In this special feature article we asked Adam Brett of Jones Cassidy Brett Solicitors and Rogers Watts of C&J Black Solicitors to answer your questions around the ever complex area of TUPE.  Questions include:

• Following Brexit, what rights will transfer?
• Transferring to NI from GB or from ROI – which legislation takes effect?  
• Transfer involving a change of workplace - what are employee's rights and who is liable?
• Accured holiday entitlement in a transfer situation - what transfers?
• Enhanced qualifications required following a Service Provision Change - what are my obligations?
• Employee elections for TUPE consultations - what are the rules re. employee numbers
• An employee drives as part of their role – does the transferor have to let the transferee know about any driving convictions e.g. points on licence etc?
• Objecting to a transfer, can an employee change their mind?
• Are you required to have and provide proof of the actual Collective Agreements to the transferee?
• Should formal letters be issued to Trade Union Side(s) to confirm the terms of reference of Collective Agreements?
• Terms and Conditions following a transfer - can you trade more favourable terms?
• Can the transferor refuse to provide Personnel files?
• Would outsourcing a HR role constitute a Service Provision Change?

Q. Domestic legislation may not adequately reflect EU Directives/Charters.  Post-Brexit, if legislation has not been changed to reflect jurisprudence based on EU Laws, which rights will transfer – rights limited by domestic Regulations or rights that reflect the enhanced position under EU Directives, Charters and ECJ case law, as interpreted by domestic courts and tribunals?

Quite frankly, until the clear shape of any Agreement is understood, reached and passed, it is not entirely clear which rights will transfer.  The current stated intention is along the lines that rights will be no less favourable, but clearly this is open to interpretation.  More generally, our Tribunals and Courts are well used to applying principles derived from a European Court of Justice cases.  I suspect that our Tribunals and Courts may continue to have some regard to what is said in such cases – after all our Courts can anyway have regard to decisions of foreign Courts – for example see the Judgement of Lady Hale in the Lee v Ashers case

Q. Transferring to NI from GB or from ROI – which legislation takes effect?  Is it based on where the employee is or where the new work location is or current work location? What if it’s the other way around i.e. a transfer of services outside NI to GB or ROI?

The ability to bring a claim in respect of breach of TUPE/SPC is based upon the place of location of the employee.  Therefore, if based in Northern Ireland and alleging a breach the claim would be based in Northern Ireland.

The position is more complicated where the Transferor is based in Northern Ireland, the Transferee is based abroad, and, for example, the Transferor wants to sue for failure to provide Employee Liability Information – in principle the claim would be in Northern Ireland but there may be issues in respect of enforcement.

Q.  If a transfer would involve a change of work location which would not be deemed a reasonable location for employees to transfer to, what are their rights and who is liable? For example, a Belfast-based employer buys out a Cookstown-based employer but has capacity to take all the existing employees to their Belfast location. However, the Cookstown employees are on minimum wage and cannot afford the travel. There’s no ETO as such – the new employer is willing to take them all on. If they don’t move from Cookstown the new employer might have to recruit new staff. Are employees entitled to redundancy pay etc and, if so, from whom?

Requiring staff to move from Cookstown to Belfast would be a problem even without a TUPE situation unless the staff had a suitable mobility clause under their terms and conditions.  TUPE, Regulation 4(9) allows an employee to treat themselves as dismissed if the transfer involves or would involve a substantial change in working conditions to their material detriment.

Regulation 4(11) preserves the right for an employee, in a TUPE situation, to terminate their employment by way of constructive dismissal – due to a repudiatory breach by the employer.

Current case law from England regards such dismissal as automatically unfair because it is related to the transfer and is not regarded as an economic, technical or organisational reason entailing changes to the workforce.  GB Regulations have addressed this by saying, a change in location can entail changes in the workforce.  This doesn’t apply to Northern Ireland.

The move from Cookstown to Belfast will be seen as a substantial change to the employees’ material detriment.  If staff treat themselves as dismissed then the unfair dismissal liability will rest with the Transferee unless they resigned and objected to becoming the employee of the Transferee before the transfer – in which case liability lies with with the Transferor.

Q. As an incoming employer, if employers are transferring and have a high volume of holidays (untaken) and their contract states that they cannot carry holidays to the next holiday year - can the incoming employer rely on their contractual clause and not honour the carried over holidays from the previous holiday year?

TUPE/SPC does not operate to improve any rights – so the employee’s rights will be no better than the rights they had under their contract with the Transferor.  Therefore, if the contractual entitlement is to be met, holidays cannot be carried over then that is what would apply – subject to the wider concerns about whether such a policy is in the particular circumstances valid – for example where the employee has been off sick all year, or there are pregnancy, disability or other relevant reasons. For extending the entitlement to carry over.

Q.  Scenario - a tender document stipulates a certain qualification and a Service Provision Change applies.  An employee is assigned to the contract by the Transferor and has been assigned for a period of time but does not have the required qualifications.  As the transferee, what obligations do you have?  Does the individual transfer even if they do not hold the qualification?

In this scenario the employee automatically transfers.  If the transferee considers that the employee does not have the required qualification/skills to carry out the job it will be for the transferee to go through an appropriate process.  If as a result of changes in the contract terms imposed by the client so that higher qualifications are now required and the employee cannot meet these it would seem there is in principle potential for a termination based on redundancy/some other substantial reason.  The employee will transfer whether or not they have the qualification.

Q.  Does there always have to be an employee election for employee representatives in a TUPE transfer, or does it depend on numbers, where there are 2-4 employees who could transfer?

The 2014 TUPE Regulations in GB provided for micro businesses not to have to call elections.  The position in Northern Ireland remains there is no minimum number – this is sometimes most easily dealt with by getting the employees to nominate each of themselves and then consulting with all of them.

Q.  An employee drives as part of their role – does the transferor have to let the transferee know about any driving convictions e.g. points on licence etc?

Provided there has been no disciplinary action within the last two years then information about points on Driving Licence is not covered by ELI so there is no obligation on the Transferor to let the Transferee know.

Q.  If an employee objects to a transfer and it has been agreed that they will remain an employee of the transferor, is there a timeframe within which they can change their mind and opt to transfer before the date of transfer? Does the transferee have any claim in law if the transferor keeps all their best employees or encourages them to not transfer?

The Regulations provide that an employee can object to transferring to a particular employer Regulation 4 (7).  There is no mention of withdrawal of objection/changing mind, and we are not aware of any case law directly on the point.  We suspect that this may be a matter of fact for a Tribunal – rather in the same way as considering whether a verbal resignation given in the heat of the moment can/should be deemed as having been withdrawn.

The impact of the agreement that the employee will remain an employee is uncertain.

Q.  Are you required to have and provide proof of the actual Collective Agreements to the transferee?

Clearly it is desirable that Collective Agreements should be set out in writing.  However, in our experience it is actually quite common for unions to be recognised and to engage in collective bargaining etc on an annual basis, but that the employer/its successor does not have a copy of the Agreement.  The union itself may or may not have a copy.

Regulation 11(e) states “information of any Collective Agreement which will have effect after the transfer, in its application in relation to the employee.”

In principle it may be possible to have an Agreement which was never reduced to writing, or where the hard copy has been lost.  The Regulation does not provide for provision of a copy, merely the provision of information about any Collective Agreement.

Q. Should formal letters be issued to Trade Union Side(s) to confirm the terms of reference of Collective Agreements?

There is no requirement to do this.  The requirement is as set out in the reply to Q9 above.  If there is genuine doubt about the terms of a collective agreement, a possible response is to seek clarification from the Trade Union but consideration should also be given to alternative sources for the information required.

Q. Can you ‘trade’ a transferee’s more beneficial terms with transferor’s benefits not provided by the transferee? Are there any circumstances in which an in-coming employer can offer an overall package of equivalent rights, rather than match all the transferring employees’ rights?

The effect of TUPE is that a transferred employee can insist on due observance of each and every term of their contract as it was at the date of transfer.  They can’t be required to accept a package of equivalent rights in lieu of their transferred rights.  The exception is a valid variation, being one which is not made because of:

(a)    the transfer; or

(b)    a reason connected with the transfer unless this is for an economic, technical or organisational reason entailing changes in the workforce.  This has been narrowly interpreted, to date, to exclude the harmonisation of terms and conditions.

Q.  Can the transferor refuse to provide Personnel files, other than the specific employee liability information required by law?

The transferor is not required by TUPE to hand over files, as opposed to giving the information specified in Regulation 11.  Many tender contracts, however, do require this.  Consideration needs also to be given to GDPR requirements e.g. do your data privacy notices to staff say that files might go to successor employers; should out of date or irrelevant data be removed;  do they contain special category personal data?

Q.  If a Client makes an HR role redundant as a cost saving exercise and on the basis that they feel there is no longer a need for the role  - but wish to outsource the (fairly limited) HR function to an external provider – could this constitute a service provision change? Would the redundant HR person have any rights under TUPE?

The contradiction in this question is that the HR role is no longer required but it is to be outsourced.  Does this not simply mean the employer wants to outsource its HR function?  If the employee is in an organised grouping of employees (and that can be just one employee) whose principal purpose is carrying on the very activities that are to be outsourced then this will be a service provision change.  If the employer makes the HR employee redundant, this is like to be an automatic unfair dismissal as it will be transfer related – see Regulation 7.

The content of this document was provided by Adam Brett of Jones Cassidy Brett and Roger Watts of C&J Black.  Contact details for Adam and Roger are below:

Adam Brett
Jones Cassidy Brett Solicitors
Tel: 028 9064 2290   Email: ABrett@jcbsolicitors.co.uk

Roger Watts
C&J Black Solicitors 
Tel: 028 9032 1441  Email: roger.watts@cjblack.co.uk

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The information in this document is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within these articles.