Thursday 31 October 2013

The government onslaught on TUPE rights - a threat to us all

Workers in IT Services often face being transferred from one employer to another as customer contracts are lost and won.  This process is covered by the EU "Acquired Rights Directive", which became UK law through the Transfer of Undertakings (Protection of Employees) Regulations, commonly known as TUPE.

TUPE was meant to protect workers against having their terms and conditions worsened as a result of the change.  It only ever provided partial protection, with major gaps (for example in relation to pension rights).  There's a UNITE guide to the 2006 regulations here.

Now the government proposes to worsen the limited legal protection we have.  The outcome of the government's "consultation" is here.  Below is an extract from a union commentary on the proposed changes, which are expected to come into effect in January 2014.

The proposals, if implemented, will be very bad news for workers in many industries, but IT Services will be particularly badly hit.  They would make it easier for employers to dismiss workers, short-circuit redundancy consultation, make it easier for employers to change terms and conditions, and open the door to more arguments about whether or not TUPE applies when services switch between suppliers.

It has always been the case that strong union organisation is a better protection for employee rights than just relying on the law.  The changes will make this even more true.  And of course even though the law will still ban some activities by rogue employers, other government changes mean workers not in a union who need to make a tribunal claim will face the prospect of either stumping up sizeable tribunal fees or seeing "no win no fee" solicitors taking a large chunk of their compensation.

This is a government of millionaires helping their mates get richer by slashing the rights of working people.  This week I've been at a UNITE training course on TUPE where reps from different IT & Communications companies came together to learn how best to protect employees during and after TUPE transfers.  It may be possible for union members to challenge the legality of some of the changes as cases come up, but the danger is that workers lose their jobs, terms and conditions while such challenges grind through the courts.  Workers need to get better organised now to defend ourselves when TUPE rears its head.

Unite commentary on proposed changes to TUPE Regulations (5 September 2013)

The government has announced proposed major changes to the TUPE Regulations, including:
·         Restricting the service provision change rules
·         Permitting employers to seek to change terms and conditions derived from a collective agreement after 1 year.
·         Weakening unfair dismissal rights
·         Permitting consultation on possible redundancies before a transfer to count towards the transferees obligations to consult under section 188.

The TUC is concerned that several of the proposed changes do not appear to be consistent with EU law including the Acquired Rights Directive and the Collective Redundancies Directive.

TUPE protects employees' terms and conditions of work when a business is transferred from one owner to another. Staff automatically become employees of the new employer on the same terms and conditions as they were on before, and their continuity of service is also protected.

However, under the government's plans TUPE will not always apply when services are outsourced.

These changes will lead to the erosion of the pay and conditions for low-paid staff in sectors such as cleaning, social care and catering where outsourcing is common, says the TUC. It argues this will have an adverse impact on women, who are more likely to be employed in contracted-out services than men.

In addition, employers will now be able to re-negotiate changes to collective agreements one year after transfer. This will give them extra flexibility to cut pay and conditions after a transfer takes place.

The summary of the government’s proposals with TU side comments are as follows:

·         The Service Provision Changes rules (SPC) will be amended so that they only apply if the service is fundamentally or essentially the same following the transfer. The government argues this is simply codifying case law.

However this change could significantly limit the SPC provisions, with the risk that tens of thousands of service sector workers will lose out on TUPE rights. It will also cause huge uncertainty for employers and lead to increased litigation.

·         The government is proposing two major changes relating to TUPE protected pay and conditions negotiated through collective agreements. The government plan to allow employers to renegotiate collective agreements one year after a transfer. Any changes must be agreed and any changes must not be overall less favourable to employees affected.

This proposal blatantly attacks trade unions’ ability to represent working people. It victimises individuals covered by collective agreement. This approach is not consistent with the Directive. It’s also unclear how they could make this change in EU law.

·         The government is also planning to legislate following the CJEU decision in the Alemo-Herron to provide for a static approach to transferred terms and conditions.

The decision of the CJEU is very problematic and effectively means that the Acquired Rights Directive can be interpreted as providing a ceiling of rights rather than a floor of rights. The TUC plans to raise concerns via the ETUC.

·         Other variations to terms and conditions post transfer. The government also plans to amend regulation 4 to allow for unilateral variation of terms pursuant to a contractual provision if such changes could otherwise have been made.

It’s not clear what this means. We suspect the government plans to say that if employers were able to vary terms and conditions if a transfer had not taken place they should be able to do so after a transfer. The TUC will investigate further to check whether this change will drive a coach and horses through the Regulations.

·         A change of location will become an ETO reason justifying dismissal.

This will mean it will be easier for employers to sack staff after a transfer where work is undertaken in a different location.

·         Wider unfair dismissal rights: The government plan to amend Regulation 7 to ‘more closely to reflect the wording of the Directive’.

These changes will weaken unfair dismissal rights

·         Consultation on redundancies undertaken before the transfer will count towards the new employer’s obligations to consult under section 188 of TULR(C)A 1992.

This will substantially weaken protection for transferring staff. The proposal is also not consistent with the requirements of the Collective Redundancies Directive.

·         Micro firms (with 10 of fewer employees) who do not recognise a union will no longer be obliged consult with employee representatives on TUPE Transfers. They can inform and consult employees directly.

The Directive does not allow for a small firm exemption on this or other TUPE rights. It is essential that consultation continues with recognised unions.

·         The transferor will not be able to rely on the transferee’s ETO to dismiss an individual before the transfer.

This is welcome, although if the government had proceeded to make the proposed change it would have been in breach of the Directive.

·         Disclosure of Employee liability information: The current provisions are to be retained. The notification period will be extended to 28 days before the transfer takes place.

This is welcome, but is mainly a response by government to the business lobby.