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Transfer of Undertakings (Protection of Employment)

Regulations 1981

 

Consultation

 

INTRODUCTION

 

This guidance note is designed to set out the main provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 (TUPE) which relate to the obligation to consult and provide information relating to a TUPE transfer to appropriate representatives of the workforce.

 

APPROPRIATE REPRESENTATIVES

 

Appropriate representatives are:

  • trade union representatives; or

  • elected employee representatives.

Where there are recognised trade union representatives in respect of affected employees, the employer can choose whether to consult with those recognised union representatives, or with employee representatives.

 

If the employer does not recognise a trade union, or has chosen to consult with employee representatives, it must hold employee elections to appoint representatives.  This must be conducted in good time to start consultation with the representatives elected.

 

If the elections are started in good time, but the employees do not elect representatives quickly enough for consultations to start within the required time limit, employers will be complying with their obligations if they begin consultation as soon as the representatives are elected.

 

The number of employee representatives and method of election is not specified by the legislation.  The Government has, however, issued a consultation document under which it proposes that legislation relating to the election of employees shall be amended to provide that:

  • the employer must make suitable arrangements for the election and take all reasonable steps to ensure that it is carried out sufficiently early to allow for information to be given and consultation to take place "in good time";

  • the number of representatives to be elected and the term for which they are to be elected are matters for the employer to determine, so long as the numbers are sufficient to properly represent all relevant employees, and the representatives remain in office long enough to complete the necessary consultation;

  • the candidates for election must be members of the affected workforce on the date of the election;

  • no-one who is a member of the affected workforce on the date of election may be unreasonably excluded from standing as a candidate;

  • all those who are members of the affected workforce on the date of the election must be entitled to vote, and must cast as many votes as there are representatives to be elected; and

  • the election is to be conducted so as to secure that:

- those voting do so in secret; and

- votes given at the election are fairly and accurately counted.

 

Although these are merely proposals for legislation at the present time, it is recommended that these are used as guide lines for the elections.

 

INFORMATION TO BE PROVIDED

 

The information which should be provided to the appropriate representatives is as follows:

  • the fact that the transfer is to take place;

  • when, approximately, it is going to take place;

  • the reasons for the transfer;

  • the "legal, economic and social implications of the transfer" for the employees.  This will include the effect of TUPE on the employees' contracts of employment, including salaries and other working practices.  It should be noted that under TUPE all employees transfer on their existing terms and conditions of employment and this fact should be notified to the appropriate representatives; and

  • the measures which the employer or the transferee envisage taking as a result of the transfer.

It is recommended that the information should be provided in writing. 

 

CONSULTATION WITH APPROPRIATE REPRESENTATIVES

 

The matters upon which consultation should take place will obviously depend on the type of transfer envisaged, but consultation should cover any action or step which the employer or the transferee envisages taking in respect of the employees.  Potentially therefore it may cover redundancies as a consequence of the transfer, alterations to working practices or pension rights and any changes in collective bargaining arrangements. 

 

However, a measure will only be regarded as envisaged if the employer has formulated a definitive plan or proposal in relation to it.  Mere possibilities are excluded.

 

The minimal components of the consultation are:

  • to conduct the consultation with a view to seeking the agreement of the appropriate representatives to the measures to be taken;

  • to consider any representations made;

  • to reply to those representations; and

  • to give reasons for rejecting any of them.

TIME SCALE

 

TUPE does not give any statutory timing for the processes of information giving and consultation. 

 

TUPE requires that information must be given "long enough before a relevant transfer to enable consultations to take place".  In other words, the employer must supply the necessary information as soon as it is reasonably practicable after the election of representatives.

 

TUPE does not set any timescale for consultation, although the duty can only arise once the employer envisages it or the transferee is to take measures in relation to affected employees.  There may be an analogy with consultation over proposed redundancies in appropriate circumstances.  That consultation must be in good time and in any event a set number of days before the first of the dismissals is to take effect.  The number of days is:

  • 100 or more employees - 90 days before the first dismissal takes effect; and

  • between 20 and 99 employees - 30 days before the first dismissal takes effect.

If there are special circumstances which do not make it practical to comply with these requirements, employers must take all steps that are reasonably practical towards complying with the timescale.

 

There are also requirements to notify the Secretary of State if 20 or more employees are to be made redundant.

 

PENALTIES FOR FAILURE TO COMPLY

 

If an employer fails to fulfil its consultation duties or its duties to provide information, a claim may be made by an appropriate representative or any of the affected employees to an Employment Tribunal.  The Employment Tribunal may make a protective award against the employer.  The amount of this in respect of a failure to consult regarding a TUPE transfer is such amount as the Tribunal considers "just and equitable" up to a maximum of 13 weeks' pay for each of the employees.

 

If a complaint is made, the employer can raise a defence if:

  • it was not reasonably practical to comply with the requirements; and

  • the employer has taken all reasonable steps to comply with them.

 

 

If you have any queries, please contact any member of the Employment Unit.

London office :- (020) 7842 0000

 

 

 

Please note that this guide is not intended to be exhaustive or be a substitute for legal advice.  The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.