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TUPE: Session 3

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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 articles, click here to download them all as a nutshell guide.

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?

The answer to this is quite simple, and even more so when it is broken down into its respective parts. Firstly, let’s consider the each requirement in turn.

1)    Informing

What is it?

Employers (both outgoing and incoming) must inform the appropriate representatives of their affected employees about the TUPE transfer. This should include reasons as to why the transfer is taking place.  For more information on appropriate representatives see below.

The ‘affected employees’ not only includes the employees who will actually 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?

The information provided to the appropriate representatives should be given in writing and include the following:

  • The fact of the transfer, the date (or proposed date) of the transfer and the reasons for the transfer;
  • Any social, legal or economic implications of the transfer;
  • Any measures that the employer (both outgoing and ingoing) expect to take in connection with the transfer that will affect those employees. If there are no proposed measures then 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.

2)    Consulting

What is it?

The duty to consult only arises where an employer envisages taking measures in relation to affected employees.  Employers must consult with the appropriate representatives (see below) about measures which they are considering taking for their own employees in respect of the 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 before a final decision about changes are made.

Does an employer have to accept suggestions during a consultation? 

An employer does not need to accept suggestions made by the employees, but the employer must go through a consultation process with a view to seeking an agreement on the measures envisaged. In practice, this means that employers must negotiate in good faith over the measures it intends to take. The obligation to consult must be more than simply giving the appropriate representatives the opportunity to air their views, it should always be meaningful.

If an employer does not reach an agreement with the employee’s representatives, they should provide business reasons for rejecting employee suggestions and explain why; ideally, this should be in writing.

Who are the appropriate representatives?

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 employee representatives elected by the affected employees.  Employers may have existing employee representatives such as a staff forum/council, 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 in order to elect the representatives. Only if the employer invites employees to elect representatives and they fail to do so, can they inform 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 employee representatives in place. We would suggest regular updates to be circulated to all affected employees.

If an employer has less than 10 employees overall they are not required to elect an employee representative where there is currently no existing trade unions or elected employee representatives. However, the employer must still inform and consult directly with each individual employee regarding the transfer. Where there is already a recognised trade union or employee representative in place, they must be consulted.

How long should consultation take? 

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 by a 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.

What are the risks for an employer if they failure to inform and consult?

Both incoming and outgoing employers must comply with their duty to inform and consult employees.  A failure to inform and 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 uncertainty in the workplace amongst staff.
  • Legally – both employers could be liable to pay compensation for up to 13 weeks gross pay for each affected employee of the transfer if a claim is brought in the Employment Tribunal. The 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 obligation to inform and consult affected employees when a TUPE transfer is due to take place.

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