Interesting results from our last survey: 59% of voters think that people should be paid for time on-call but 67% think that it should just be minimum wage. Unsurprisingly, 81% of voters thought napping Lords should not be paid. For the full results click HERE.
This week the head to head takes on the issue of whether or not TUPE should be abolished: it can be confusing and there is an enormous amount of case law that has grown up around it but do you think it has outlived its purpose?
Finally, we have had a great response to our holiday pay seminar series. Click HERE for information on the remainder of the series.
YES TO THE ABOLITION OF TUPE BECAUSE...
TUPE was great. It was a product of European idealism promoting the laudable principle of job security in a dynamic economy. The problem is that it has not met the needs of a dynamic economy.
Whether we like it or not, we are part of the global economy and companies have to be fast and flexible. The great difficulties involved in changing terms and conditions on a transfer make TUPE a burden to a business. In 2006, when TUPE was redrafted, and in 2014 when it was amended, there was pressure from the UK business community to allow changes to the contracts of an incoming workforce so as to harmonise them with the acquiring company’s staff. The Government has consistently been unable to allow such ‘harmonisation’. It is tied down by the public policy mantra behind the European directive which requires that no element of an employee’s terms and conditions can be reduced. This remains so even if other terms such as salary are increased to take account of the detriment to the employee. It remains so even if the employee consents.
Where a company carries out an internal reorganisation or where the shares in a company are sold, then changes to terms and conditions can be made. After consultation, new contracts can be introduced for genuine business reasons. For employees who object, there is the protection of redundancy. What TUPE has done is not to preserve rights, but to give employees involved in a business transfer enhanced protection that other employees do not enjoy.
As an employment lawyer I have seen time and time again TUPE disrupt and damage business transfers, including rescues of failing businesses that were designed to ensure jobs are saved. Despite the inevitable loss of fees to the legal community, it is time to waive TUPE goodbye. In its place there needs to be a tweak to the Employment Rights Act to ensure that following the transfer of a business, any jobs that are required in the new company should be offered to the affected employees just as if these were vacancies arising in an internal reorganisation. If an employee is unsuccessful in their application, they will have a redundancy payment. If they are offered a role on no less favourable terms, they will lose their rights to a redundancy payment if they do not accept it, again reflecting existing redundancy law. Employers will have confidence to adapt and change. Employees will have the security of either alternative employment or a redundancy package. What they will not be guaranteed is their existing terms and conditions. Unfortunately that is one ideal that we can no longer afford.
NO TO THE ABOLITION OF TUPE BECAUSE...
Business transfer laws were introduced across Europe when the Acquired Rights Directive (ARD) was enacted in 1977. The purpose of the ARD and TUPE is to protect employees if the business in which they are employed changes hands.
Without TUPE laws, employees can be easily dismissed when businesses are sold as a going concern. They will be at the mercy of the buyer who can unilaterally decide if it wishes to continue their employment, change their contractual terms or sack them because they are too expensive. There is currently law in place to prevent such practices and tribunals have guarded these protections for more than 35 years! Recent cases demonstrate that the tribunals go as far as extending TUPE protection to employees when UK jobs are being shipped abroad.
On the subject of offshoring, when the Government was reviewing the law last year, it considered if TUPE should cease to apply in the context of commercial outsourcing as this is one aspect of UK law 'gold-plating' the ARD. Following a public consultation, it decided against the idea and chose to retain statutory protection for employees provided that services carried out by the incoming contractor are fundamentally and essentially the same as those performed by the outgoing contractor - eminently sensible in my view as there is no reason why people should lose their jobs if there is in fact a job for them to do following a change in legal ownership.
TUPE laws have already been relaxed to ensure that employers have more flexibility to change the terms and conditions of transferring employees (including those in collective agreements) and to dismiss them in appropriate circumstances (eg a genuine redundancy or due to any other economic or technical reasons). Lest we forget, employees are especially vulnerable when their employers are being acquired or taken over by other corporations, whether in times of economic boom or bust. The creative attempts by new employers to harmonise terms and conditions across their workforce after a TUPE transfer, often to save costs, are a good example of ARD violations.
Abolition of existing laws will only encourage further exploitation of UK labour and undermine the safeguarding of employees’ rights in the event of business transfers - a concern astutely recognised by our European partners in the late 1970s and which still resonates in the 21st century.