Jo Seery considers how trade unions can use the information and consultation provisions of TUPE in the current political climate of public sector cuts and privatisation
Trade unions have already used the Regulations to good effect securing significant payouts for members. In one case, the RMT reached a legally binding recognition agreement as part of a settlement following an employer’s failure to inform and consult.
Is information different to consultation?
The obligation to inform and consult comes in two distinct stages. In Cable Realisations Ltd -v -GMB Northern, the EAT held that the duty to inform applied independently of the duty to consult.
What is information?
The TUPE Regulations state that the outgoing employer must provide the following information:
- the fact that the transfer is to take place, the date of the transfer and the reasons for it
- the “legal, economic and social implications” of the transfer for affected employees
- the “measures” that the transferor envisages they will take in connection with the transfer in relation to affected employees or that they don't envisage taking any
- the “measures” that the transferor envisages the incoming employer will take in relation to affected employees who will transfer, or that they don't think the incoming employer will take any such “measures”.
“Legal” implications include the impact on statutory and contractual rights (including continuity of employment). “Economic” implications include the impact on pay and career advancement. “Social” implications is a loose term but is likely to include social security implications such as pensions and National Insurance contributions.
“Measures” are not defined. They probably include a change to existing working practices or arrangements. Examples include changes to pay rates, job descriptions, recognition and collective bargaining, hours of work, place of work, overtime payments and reporting procedures.
In Todd -v- Strain the EAT held that a change in pay arrangements amounted to a “measure” requiring the outgoing employer to consult.
The fact of the transfer itself is, on its own, unlikely to amount to a measure on the part of the outgoing employer.
When must the information be provided?
The information must be provided “long enough before a transfer to enable the employer... to consult the appropriate representatives”.
The Regulations do not stipulate a timetable, they just state that the information has to be provided in sufficient time to allow for consultation.
In Cable Realisations, the EAT held that an employer who waited until just before an annual shutdown to inform the trade union about the transfer, which was to take place shortly afterwards, was in breach of the duty to inform because they had not enabled voluntary consultation to take place.
To whom must the information be provided?
The employer must provide the information to the appropriate representatives of any affected employees.
The appropriate representatives will be:
- recognised trade union, or
- appointed or elected employee representatives.
If the employer has invited the employees to elect employee representatives, but they decline to do so, they must provide the information to the employees directly. An employer who fails to invite employees to elect employee representatives is in breach of the requirements of TUPE.
Who are affected employees?
Affected employees include employees of the outgoing employer whose employment will transfer.
But they also include other employees of the outgoing and the incoming employer who “may be affected by the transfer or may be affected by measures taken in connection with it.”
So, the outgoing and the incoming employers may have other employees (i.e. who are not transferring) who are affected by the transfer, or may be affected by measures taken in connection with it.
Information must be provided concerning these other affected employees, as well as to transferring employees.
When does the obligation to consult arise?
The obligation to consult only arises when the employer of any affected employees envisages that they will take “measures” in relation to affected employees in connection with the transfer.
This means that, in practice, in advance of the transfer, the outgoing employer is only under a duty to consult in relation to the measures that they propose to take regarding affected employees in connection with the transfer.
In advance of the transfer, there is no obligation imposed on the incoming employer to consult with employees whose employment is to transfer. This is because the incoming employer is not, in advance of the transfer, the employer.
But the outgoing employer may envisage taking measures relating to non-transferring affected employees, in advance of the transfer. Likewise, the incoming employer may envisage taking measures in relation to their existing employees in connection with the transfer. In both cases, the respective employer would be under a duty to consult with the affected employees.
The fact of the transfer taking place does not prevent either employer’s obligations to consult. So, once the transfer has taken place, the incoming employer must consult in relation to the measures they envisage taking in relation to affected employees, including transferred employees.
Likewise, the outgoing employer must consult in relation to any measures they envisage taking in relation to non-transferred affected employees.
What remedies are available to employees?
If an employer fails to comply with the Regulations, the “appropriate representatives” must submit a Tribunal claim within three months of the date of the transfer. If no “appropriate employees” were elected or appointed, then each affected employee has to submit an individual claim.
If the Tribunal upholds a complaint against the transferee, it makes a declaration to that effect and may order them to pay appropriate compensation to “such description of affected employees as may be specified in the order”.
If the Tribunal upholds a complaint against the transferor, it again makes a declaration. The transferor and the transferee are then jointly and severally liable for any compensation awarded.
However, if the transferor failed to provide information about the measures they envisaged that the transferee would take, and the transferor had duly notified the transferee (making it a party to the proceedings), the Tribunal may order the transferee to pay appropriate compensation.
This is “such sum not exceeding thirteen weeks’ pay for each employee in question as the Tribunal considers just and equitable having regard to the seriousness of the failure of the employer to comply with his duty.” A week’s pay is not subject to the statutory cap.
Where the “appropriate representative” is a trade union, the award is made not only to its members, but to all employees of a description in which it is recognised.
If the employer fails to pay the compensation, individual affected employees may present separate complaints to a Tribunal within three months of the date of the Tribunal order.
What strategies should unions adopt?
To make best use of the information and consultation provisions, unions should
- write to the outgoing and the incoming employer seeking confirmation that TUPE will apply and setting out the information required by TUPE as soon as they are aware of a potential transfer
- ask what arrangements will be made for the appointment or election of appropriate representatives, if the union is not recognised
- establish information and consultation meetings with the outgoing employer
- identify the affected employees
- remind the outgoing employer and the incoming employer that the affected employees are not confined to transferring employees
- seek consultation on any measures which the outgoing or the incoming employer may envisage in relation to affected employees in connection with the transfer
- remember the three month time limit for presenting a Tribunal claim. If the union is not recognised, it will need to compile a list of the names and addresses of the affected employees who will need to file Tribunal claims individually.