So far in our TUPE instalments, we have covered an Introduction to TUPE and an explanation of the ETO exception. If you have missed the previous two TUPE articles, I recommend giving them a read; all together they give you a nutshell guide to TUPE.
The last area that we wanted to consider in this TUPE series is informing and consulting affected employees; providing practical tips and guidance to employers.
What is informing and consulting?
In a nutshell, the answer is quite simple, and even more so when it is broken down into its respective parts. Firstly, let’s consider each requirement in turn.
Informing – what is it?
Employers (both outgoing and incoming) must inform all of their affected employees about the TUPE transfer. This should include reasons as to why the TUPE transfer is taking place.
The ‘affected employees’ not only includes the employees who will actually TUPE transfer, but also any other employees of the outgoing or incoming employer who may be affected by the transfer or any measures to occur due to the transfer.
So what information do employers need to provide?
Whilst there is no legal requirement for the information to be provided in writing, it is good practice to do so. The information provided should include the following:
- The fact of the TUPE transfer, the date (or proposed date) of the transfer and the reasons for the TUPE transfer;
- Any social, legal or economic implications of the TUPE transfer;
- Any measures that the employer (both outgoing and incoming) expect to take in connection with the transfer that will affect those employees. If this is nothing you should say so; and
- If agency workers are used, the number of agency workers engaged, the type of work they are doing and the departments they work in.
Consulting – what is it?
Employers must consult with recognised trade unions or elected employee representatives about measures which they are considering taking for their own employees in respect of the TUPE transfer. These will be measures which have already been identified in the information previously provided (see above).
An employer must discuss and consider the views of the affected employees in a meaningful consultation process before a final decision about changes are made.
Who does an employer need to inform and consult with?
It is not so simple as giving this information to all affected employees. This information should be given to “employee representatives”.
If there is a recognised trade union for the affected employees, the information above should be given to them. If there is no recognised trade union, the employer should provide the information to elected employee representatives. Employers may have existing employee representatives. If not, new ones will need to be specifically elected for the purposes of the transfer.
Employee representatives are elected by employers going through a nomination process followed by a secret ballot. Employees can only consult with affected employees’ directly in two circumstances:
- In a micro-business with less than 10 employees; or
- If the employees fail to nominate any representatives.
Only if the employer invites employees to elect representatives and they fail to do so, can they inform and consult affected employees directly.
It is good practice for employers to keep all affected employees up-to-date with information about a transfer, even where there are trade unions and/or employees representatives in place. I would suggest regular updates to be circulated to all affected employees – Q&A sheets are a particularly good way of doing this.
When do employers need to inform and consult?
There is no legal maximum or minimum period of time by when the information must be delivered to employee representatives. This will mostly depend on the extent of any changes which are likely to take place after the transfer. A more complex or complicated transfer should allow for more time. However, Tribunals are mindful of the often tight timescales involved in commercial transactions that cause TUPE transfers.
Does an employer have to accept suggestions during a consultation?
An employer does not need to accept suggestions made by the employee representatives during consultation, but the employer must go into a consultation with a view to seeking an agreement to the measures envisaged. In practice, this means that employers must negotiate in good faith over the measures it intends to take after the transfer. The obligation to consult must be more than simply giving the appropriate representatives the opportunity to air their views.
If an employer does not reach an agreement with the employee representatives, they should provide business reasons for rejecting their suggestions and explain why; ideally this should be in writing.
What are the risks for an employer if they fail to inform and consult?
Both incoming and outgoing employers must comply with their duty to inform and consult employees regarding a transfer. A failure to inform and/or consult has both commercial and legal implications.
- Commercially – an employer who does not inform and consult with their employees runs the risk of the transfer not being successful. They also run the risk of impacting morale and creating uncertainty in the workplace amongst staff.
- Legally – either or both (ingoing and outgoing) employers can be liable to pay compensation of up to 13 weeks gross pay for each affected employee of the transfer, if a claim is brought in the Employment Tribunal. The exact award granted will be based on the seriousness of the failure to inform and consult.
The above advice should give you a solid understanding as an employer of your obligations to inform and consult affected employees when a TUPE transfer is due to take place.
If you feel like you need any further advice or guidance on any area of employment law, TUPE in particular, feel free to contact the team for a confidential chat.