection of Employment) Regulations 2006.

It’s a process that technology staff are more likely than many to experience, whether through outsourcing or the corporate wheeler-dealing to which IT is particularly susceptible. It may work out or it may not, but it is going to change your working life. To adapt the old advert for fluorescent-orange fizzy pop, you’ll know when you’ve been TUPE-ed.

According to Ben Marshall, national secretary for communications, media and digital at trade union Prospect, the best you can hope for is to get through it unscathed: “I can’t think of circumstances where TUPE transfers have enhanced people’s career circumstances,” he says. “The whole business is a bit like slave-trading, to be honest.”

"I can’t think of circumstances where TUPE transfers have enhanced people’s
career circumstances..."

Things can go wrong – although if you know your options and your rights, there’s a good chance they won’t.

So don’t panic (although feel free to have a drink). Then read on.

Your new boss can't cut your pay, holidays and job

TUPE aims to do what it says on the legislation, and protect employment. If a part of an organisation is sold to another organisation, or a group of staff are transferred due to outsourcing, then the new employer can’t normally change contractual terms and conditions. That means your pay, holiday entitlement and period of continuous employment should be safe, as any change would represent a breach of contract.

After the transfer, any changes to your contract require an economic, technical or organisational (ETO) justification unconnected to the transfer. If your employment is being transferred to another organisation and TUPE is NOT mentioned, you should ask why. Managerial ignorance and mistakes, on this issue and on others, are always a possibility – many line managers will have had as little experience of the process as their staff.

An acknowledgement that TUPE is governing a transfer is essential, but is only the start. “TUPE doesn’t provide a cast-iron guarantee of future employment,” warns Edward Cooper, national practice group leader for law firm Slater&Gordon. The ETO justifications mean that a firm that already has too many staff, then transfers some in through TUPE, may be able to use this as a way to cut jobs among those transferring, although legal action could result. “It doesn’t protect jobs per se, it goes some way towards doing that,” Cooper summarises.

Your new bosses can cut your pension... and worse

Many things are not covered by TUPE, usually including employer pension contributions, although pension rights earned up to the time of transfer should be safe. If your pension is provided by your current employer through a trust, it’s unlikely to be continued; if the pension scheme is contracted out, it may be. Pension arrangements should certainly be high on the list of things to investigate.

Your new employer might offer an equivalent pension, or a better one, but it may also be worse. The same is true of benefits including childcare vouchers, flexible working arrangements, office location and even where you get to park your car or bicycle. You can ask to have current arrangements matched – and you or your representative should – but you don’t have a right to any of them.

If you are transferring from one big company to another, there’s a good chance that things will go fairly smoothly. Prospect’s Ben Marshall says that the union has a matrix of benefits covering the likes of BT and O2, so when its members are being transferred it simply contacts the new employer with a list of benefits and asks how it plans to meet them.

Some haggling usually follows – unlike BT, most firms are not geared up to offer their staff free broadband – and alternatives or cash buy-outs are often proposed. Fiona Martin, head of employment law at Martin Searle Solicitors, adds that problems are more likely to arise with transfers to smaller firms, with less experience of handling transfers and fewer staff benefits.

Getting some help

This is a very good time to be in a trade union, a professional association or other body that provides its members with legal advice on their professional lives. If you are currently in a company that recognises a union for your division, then it is likely that the negotiations will go through that organisation, regardless of whether everyone covered is a member.

But if a union is not recognised, or even if it is and you want personal advice, then it’s a bit late to join. Ben Marshall says joining after a transfer has been announced is like trying to join the AA after you’ve broken down: “We don’t deal with pre-existing conditions,” he says.

And even if you are covered by a union, don’t expect miracles. Ben Marshall adds that, while unions have a lot of experience of dealing with TUPE, it’s very unlikely they can stop a transfer. Employers have to consult with staff affected by a transfer, with legal action possible if they don’t.

But don’t expect a negotiation: according to Fiona Martin of Martin Searle Solicitors, “it’s more information than consultation”. The process takes place with the existing employer, not the new one, although representatives from the latter may be involved.

This can be particularly daunting when an employer doesn’t have a union or equivalent body to talk to, and the affected staff have to organise or elect their own representatives. Edward Cooper says that if there isn’t a union available, employee representatives may want to take legal advice: “If they don’t have the benefit of that, they are left probably for the first time in their lives with a set of issues they haven’t faced before. Employers are not always prone to help them, for obvious reasons.”

Whether or not you act as a rep, you can help. There may be a moment in a TUPE process which sees all the team gathered in a room, trying to decide what to do about the likely loss of pension payments, bike racks or even free massage Friday. You may or may not share a union, or even much of a group identity. Even so, you would still be wise to stick together, unless you completely disagree. This is partly because a group that speaks with one voice is more likely to get a better deal from the TUPE process, and any future negotiations, than one that doesn’t. It is also because, if you stay, you will have to work with these people.

Refusing the transfer

As an individual you don’t have many options under TUPE, but you can refuse the transfer. That doesn’t mean you get to stay with your current employer – you can ask, but given they are trying to sell your contract of employment it’s unlikely. Instead, it means your employment ceases when the transfer takes place, but you don’t get a pay-off.

If you definitely don’t want to work at the new place, and/or you have plans about what to do next, it has the single advantage that you will not have to work out your notice period. You could also use it as a threat, but like all threats, you risk having to go through with it or looking like you didn’t mean it.

It’s rarely a good option. “Don’t be premature in saying, I don’t want to work for them,” advises Deborah West, employment partner for IT specialist law firm Temple Bright, adding that affected staff “would be better to transfer then see how the land lies – unless of course they’ve found another job”.

Outsourcing

TUPE has been around a long time, and used to be vague on whether it covered staff moving as a result of outsourcing deals, says Deborah West, but a 2006 update explicitly covers service provision transfers, whether this is staff leaving the firm served, staff moving from one outsourced provider to another or being insourced back again.

She says there have been legal cases over whether someone is covered by such deals: “Simply spending most of your time working for a client won’t be enough for TUPE to catch you.” As a result, many outsourcing companies structure staff in teams dedicated to individual clients, so it is clear who will and will not move if a contract is lost: “If they’ve got any sense, they will organise themselves that way,” she says.

Going to law afterwards

The good news is that some TUPE protection does not expire. “There’s no point in time that the new contractor [for transferred outsourcing] is safe in making changes, if those changes can be linked to TUPE,” says Deborah West.

The new employer can’t harmonise terms, such as levelling down holiday entitlements to the company norm: “Any attempt to change them will be void, even if the employee agrees,” she says. “The new contractor will know they have to tread very, very carefully.”

The bad news is that new employers can either use the ETO exceptions previously mentioned or simply ignore the rules, which for those without a union’s legal service may mean finding a lawyer, usually through a personal recommendation or a first meeting. In some cases this needs to be done quickly; a claim based on a failure by the transferring employer to inform and consult has to be made within three months, says Fiona Martin of Martin Searle Solicitors.

The further bad news is that this is not an area covered by legal aid, unless discrimination has taken place. However, Fiona Martin says that some home insurance policies include legal cover and firms including her own offer a relatively cheap initial consultation. There is also the option of a damages-based agreement – a kind of no-win no-fee arrangement – if litigation results.

Slater&Gordon’s Edward Cooper says that mediation can be a better option: “Litigation is not always predictable, it’s not always successful and it may not lead to the result the individual wants,” he says; winning a case could result in money, but no job. And if someone is funding it themselves, litigation will usually cost thousands of pounds to fight, not to mention the stress: “It’s a last resort.”

It probably won’t feel like it, but this may end up being a good thing While staff transferring can be grateful that TUPE exists at all, an unplanned change of employer is always likely to be disruptive. But it can also be positive, at least retrospectively. It is possible to find yourself going from an organisation where IT is a sleepy backwater to one where it is the main business, opening new career opportunities. Or, if the move is an unhappy one, the experience can motivate you to find a better job, with a cast-iron answer to questions over why you want to move.

What TUPE is unlikely to mean is business as usual. Treat it seriously, know your rights, argue your case (although do so constructively) – and be ready to move on if things don’t work out at the new firm. Good luck. ®

The writer has himself been TUPEd.

comment icon Read 40 comments on this article alert Send corrections

Opinion

Chris Mellor

Drives nails forged with Red Hat iron into VCE's coffin
Sleep Cycle iOS app screenshot

Trevor Pott

Forget big-spending globo biz: it's about the consumer... and he's desperate for a nap
Steve Bennet, ex-Symantec CEO

Chris Mellor

Enormo security firm needs to get serious about acquisitions

Features

Windows 8.1 Update  Storeapps Taskbar
Chinese Buffet self-service
Chopping down the phone tree to scrump low-hanging fruit
An original member of the System/360 family announced in 1964, the Model 50 was the most powerful unit in the medium price range.
Big Blue's big $5bn bet adjusted, modified, reduced, back for more
Microsoft CEO Satya Nadella
Redmond needs to discover the mathematics of trust