Chapter 16Employing labour■where the employer is the transferor, the measures,
if any, that the transferee will take in regard to any
employee affected. The transferee is obliged to give the
transferor the necessary information.
Where an independent trade union is recognised by the
employer, ‘appropriate representatives’ are representat-
ives of the union; otherwise they are either:
■employee representatives appointed or elected by the
workers affected for general consultation; or
■employee representatives appointed or elected for the
TUPE 2006 consultation.
Each individual representative must be given the informa-
tion by delivery or post and the representatives must be
supplied with accommodation and facilities to consult
with employees affected.
Failure to inform and consult
Regulation 15 applies. Failure to inform and consult
properly can lead to a claim against the transferor and
transferee of the business. Where one only of these par-
ties is made the subject of a claim, that party can join the
other in the claim. Where this is done, both the trans-
feror and transferee are liable to pay compensation to
each employee affected. The tribunal will rule on appor-
tionment of payment. The award is set at a maximum of
13 weeks’ actual pay per employee.
Insolvent employers
Transfer of debts. Some of the transferor’s debts will not
be transferred to the transferee. Under reg 8 these include
statutory redundancy pay, any arrears of pay, payments
in lieu of notice, holiday pay and basic award of com-
pensation for unfair dismissal. In practice, these debts
will often be met by the National Insurance Fund.
Other debts, including full notice pay and amounts
in excess of the £330 per week cap, e.g. as in the case of
a compensatory award for unfair dismissal, will transfer
to the transferee.
The above provisions apply only where the insolvency
practitioner is intending the survival of the company and
not where the intention is only to liquidate the assets.
Variation of employment contracts. Regulation 9 applies
and gives scope to change the terms and conditions
of employment where the transferor is insolvent. The
changes must be agreed either by the transferor or trans-
feree with appropriate employee representatives.
Variations can be agreed even if they are the result of
the transfer. However, strict rules are laid down as to
how agreement should be reached.
Before any agreement is reached with appropriate rep-
resentatives, every employee affected must be given a
copy of the suggested agreement and receive any guidance
that may be required to enable understanding. Although
the variation of terms may leave the employees with
inferior terms of employment, it cannot contravene stat-
utory entitlement such as the national minimum wage.
In broad terms, under reg 9(7), the agreement must
be designed to safeguard employment opportunities by
ensuring the survival of the undertaking and the sole
and principal reason for it must be the transfer itself
or a reason connected with it that is not an economic,
technical or organisational reason entailing changes in
the workforce.
Pensions
New regulations have been introduced under the Pensions
Act 2004. These provide for the first time a minimum
standard of protection for the occupational pension rights
of private sector employees on a TUPE transfer. The
regulations provide that where an employee had access
to an occupational pension scheme with employer con-
tributions they will be entitled to the benefit of a new
pension scheme post-transfer. The transferee employer
must offer the employee a prescribed minimum level of
membership as set out in the regulations, which came
into force on 6 April 2005.
(c)A change in the partners where a person is
employed by a partnership
A general partnership is not a separate person at law
as a company is. Employees of a general partnership are
employed by the partners as people. So, if A works for a
partnership of C and D, and D retires and is replaced by
E, then A’s employers have changed but his employment
with C and D and C and E is regarded as continuous.
Therefore, if C and E unfairly dismiss A, he can make up
his one year of continuous service to be able to claim by
adding together his service with C and D and C and E in
order to make a claim against C and E.
The legal context shown above would not apply to a
limited liability partnership, which is a legal person, so
that change of partners would not operate to change the
employer.
(d)A succession of contracts between the same
parties is regarded as continuous
So, if A works for B as a clerk and is then promoted to a
manager under a new contract, the two contract periods
can be added together to make a period of continuous
employment.459