Must employees sign a harmonisation of contracts letter under TUPE without seeing new Terms & Conditions?Posted in : Seamus Says - Employment Law Discussion on 5 April 2019
"The organisation I work for was TUPE'd to an English employer last April. It was agreed recently that terms and conditions were to be harmonised from the 1st of April this month 2019. Letters have now been sent out to employees asking them to sign a letter agreeing to the new Ts and Cs without sight of the new contracts. This letter is to be returned within a week. The letter says that new contracts will follow employees signing the letters".
Seamus: I think there are automatically a few red flags there that come up. Essentially what's happening here is that a TUPE transfer has taken place. We're 52 weeks down the line or a year down the line about, and there's this discussion or this talk of harmonisation of contracts.
I'll maybe touch on that after, but my immediate concern would be that the new employer that the employees are now working for that were transferred across, they obviously do transfer across with, you know, their existing terms and conditions protected. They should be notified in advance of the transfer if there are any intended issues that are going to arise in relation to their terms and conditions.
And that would usually be addressed through a measures letter that the new employer would be sending to the existing employer at the time. And then there would be a duty under the usual information and consultation of employees to notify the employees of any changes.
But this is a circumstance where, you know, the employer more or less is saying, "Well, we're 12 months down the line here. Let's look at trying to harmonise the terms and conditions across the board here for all employees".
Now you can totally understand why an employer might want to do that. It's very difficult to run and deal with, you know, employees that are doing the same work, that are in the same roles, but are having different terms and conditions. And it can also lead to some feelings of not being content for some employees, if they're sitting beside someone that is on better terms and conditions and things like that.
So the employer, you know, is right in some ways in looking to harmonise those terms and conditions, but it's about the way that they do it.
Just specifically on this question that's asked, what strikes me as very odd is that the employees are being made aware that there's going to be an attempt to harmonise terms and conditions, but they are not given the terms and conditions themselves. What they're given is a letter to say, "Are you agreeable to your terms and conditions being harmonised?" So, very sneaky of this employer, I think. I would not be advising anyone to sign a letter to say that they are going to agree to do this. If they haven't received the actual contract, they're not aware of what those proposed amendments are going to be.
Scott: Now, they're protected against unfair dismissal because they've got at least a year's service, post-transfer, because they've been there since before April last year. So if they don't sign, it would be unlawful dismissal to get rid of them for not signing a letter. But more than that, I don't know any tribunal that will turn around and say, "You know what? It's reasonable to take action against an employee for not signing something that they haven't seen".
Seamus: Absolutely. It strikes me as very odd, this process they're taking. And certainly, from that perspective, it would raise your suspicions as to what exactly is going on, what is going to be contained in these terms and conditions.
Scott: You would want to know, as an employee, how harmonisation is going to work, because you may not even know all the terms and conditions of the employer's workforce to which you joined whenever there were TUPE done a year ago, you know? So, they could be better off or worse off.
But what the law says is that when you transfer, your own terms are limited to the ones that you have, but they're also protected. But it doesn't set a time limit on when the employer can harmonise. So this employer saying, "It's been a year. That's long enough. Let's put it together", but it really depends on why are they harmonising. And if it's related to the TUPE, it's unlawful after a year as much as it is after a week.
Seamus: Absolutely. I mean, there is good case law. I was doing research in relation to it. There's a case of London Metropolitan University against Sacker in 2006, and it involved a merger of two universities. There was an attempt at this idea of harmonisation, which was two years down the line from whenever the merger had taken place, and the tribunal still held at that point that it was unlawful. It was saying just because it was two years, it wasn't necessarily - it didn't put the ability on the employer then to harmonise at that point.
The university at that time was trying to use the ETO principles as a way to harmonise the contracts, but the view of the tribunal that looked at the case said, "No that wasn't the reason for the harmonisation.” It was actually just an attempt by the employer to get everyone into one boat in the sense of their terms and conditions, and also then to - there were going to be winners and losers in relation to that as well.
I think that, certainly, my view would be that the longer the period, the longer the gap between the transfer and the attempt to harmonise, you could certainly see, you know, a sensibility around that for the employer to say, "Well, it has been a number of years now. At least we can attempt it, because we've put enough time between it".
Scott: It's likely that something might have changed. So maybe in 10 years' time, you know, if we don't do something, we're going to have to make redundancies. It's not to do with TUPE. It's to do with redundancies of the market, or there's been some kind of legislative change the way that we work, so we got to bring you into these. Otherwise, you're going to lose in some kind of way.
I suppose there is an element of that would come in, but it's related to the ‘but for test’, but for TUPE, would the employer be changing any of these terms and conditions. If the answer is no, I wouldn't but for the TUPE, and we wouldn't be doing anything. It's unlawful, regardless of time.
Seamus: Exactly. And the classic one that I could say is I did have a case a number of years ago myself where the employees were being transferred across. My client was essentially doing the logistics work for the company, and the company also had retained a number of its own drivers, and then those drivers were transferring across to my client.
But much better terms and conditions in terms of their pension contributions, and really importantly, they had six months' full pay, where my clients didn't have that for sick leave. And after a while, my client was wanting to demand that, and it was a difficult conversation with the client to say, "You need to be very careful here". And certainly, when it comes to harmonisation, I think the idea is that they should always be open and transparent consultation.
The idea in this question is that you're going to sign up to something that you haven't had knowledge of, or that you haven't been given the opportunity to review. And I think all of the guidance is fairly clear. It has to be open and has to be transparent.
And really, the trick of the trade for employers is the presentation on it, and often, a lot of the time, the spin that's put on the changes, because you can put it forward where you say, "You are going to lose on this, but you are going gain on something else". And you hope that through negotiations and discussions, whether it's directly or through the trade union reps, or whatever the position is in the business, that you get to a point where you can harmonise. But there are some aspects that you could absolutely see an employee saying, "That's not something that I'm willing to sacrifice. I'm sticking to my guns on it".
And the thought process going down the line, even if they'd sign this letter to say, "Okay, I will agree to a variation", and then they got the terms and conditions and weren't happy, I don't think they could be held by the letter to say that they were going to agree to it. I just think it's completely unfair.
Scott: You can contract out of TUPE. There's maybe another angle that we haven't chatted about before we started the broadcast there, and that would be that if there's a variation to terms and conditions of 20 or more employees, that would fit the definition of collective consultation requirements.
Seamus: Yes, absolutely.
Scott: If there's an issue here where they're varying a good number of people who have been TUPEd, the employer leaves themselves open to a failure to consult claim.
Seamus: That's it. I mean, I suppose the aspect of that is that your time limit as well will start to run from whenever those breaches take place themselves, and if you're still able to latch on to the TUPE process at that point, you're looking at more than just a straightforward unfair dismissal case. You could bring in additionality in terms of claims there as well. So there's a lot for the employer to potentially lose on it.
There was some good guidance that was set out within – I had just got this online. It was the CIPD guide to TUPE transfers, and that's about the best guidance that I've been able to see outside of the ACAS and the LRA guidance itself. But this guide itself, it covers off everything, and it does include aspects on harmonisation and how employers could go about looking to harmonise terms and conditions.
Certainly, from my point of view, you know, I've dealt with a number of business purchases and company sale shares and things like that, where TUPE has been involved. It's really important to get issues down in writing and notify the employees in advance if there is going to be any issues that are going to arise, if there are terms and conditions that the new employer can simply not comply with because they don't have the ability, and that comes up sometimes in various different forms. It's about getting that down on paper and notifying people, and giving the employee the opportunity then to decide whether they want to actually transfer or not. The ball is in their court at that point.
Scott: Okay. WJust to remind listeners, we have a TUPE Update Northern Ireland event coming up on the 13th of June.
More on Transfer of Undertakings (TUPE)
- TUPE Update: Automatically Unfair Dismissals; EU Acquired Rights Directive
- Does a final written warning on an employee file adjust after TUPE transfer?
- TUPE Update: Construction of an indemnity clause; Continuity of employment; Automatic unfair dismissal
- TUPE Update: “Successor Employers”, Reinstatement Orders, Contractual Variations
- Failure to Inform or Consult Prior to TUPE Transfer: How do I handle it?
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