In our last TUPE article we looked at what could constitute a relevant transfer or service provision change and therefore be covered by the TUPE Regulations.
If you are an employer involved in a TUPE situation you will be either the transferor the outgoing, old employer or the transferee the incoming new employer. The regulations will in a relevant transfer situation, ensure that the affected employees transfer from transferor to transferee with their length of service, status and contractual terms and conditions along with any liabilities associated to the employees.
To ensure that all parties are aware of what is happening, the TUPE regulations place certain employer obligations on both the transfer or and the transferee.
Both transferor and transferee have a duty to inform and consult representatives of their employees affected by the transfer.
- The transferor has an obligation to provide the transferee with certain information about employees that are to transfer and any associated liabilities.
- The transferee has an obligation to provide information to the transferor to allow then to properly fulfil their obligation to inform and consult.
The TUPE regulations bring large employer obligations to inform and consult ‘appropriate representatives’ of their employees affected by the transfer. If there is no recognised Trade Union the employer (if there are 10 or more employees in the company/organisation), must offer the employees the right to elect representatives and facilitate such an election. Such representatives cannot be selected by the employers. There are many rules relating to employee’s representatives so expert advice should be sort, as failure to consult with the correct representatives can lead to tribunal awards of up to 13 gross weeks’ pay to each employee, even if the rest of the employer obligations are correctly carried out.
If the affected employees fail to elect representatives, information is provided directly to the affected employees.
The employer must provide the following information, in writing, to appropriate representatives if there are any or the employees if not;
- That the transfer will take place
- When the transfer will take place
- Why the transfer will take place
- Implications of the transfer for the affected employees
- Any measures it is envisaged will be taken connected with the transfer in relation to the affected employees
So a transferor can consult on envisaged measures, the transferee is required to provide the transferor the information necessary to do this. To allow the transferee to assess if there are envisaged measures, the transferor is required by the TUPE regulations to provide them certain information on the transferring employees;
No later than 28 days before the transfer (where reasonably practicable), the transferor will need to provide certain information to the transferee, about transferring employees and associated liabilities, this information is often referred to as NELI (from Notification Of Employee Liability Information). This information will need to be updated if there are changes.
The information that must be provided is on;
- The identity of transferring employees
- Their main contractual terms
- Any collective agreements
- Disciplinary action/grievances issued in the last two years
- Any legal proceedings brought by the employees in the last two years
- Any such claims that they (the transferor), have reasonable grounds to believe an employee may bring
The sanction for failure to comply is that the Employment Tribunal may order the transferor to pay the transferee compensation of a minimum of £500 per employee and may increase this amount taking into account any loss sustained by the transferee due to the failure.
Failings in the interactions between transferor and transferee and the exchange of information between them can be very costly if not done correctly as can failures to properly inform and consult with affected employees or their reps and the time scales involved can be tight.
If you think your future plans are covered by the TUPE regulations seek expert advice.