TUPE: The Differences North and SouthPosted in : Supplementary Articles NI on 1 January 2014
TUPE differences between Northern Ireland and the Republic of Ireland
TUPE is a complex area for many HR practitioners and employers. This article considers the TUPE differences between Northern Ireland and the Republic of Ireland. For businesses operating on both sides of the border, the subject becomes even more complicated, given the different TUPE legislative regimes North and South.
Although legislation in both jurisdictions is derived from European Directives (originally in 1997 and now Directive 2001/23/EC), member states have been given a certain degree of latitude in relation to how they implement the Directive. Therefore, although similar in many respects, there are some notable differences in the implementing legislation which businesses should be mindful of when faced with a potential cross border transfer situation.
The applicable legislation in Northern Ireland is the Transfer of Undertakings (Protection of Employment) Regulations 2006 and the Service Provision Change (Protection of Employment) Regulations (Northern Ireland) 2006 – “NI legislation”. In the Republic of Ireland the relevant legislation is the European Communities (Protection of Employment Employees on Transfer of Undertakings) Regulations 2003 as amended by the Employees (Provision of Information and Consultation) Act 2006 – “ROI Legislation”.
TUPE - Key Differences
1. Definition of “Relevant transfer”
Both the ROI and NI legislation provide that a relevant transfer occurs when there is a transfer of an economic entity that retains its identity. However, the NI legislation includes a more liberal definition of a relevant transfer by expressly providing that a transfer applies on a “service provision change”. The position in relation to service provision changes in the Republic of Ireland is less certain given that there is no express reference in the ROI legislation to a “service provision change”. The question as to whether a particular service provision change constitutes a relevant transfer in the Republic of Ireland has been left to the Irish Courts to decide with the result that there is a great deal of uncertainty in relation to contracting out.
2. Information and Consultation provisions
In the Republic of Ireland employee representatives must be given details of the reason for the transfer, the date of the proposed transfer and the legal, economic and social implications for employees not later than 30 days before the transfer date. In Northern Ireland, the obligation is to inform and consult and provide information “long enough before the transfer to enable consultation will take place”. Consultation is only required in both jurisdictions where measures are envisaged. Whilst in practice consultation in both jurisdictions would in all likelihood commence at least 30 days before the transfer, there may be situations where businesses will need to operate to a tighter timescale and the NI timescale could afford more flexibility.
3. Right to Object to the Transfer
The NI legislation expressly provides that employees have the right to refuse to transfer to another employer. The NI legislation goes on to state that where an employee so objects, the transfer shall terminate their contract of employment with the transferor but they are not treated as having been dismissed by the transferor. The NI legislation therefore makes the position very clear in relation to dismissal and it is also evident that there will be no redundancy payment entitlement. The ROI legislation is silent on the issue with the result that the legal effect of an employee’s objection to the transfer has been left for a determination by ROI Tribunals and Courts.
4. Provision of Employee Liability Information (ELI)
The ROI legislation provides that the transferor shall notify the transferee of all rights and obligations arising from a contract of employment existing on the date of a transfer. The NI legislation is more specific and detailed in providing that the transferor must notify the transferee of ELI in relation to transferring employees at least 14 days before the Transfer.
ELI means information in relation to the:- ·
- Identity and age of the employee;
- Statutory Particulars of employment that an employer is obliged to give an employee;
- Information in relation to any disciplinary or grievance procedure taken against or by an employee within the previous two years;
- Information in relation to any Court or Tribunal Case, claim or action brought by the employee against the Transferor within the previous two years or that the transferor has reasonable grounds to believe that an employee may bring against the transferee arising out of the employee’s employment with the transferor;
- Information in relation to any collective agreement which will have effect after the transfer.
In practice, however, in many standard business transfer situations the information will be furnished via the legal due diligence process. The NI ELI requirement is also of limited use given that the information can be furnished so close to the transfer date (14 days).
5. Pension Rights
The transfer of rights relating to occupational pension schemes is excluded under both the NI and ROI legislation. However, NI employers have some obligations in relation to occupational pension schemes that will transfer so that a transferee must provide a minimal level of pension provision, depending on the type of scheme (for example in a defined contribution occupational pension scheme, the buyer must match employee’s contributions up to 6% of basic pay). Under the ROI legislation the transferee is under no obligation to continue contributions to the transferring employee.
In both jurisdictions the pensions exception does not apply to other benefits under an occupational pension scheme that are not old age in validity or survivors benefits. For example, It has been held that the right to be considered for early retirement benefits can transfer.
To summarize, TUPE is a complicated subject. Failure to follow TUPE can lead to costly and time consuming claims. If you are facing a potential transfer situation take advice at an early stage!
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