TUPE and settlement agreements
Labour & European Law Review Weekly Issue 315 18 April 2013
The government’s proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (see weekly LELR 303) will benefit only employers and do nothing for the economy, Thompsons says in its response to the consultation.
The firm warns that the reforms (which include repealing Service Provision Changes; amending the restrictions on changes to terms and conditions; and limiting the future application of terms and conditions derived from collective agreements to one year from the date of the transfer;) lack a sound evidence base, will reduce employee protection and will disadvantage the low paid, especially women.
Thompsons argues that it makes good business sense to retain Service Provision Changes, not least because repealing them will re-introduce the legal uncertainty prior to 2006, resulting in the risk of more litigation and therefore more cost for employers.
It says that the proposal to loosen the restriction on making changes to terms and conditions is unfair and unhelpful, and probably does not comply with the Directive. As for the proposals to limit the application of terms derived from collective agreements to one year and impose a static approach, these fail to respect the system of collective bargaining in the UK, misrepresent the possible outcomes of the Alemo-Herron case and may well be unlawful.
Read Thompsons’ response to the proposed changes
The firm has also made clear its concerns about settlement agreements and their impact on employee rights. In its response to the Acas consultation on the draft code of practice, it has recommended that the standards required of employers should be “robust”.
The agreements - or protected conversations as they were originally called - allow employers to offer to terminate an individual’s employment, but deny employees the right to use the fact of the offer as evidence if they decide to pursue an unfair dismissal claim at a tribunal.
As the conversations are removed from public scrutiny and leave employees without any remedy, Thompsons considers that ACAS is honour-bound to produce a code which protects employers from making inadvertent transgressions, and their employees from the adverse effects of them.
It also recommends that the code should contain good practice guidance on how settlement agreements are offered and discussed, in addition to being covered in non-statutory guidance which should contain detailed recommendations on what might constitute “impropriety”, especially behaviour which might be considered to be at the fringes.
It urges Acas to include a recommendation that the details of any offer should be set out in writing in the code, not least so that so that the employee and their advisor can consider them properly.
Read Thompsons’ response to the ACAS Draft Code of Practice on Settlement Agreements