UNDERSTANDING TUPE AND HOW IT AFFECTS EDUCATION

Mary Siddall, Springhouse Solicitors

How TUPE Works

• TUPE = Transfer of Undertakings (Protection of Employment) Regulations 2006

What Does TUPE Do?

• Transfers the contracts of employment from the ‘transferor’ to the ‘transferee’ as if the new employer steps into the shoes of the old one and inherits all their responsibilities

How TUPE Works

• It will protect employment rights in 2 situations:– Transfer of an economic entity that retains its

identity– Service provision change

Derives from EU legislation

Transfer of an Economic Entity

• Transfer of an ‘undertaking’ or part of an undertaking

• ‘Economic entity means an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary’

• ‘Public and private undertakings engaged in economic activities whether or not they are operating for gain’

Examples of transfer of economic entity

• Sale of business as going concern• Lease which takes with it the right to carry on

a business• Transfer of programme or course to another

educational establishment• Spin out of economic activity from HEI to a

new company

Points to Note

• Does not apply to a sale of shares• No need for agreement between parties• Can be a series of transactions• Can apply where no transfer of assets at all

Case Study 1

• Wessex University offers undergraduate and masters programmes in babylonian studies. The University wants to close the programme, but the University of Castlebridge has expressed an interest in taking over the course and offering it to students

Service Provision Change

• This applies where:– There is an ‘organised grouping of employees…

which has as its purpose the carrying out of activities concerned on behalf of the client; and

– The client intends that the activities will, following the service provision change, be carried out by the ‘transferee’

Service Provision Change

• Who is the transferee?• First generation contractor on a tender• Second generation contractor following re-

tender (so TUPE operates between the first and second generation contractors)

• The University/client if the work comes back in-house

Examples of Service Provision Change

• College contracts out a service• Schol appoints a new contractor following a

re-tender• Transfer of research funding? Research team

vs sole researcher?• University is commissioned by government

department to provide a service

Case Study 2

• For years, the University of Sotonia has purchased its supply of biscuits from a local company, Short Bread and Co. This company employs a team of staff dedicated to producing the dolphin-shaped biscuits. Following a rebranding exercise, the University decides to tender out its biscuit purchasing requirements and the contract is awarded to Jammy Dodger Limited

Case Study 3

• A PI at Imperial obtains funding for a 3 year research project and engages 2 research assistants. A year into the contract, the PI decides to move to Dundee and take the funding and project with him. Imperial argue that Dundee have to take the two RA’s as well under TUPE

Effects of TUPE

• On transfer, all rights and obligations of employees transfer to the transferee

• On the same terms and conditions• Continuity of employment is transferred along

with accrued service rights• A dismissal connected to the transfer is

automatically unfair

Points to Note

• Transferee may be able to dismiss staff if it has an ‘economic technical or organisational reason’ e.g. redundancy

• Transferee cannot vary or harmonise terms and conditions of staff who come across save for an ETO reason

• Note recent CJEU confirmation of the ‘static’ interpretation of collective agreements as opposed to dynamic

Can an Employee Prevent Themselves From Being Transferred Under TUPE?

• Employee has right to object to transfer but will be treated as having resigned

• Employee may also have a claim if the transfer would involve a ‘substantial change in working conditions to [his] material detriment’

• Ordinary constructive dismisssal rights also apply

TUPE Dismissals

• Effect of TUPE is that no dismissal takes place –so for example, employee is not entitled to redundancy payment from old employer

• Pre-transfer dismissals are likely to become the responsibility of the transferee

• Transferee may be able to dismiss for an ETO reason but must act fairly NB note the ‘enlarged pool’ for redundancy

Information and Consultation

• Recognised Trade Unions [or employee representatives if none] must be given information about the proposed transfer, the reasons for it, the date of transfer and other information

• There must be consultation with Trade Unions where the transferee envisages changes to the employee’s role post-transfer e.g. redundancies, reorganisation or relocation

Employee Liability Information

• At least 14 days before transfer, the transferor must supply information about:– Identity and age of employee– Terms of employment– Disciplinary actions and grievances– Claims or potential claims

Claims For Failure to Consult/Provide Information

• Up to 13 weeks pay per employee for failure to inform and consult

• At least £500 for failure to supply employee liability information

Practical Points

• Tender documentation needs to deal with possible TUPE implications; both in relation to first generation contract (where contractor may inherit staff) and second generation (where you want to ensure that first generation contractor will supply information

• When putting in a bid, consider whether TUPE is a possibility – are there employees elsewhere who are currently carrying on these or similar activities?

• Make use of expertise available a ‘project team’ may be needed

TUPE and Tendering

Contracts should have re-tendering provisions to ensure existing providers present TUPE information to the University in a timely manner prior to the expiry of the contract.

Provide information on staff terms and conditions to bidders, but bear in mind duty of confidentiality under the Data Protection Act 1998

TUPE Information

• full list of employees to be transferred - age, gender, identities and job titles

• details of untaken leave and any carry-forward arrangements

• remuneration, continuous service and place of employment

• details of bonus schemes or other key employee benefits

• employees who are away on sick leave, maternity or paternity leave

• details of any outstanding claims or disputes• details of recognised trade unions and

facilities arrangements