TUPE - imposing harmonised T&Cs - don't think this is legal?

[mwj666]

A number of us (150+) were TUPE transferred to a new employer in January last year and kept our T&Cs as required under TUPE. Well most of them - IMHO they have already changed things they are not allowed to change.

 

Our new employer is now saying that as we have worked for them a 'reasonable length of time' TUPE no longer applies and they are at liberty to change our T&Cs as they are setting about 'harmonising' them company-wide. Apparently they are also saying that even if anyone DOES object, if the majority accept the change that gives them the right to impose changes on the objectors.

 

I don't believe this is anything like legal. As far as I know :-

 

• There is no specific time limit in TUPE regs, nor has a definition of 'reasonable' ever been arrived at in case law. Certainly, last time I was TUPE'd (this is my 4th time round the TUPE loop) there was no attempt to impose new T&Cs in 5 years - although they did keep asking ;-)
  
• Any imposition of changes to T&Cs for 'harmonisation' purposes is never legal as it is de facto connected to the transfer by way of our retained T&Cs
  
• TUPE applies individually not collectively, so what anyone else chooses to do has no bearing on my rights under TUPE
  
• Although they are doing this at the same time as some sort of management restructuring, they can't use that as an excuse either as in practical terms we'll all still be in the same place doing the same jobs, just reporting to different people.
  

I think they are relying on a recent employment appeals tribunal decision that overturned TUPE retained T&C provisions, but that was in a very specific case where the people concerned were in fact being paid full-time rates even though they were part-time. Well, relying on that and being able to bully everyone into submission by 'divide and rule' tactics.

 

Our union are going to be no help in this, they pretty much keeled over in no time when we were TUPE'd in the first place and from what I've heard 3rd-hand they are highly likely to do so again.

 

Can anyone confirm that my view is correct and that they have no right to do what they are proposing? And if so, what can I do about it? The options seem to be either to claim constructive dismissal or to stay put and sue them for the difference in income between current and imposed contracts. Not that we've seen the new contracts yet but you can bet they won't be making these changes for the employees' benefit

 

And by the way - this isn't some fly-by-night operation, it's a FTSE employer with 3000+ employees.

 

If there's any employment law experts in England reading this, you may have a job - they have a track record of intransigence when it comes to anything like negotiating with their employees!

[Sidewinder]

You are correct in that there is no time limit under TUPE after which it is OK to harmonise T&Cs after a transfer. Whether 'reasonable' or not, the employer cannot simply walk over existing terms on that basis.

 

Not quite so sure about the 'majority decision' point though, for although I stand to be corrected, I believe this would depend on whether collective agreements were part of your contract under the old employer - those rights and agreements would also transfer IMO, so in theory at least, were it to be carried out through a formal collective agreement with the Union, then it might just be binding.

 

The caveats in all this are that ultimately many of the arguments would only be resolved by a Tribunal. Whilst TUPE serves to protect the T&Cs of an employee, and there is no timescale after which changes can be made, it is important to note that there is also nothing to say that changes cannot be made at all - merely that such changes cannot be made where the sole reason for the change is the transfer itself. Each case would therefore have to be judged on individual merit and the more time that elapses, the more likely it is that the employer could argue that the transfer was so long ago that the event is unconnected with the change being sought. The employer will also always have the valid getout in that if he can demonstrate a clear Economic, Technical or Organisational need to make the change then a Tribunal may well agree that the change was fair. If an unfavourable term in an 'old' contract was therefore at odds with the overriding objectives of the business need for profitability, was likely to damage the opportunity to win orders, would result in an unwieldy management structure etc, then they might be deemed justified in making changes as this would be for ETO reasons rather than simply due to the transfer.

 

Whilst the principles of TUPE are extremely straightforward, the interpretation is complex. In terms of what you can do to object? That would depend on the nature of the change,the reason for it being made, and the likely detrimental effect on individual employees. Best to see what is proposed and go through the grievance procedure. If it gets heavy and there is likely to be a severe effect on your T&Cs then probably best to consult with an employment lawyer.

[Bigredbus]

A crucial aspect of the protection afforded by TUPE is that employees transfer on their existing employment terms. TUPE places strict limits on post-transfer contract change and specifically addresses when such variations can and cannot occur:

• Where the reason for changed terms is the transfer itself, TUPE makes such changes void.
  
• Where the reason is connected with the transfer but is also an economic, technical or organisational (ETO) reason entailing changes to the workforce, TUPE provides that such changes are effective if agreed.
  
• Agreed variations that are unconnected with the transfer are also effective.
  

An employer aiming to harmonise terms after a TUPE transfer faces an uphill struggle. The consequent contractual changes will be connected with the transfer and are unlikely to fall into the ETO reason category. As such, strictly, straightforward post-transfer harmonisation is not possible. In particular, note that employees cannot contract out of the protection of TUPE and so even an employee who agrees to post-transfer contractual change can subsequently change their mind and seek to rely on their previous employment terms such as, for example, entitlement to an enhanced redundancy payment.

 

Leaving as much time as possible between the transfer and the changes to avoid the suggestion that they are connected (although the mere passage of time itself will not prevent the change from being connected with the transfer). Because the reason for the change is the key factor, there is no particular amount of time after a transfer that will enable an employer to safely introduce changes. Even a two-year delay between transfer and the change was found to be insufficient to break the link between the transfer and the variation in one case.

[Sidewinder]

Because the reason for the change is the key factor...

 

That is a significant point. TUPE case law is being updated and the rules rewritten all the time as very specific examples arise of 'harmonisation' or other changes to transferee contracts. There are no hard and fast rules, only a framework, and it is for an employer to demonstrate, or a Tribunal to determine that any changes made or resulting dismissals fall outside of the scope of TUPE protection.

 

In Enterprise Managed Services Ltd v Dance & Others (UKEAT/0200/11) the EAT overturned the decision of an ET that workers had been dismissed unfairly and ruled that an employer inheriting staff under TUPE was entitled to make changes to employee contracts after TUPE. In that case, changes had been made to existing staff contracts prior to the transfer and the employer sought to make similar changes to the transferred staff contracts after acquiring them, and terminated the contracts for those who did not accept the changes. As the employer was able to demonstrate that the initial changes had increased the productivity of the business, it was held that TUPE should not be a barrier to the employer imposing contract changes on the 'new' staff in an effort to drive the needs of the business to become more efficient.

[mwj666]

Thanks all for your helpful responses - yes Enterprise Managed Services Ltd v Dance was the case I was thinking of (I think!). Not sure it could possibly apply in our case however - we work in I.T so difficult to see how our T&Cs could have anything to do with productivity unless they intend to increase our working hours and/or make overtime compulsory and unpaid!

 

Collective bargaining is an interesting one I hadn't thought of - some of us are, some aren't, depending on what our personal contracts say. In my case I'm not and never have been. Even so, not sure that would override the individual application of TUPE?

 

It seems clear to me that, whatever they claim they are doing, the real reason this is happening is harmonisation onto new contracts of employment. Interestingly, I had a meeting with the head of HR - not connected with this - a couple of months ago, we got onto the subject of T&Cs at the tail end of the meeting and her comment was that it was being done to simplify staff management as they have lots of different groups of people on different T&Cs. Unfortunately, she has now 'pursued a career elsewhere'

 

First meeting with 'the management' is next week, will have a better idea of exactly what they are doing and how they are justifying it then but from what I have heard 2nd-hand from a trusted source it pretty much boils down to 'you are now out of time for TUPE protection so we're harmonising your T&Cs, end of...'. I have also heard that there was a comment from one of our more senior management along the lines of 'if anyone doesn't sign up, no-one gets their bonus this year' which, if anything like accurate, is about as clear a case of coercion as you could imagine... watch this space!

 

Once again - thanks all, your input is much appreciated. Have a nasty feeling that this is going to 'go legal' in fairly short order!

[mariefab]

At the meeting try to get them commit to the reasons why they've decided to make changes now and take notes if possible. Or/and perhaps try the, "There's just so much to take in" approach and try to get them to confirm it in writing.

 

If during the meeting you feel that their given reasons are likely to breach TUPE regulations keep it to yourself at that point. You'll have the opportunity to use it later.