UK: Understanding Measures In The TUPE Information And Consultation Process (Video)

Information and Consultation under TUPE is one of the key practical areas which can determine the success of a transfer. However, it can be difficult to identify whether an issue amounts to a measure as it is not defined under TUPE. If all measures are not identified, this can lead to employee relations problems and expose the organisation to financial risks if a matter is overlooked. This webinar covers the key issues that arise when looking at measures and how to deal with them as part of the consultation process.

The issues covered in the workshop will include:

• What are the TUPE information and consultation obligations?
• What is a measure?
• Interactive worked examples on measures
• When is the duty to consult triggered?
• How to deal with a benefit that cannot be replicated
• Pensions and measures.

Our speakers, Jane Fielding, Rebecca Jones and Liz Wood explain the key issues, helping to ensure a smooth transfer process and protect the organisation from claims and issues going forwards.

Transcript

Jane Fielding: Good morning everyone. I am Jane Fielding, I am Head of the Employment, Labour and Equalities Team here at Gowling in the UK, and I am delighted to welcome you to this, our first TUPE Club Webinar of 2022.

So today we are going to be focusing on the information and consultation aspects of TUPE with a particular focus on measures, which is a frequent source of questions and confusion for clients in the TUPE area. It is not entirely clear, always, what is a "measure" and what you do about it if you identify one. So we thought we would cover that today and hope to remove some of that confusion and give some clarity.

So our speakers are Rebecca Jones, who is a Principal Associate in the Employment Team and she is going to set the scene with an overview of information and consultation obligations and what a measure actually is, or what it is defined as. I am then going to go through some practical scenarios and you will have the opportunity to take part in a few quizzes to test your own knowledge and understanding. And then I am going to hand over to Liz Wood, who is a Principal Associate in our Pensions Team with a particular interest in the cross-over between employment and pensions and she does a lot of work with us in TUPE. So pensions is a frequent cause of questions in TUPE scenarios and Liz is going to cast some light on that in the context of measures.

So we are going to leave some time at the end for questions, but we will finish at 11.15 so that you can all get on with the rest of the day. If we do not manage to get through all of the questions and we do not pick up one of yours, do not worry we will come back to you afterwards as long as you leave your email address so that we know who has asked the question, we will be able to follow up with you. So you will get an answer to it.

If you want to pose a question please use the Q&A box, it is in the bottom middle of your screen - just post a question on there. We will keep an eye on them as we go along and pick as many up as we can. If you have any technical difficulties, please use the Q&A box as well - Suzie Barnes, who is our technical support today, will try and do her best to sort you out but hopefully we will not have any issues. And I will mention it again at the end, but we will circulate, by email afterwards, a feedback questionnaire. It only takes a couple of minutes to fill in and we would be really grateful if you would do that so we can shape future sessions with your feedback in mind. So I will go mute and handover to Rebecca.

Rebecca Jones: Thanks Jane. Well I wanted to begin by taking a quick look at the framework for the information and consultation process to provide some context for the more detailed discussion that we are going to have around measures. The duty to inform and consult is a session in its own right and today we really want to drill down on measures. So what I am going to do for now, is just focus on the aspects of the duty at the point where measures comes into play. We will not look at all the ins and outs of the consultation process but do let us know, in the Q&A box, if a more general session on that duty would be helpful.

Now the first thing I want to look at is the concept of affected employees. When we are talking about the duty to inform and consult under TUPE, what we are actually talking about is the duty to inform and consult with representatives of affected employees. An affected employee, for these purposes, means employees engaged by either the transferor or the transferee who may be affected by the transfer or, importantly, by measures taken in connection with the transfer.

Now it is usually fairly straightforward to identify the employees who are in scope to transfer and therefore affected for that reason, but the duty is wider than this and we can see that an understanding to what measures will be taken is key to determining the extent of the consultation to be carried out. In particular whether there were any measures envisaged by either the transferor or the transferee which will affect employees who are not in scope to transfer. And in most cases it will only be the transferee who envisages taking measures and only in relation to the transferring employees.

But, in those circumstances, the duty to inform and consult will primarily be a matter for the transferor and the reason for that is because the transferor is the employer of the transferring employees at the point where the consultation process is carried out. However, if the transferor also envisages taking measures in relation to employees who are not in scope to transfer, then the consultation process will need to involve those individuals as well. And an example of that could be where the transferor is carrying out a reorganisation to better align job roles with any transferring functions which means that some non-transferring employees will see changes to their roles.

In that scenario the transferor then has a duty to consult with those individuals. And similarly, although it is quite unusual, there could be a situation where the transferee needs to run its own consultation process and an example of that could be where the transferee is proposing redundancies after the transfer, which will mean pooling its existing employees with the transferred workforce.

The next thing I wanted to come on to is the duty for the transferee to notify details of its measures to the transferor. Now we saw, on the last slide, that the transferee could be subjected to a duty to inform and consult with its own employees but, as I said, that is not something that is commonly required and certainly not something that happens very often in practice. But where the transferee is usually involved is in relation to the duty under Regulation 13.4. Regulation 13.4 imposes a duty on the transferee to provide information to the transferor about the measures which it envisages in taking in relation to the transferring employees in connection with the transfer.

And, as we will see shortly, this is usually what is going to be at heart of the information and consultation process. So in a moment we will move on to have a look at the detail of what a measure actually is. But, before I do that, I would just like to touch on the different stages of the information and consultation process where the measures come into play.

So firstly, it is important to understand that the duty to inform and the duty to consult under TUPE are two separate things. There were a couple of circumstances where there might be a duty to inform only so no requirement for consultation and the first of those scenarios is where the employer has given the employees an opportunity to elect representatives but they have not done so. And then the second scenario, which is directly relevant to today's session, where the employer, who is consulting, does not envisage any measures itself. Now it is rare to find a scenario where there are no measures at all, but there is a point to be aware of which could mean that there is no obligation for the transferor to consult even though the transferee envisages taking measures. And I will come onto the detail of that in just a moment.

But first of all, if I turn to the next slide, we will have a look at what is covered by the duty to inform. So this slide sets out the various categories of information which is required to be provided under TUPE and that includes some basic information about the transfer including the fact of the transfer; the reasons for it; and also the expected timing. But the real crux of the duty, which we are focussing on today, is the requirement to provide information about measures which an employer envisages taking in connection with the transfer and there are two parts to this duty.

So firstly, the transferor must provide information about any measures which it envisages taking itself or confirm that there are none and then, secondly, the transferor must share the information that the transferee has provided under Regulation 13.4, in relation to the measures which the transferee envisages and, again, it needs to confirm if there are none.

So that is the duty to inform. In most transfers there will also be consultation. Now the duty to consult is triggered where the employer of affected employees envisages taking measures in connection with the transfer. And, if we look very closely at that, we can see that the duty to consult under TUPE is actually quite narrow. So it only applies where the employer who is consulting actually envisages taking measures itself and, as we have seen so far, in most cases it will be the transferor who is informing and consulting the transferring employees but it is going to be the transferee who is the party that envisages taking measures.

And what that means is that although the transferee has to notify details of those measures to the transferor, under TUPE the transferor is not actually obliged to then carry out consultation about the transferee's measures. Though, having said that, in the vast majority of cases that is exactly what will happen. So the transferee will notify its measures to the transferor and the transferor will then share that information with the employee representatives and then facilitate consultation with the employee representatives about the transferee's measures. And a key reason as to why that happens in practice, as well of course the fact that employers generally want to do the right thing by their employees, is that the Tribunal has held that the information and consultation process has got to allow a period of time for voluntary consultation, even though the duty to consult under TUPE is not triggered. And for those who are interested, that was the finding in the case of Cable Realisations Limited and GMB Northern.

The last point to mention here is that, where there is a duty to consult, the requirement is that consultation must be carried out with employee representatives with a view to reaching agreement about the proposed measures and that is really going to be the crux of the consultation process, regardless of whether that consultation is carried out under TUPE or on a more voluntary basis, the focus of the consultation is generally going to be around the measures.

As a final point before we get stuck in to the detail of what a measure actually is, I just wanted to touch on why it is important for both parties to make sure they comply properly with the respective parts of that obligation.

The main risk under TUPE is that there is a penalty of up to 13 weeks' pay per employee in relation to a failure to inform and consult and that liability is joint and several between the parties. There is a special circumstances' exemption, but it is very difficult to come within that and I am not going to go through the detail of that one today.

It is also common for liability to be apportioned under contractual indemnities and that can be either directly between the transferor and the transferee, where there is a direct contractual relationship, or via a chain of indemnity involving the customer of services where the transfer is happening between two contractors. And, where that happens, the party who is at fault usually has to indemnify the other party for any liability incurred if the employees or their representatives bring claims. And latterly, of course, it is better for the employees and everybody involved if everything happens as it should and we have a smooth transfer process.

So now we have the context around the framework for the consultation process, we will move on to take a detailed look at what exactly we mean by measures. I will give you a bit of an introduction and then Jane is going to take us through some specific examples and there is also going to be an opportunity for you join in with some polls.

So we have seen that the duty to inform and consult is triggered where the employer envisages taking measures in connection with the transfer, but what exactly do we mean by measures?  Well, unhelpfully, there is no definition under TUPE to help us identify what a measure is and that means we need to look to case law, and the message that comes out loud and clear from case law, from the tribunals, is that measures is given a very wide interpretation. In fact, it will cover any action, step, or arrangement, which is taken in connection with the transfer and as measures has such a wide meaning it is important for an employer to carry out a detailed assessment of the current arrangements in order to identify potential measures so that it can notify the necessary measures.

And we would recommend that, as well as looking at the more obvious things like terms and conditions of employment; and if there are any plans for any redundancy or restructuring; the transferee should also look at discretionary benefits and also more general working practices to make sure that it is identifying anything that is going to change in connection with the transfer. And one point to note on that, of course, is that when drawing up measures' plans the employer will need to bear in mind the extent to which TUPE might prohibit it from implementing measures that it would otherwise like to do. So, for example, the transferee cannot simply decide to harmonise terms and conditions of employment, because that is then going to be void under TUPE.

So in a moment Jane is going to run through some specific examples in relation to the guidance that we can take from case law but, before she does that, there are two points that I just wanted to pick up on as to what is meant by "envisaging". Now an employer must inform and consult about the measures which it envisages taking, but what exactly does that mean?  Well, this has been considered in case law and it was held that envisages simply means visualises or foresees and, in short, the employer must have some definitive plan or proposal in mind, so mere hopes or possibilities will not be measures.

Now, as I said, we would always recommend that a transferee carries out a thorough assessment of existing employment terms and discretionary benefits and also other working practices to identify potential measures so that those measures can then be communicated to the employees. The reason for that is that, being clear about measures, at this stage, is likely to lead to a smoother transfer process and better employee relations in the long run as well as being a requirement under TUPE.

Interestingly, however, there is no positive obligation under TUPE for an employer to carry out such an exercise or even to take reasonable care to try and identify measures. And that is not to say that a transferee can simply bury its head in the sand and the employer does have a duty of care not to make misleading statement when it is notifying measures but there is no duty to proactively try and identify measures. So I am going to handover to Jane now who is going to take us through some specific examples.

Jane: Thanks Rebecca. So this is where you get to participate. So we have got three scenarios that, in a moment, Suzie is going to help bring out with a poll and each of these three scenarios is based on a case. So we are going to do the three polls to give you a chance, having heard Rebecca with the overview, what you think the answer would have been in each of these cases and then I will run through what the answer actually was so that you can see if you have got them all right and test your knowledge that way.

So Suzie, if you could put up the first poll please on salary and payroll. So the question is, "is changing a payroll date a measure?"  I can see the answers coming in, which we will share in a moment when we have got a good number of you responding. If you want to share that Suzie... the results. Ooh, there is a bit of changing their mind maybe... I do not know, but we will share the results - you can see that "yes" is the overwhelming answer there, and a little bit of hesitation at the bottom. So we will see who is right, when we go on to talk about the case in a moment.

So Suzie, if you could do the next poll please - the one that says "case load". So the question here is, "is a change in job description and case load a measure?"  So there are some answers coming through and again... I think if we share that one Suzie, we have got a good response now. Again the overwhelming answer there is "yes", a little bit more divided on the "maybe" and the "no". So, again we will pick that one up in a moment and see if "yes" was, indeed, the right answer.

And then finally Suzie, the last quiz on this slide... so, "is a general reduction in manpower a measure?"  Interesting. Okay if we share the results of that one Suzie, a little bit more evenly split here but with that... with "yes" still coming out on top, but not by quite such a margin. Okay, well let us see what the answers were then. If we could stop the poll Suzie and move on to the next slide, that would be great.

So the first one then, "is a change in payroll date slightly affecting salary a measure?" Well the case we are talking about here is a Scottish Employment Appeal Tribunal case from 2010 and it involved the sale of a care home from Mrs Todd to another entity. And Miss Strain, who was one of the care home workers, and various other people claimed that they had not been consulted with properly. Now the particular things that they said were measures which had not been consulted about properly where the consequence of the fact that rather than agree that the buyer would simply pick up paying from the end of the month, what happened was Mrs Todd who was the transferor and the seller, she paid the individuals for the first few days of the month. I think the sale took place on 4 January or something like that.

So she paid them for the first few days and then the buyer picked up from there, and the consequence of that was (a) they got paid a little bit for the month, slightly earlier than they otherwise would have done. That had a tax consequence for some of them which was referred to as a tax rebate, which was a little bit confusing because that was not exactly what it was, as it transpired in the case. And there was also something with the EAT never properly understood which is clear in their judgment - something about holiday pay as well.

But these were quite small sums because they were quite low paid care worker employees and actually there was no detriment in terms of finance, it was just a cash flow issue and, in a couple of cases, people were actually slightly better off from a tax perspective. But there was absolutely no consultation at all about this and, in fact, they did not... the whole consultation was pretty poor, they did not invite employees to be elected as representatives. And I think, as we go through these cases, you will see that the better the quality of the consultation generally, perhaps the stronger grounds you are on, if there is some sort of breach. But here the consultation and the information exercise was really, really poor.

So you are probably hearing where this is going (laughs) from what I am saying. Those of you who said, you thought this change in payroll would be a measure - you are absolutely right, that is what the EAT said. This was not an inevitable administrative consequence of the transfer. The change of payroll was something that the transferor and the transferee had agreed between them, so this is one of those cases, actually, where it was the transferor's measure as much as the transferee's and, as Rebecca said earlier, often we are talking about transferee measures, but here it was actually both parties.

And one of the appeal points was that in the Employment Tribunal only Mrs Todd, as the transferor, had been held liable and she appealed against that and said "no, it should be joint and several" and she won on that.

So what this case tells us is that the changes have to be not simply as a consequence of the transfer and they do not necessarily have to be negative. And perhaps, slightly surprisingly, given the fact they were not negative, the award in the first instance was 13 weeks' pay, so the whole amount, and was reduced on appeal to seven weeks' pay which is still quite high. But, as I mentioned earlier, context is key and there were comments that you know... "these were low paid employees; they were worried and concerned about the impact of this; and there was no effort to properly explain it or to reassure them". And therefore it was right that the penalty was set fairly high for that, even though the changes in the EAT's words, "were of very limited significance". So if you voted yes on that one - well done, you were right.

So let us move on to the next one. So this is about caseload and work type really. So this is a case involving Marks and Spencer and again in the EAT decision. Marks and Spencer decided to outsource what they called their Profit Protection Operation, which was basically preventing theft in the stores and the preferred bidder was Securicor, who they eventually outsourced to and there were about 200 Loss Prevention Investigators affected including Mrs Baxter.

And what happened after the transfer was that Securicor refocussed the type of theft they wanted the Loss Prevention Investigators to concentrate on and they refocussed it to external, so new customers coming into the shops and stealing as oppose to internal theft from other staff. And so the change in job role was refocussed but it was still within the existing job description that they had at Marks and Spencer. And there was also part of the findings that the reason for doing the outsourcing, in the first place, was that Marks and Spencer had identified that they were sort of lagging behind in terms of their approach to theft prevention - they were not really up there with the way that most major retailers did it. And so they always wanted, whether they outsourced or did it internally, to reduce the number of thefts and focus on those which were in the majority external.

So on this one it was held that that change of emphasis was within the job description and so it was not a measure. There was also a complaint that they were now required to go through a different reporting mechanism for internal investigations and again it was held, well that was not necessarily in connection with the transfer and was not a measure. So because M&S always intended to refocus things and drive up the external theft arrests, this was all found to be in the context of their business; it was not in connection with the transfer; and it was not a measure.

It can be, I think, quite hard to distinguish these concepts but, as I mentioned in the Todd and Strain case, the general consultation exercise was really bad. In contrast the one that M&S did in this case... you know they had taken a lot of care to plan it properly, it was exemplary on many levels and so I do think that background and context does sometimes influence these cases.

If you are not sure, I think it would be sensible, if the commercial considerations allowed, to err on the side of caution and talk about it anyway. But sometimes, obviously, that... the commercials dictate otherwise.

If we move on to the next one... so this is a very entertaining case to read if you fancy a bit of deeper looking at this. It is actually... you will see it is in the Chancery Division, not in the Employment Tribunal or Employment Appeal Tribunal and that is because it was about the privatisation of a dockyard. Sorry, losing my voice. It is about the privatisation of the dockyards under the Dockyards Services Act 1986 which basically included equivalent provisions to TUPE on information consultation.

And there were six unions involved and they were all implacably opposed and obstructive to the privatisation of the dockyards; they did not want it to be commercialised; and they basically refused to engage in consultation constructively at all. And they asked for all sorts of information about the bids that were received in response to the privatisation tender; they wanted the calculations and assumptions sitting behind those. And what the Court did, it reminded itself, as Rebecca has reminded us, that measures are... you know of the widest import and include any action, step or arrangement but mountain power projections in and of themselves are not necessarily measures.

Here it was known that the Royal Navy's requirements for the docks to be used was going to reduce anyway because their core programme was reducing, so again that was not something that happened because of the TUPE transfer, it was not in connection with the transfer. And so where positive steps do reduce manning levels would be a measure, like redundancy programmes, if you are just looking at natural wastage; a decline in the activity generally that everybody knows about, that is not a measure in connection with the transfer.

The other point was, when it became clear that this actually was going ahead and the Secretary of State was not going to back down, the union got engaged quite at the last moment and then started talking about some of these measures. And what the Court said was "well, yes consultation may change measures envisaged and it may impact on the time left for consultation if people do not get involved earlier on", so it was very critical of the union and quite interesting in that regard.

Okay, we are going to do a couple more quizzes and then I will just briefly touch on two more cases before I hand over to Liz. So if we could do the first poll on this one, Suzie. These ones are not, with the exception of the first one... the other two are not based on cases so you will be... we will all be a little bit in the dark on those.

So the first one is, "is changing a profit share scheme from the transferor to the transferee a measure?" Okay the answers are coming in. Okay do you want to share the results on that Suzie? It is a fairly common pattern here that is emerging, so most people think "yes" and then a bit of a "no" and a "maybe". Okay we will see. Next one please Suzie. The clue is in the picture, "is changing the format of the Christmas party a measure?" I think we are going to get a slightly different answer on this one. Want to share the result, Suzie. So we have got a resounding "no" and a little bit of a "maybe". Okay... and the last one is about gym membership - that is a picture of a gym. I do not go to gyms very often, but I believe that is what it is. Right, "is changing gym membership a measure?"  Okay, do you want to share the result Suzie please? This one is much more divided, pretty evenly split but still on balance a bit of a "yes".

Okay well let us see what the first one told us. So this one is about the share scheme, as we said, a profit related share scheme. The parties are Mighty and French and again it is an Employment Appeal Tribunal decision and briefly the facts were that the Claimant, so French and Others, had originally transferred from Sainsbury's and they transferred initially to a company called Pitman Bowes and then by the time the case came to be heard they had transferred again to Mighty.

And when they were at Sainsbury's, they had an Inland Revenue approved profit sharing scheme. Sainsbury's board would apportion a certain amount of the profits each year to this scheme and then individual employees would be given an award, which was made up partly of Sainsbury's shares and partly of cash. And the criteria for the award did not have any element of personal performance attached to it, it was all about the company performance and some other variables.

Now Pitman Bowes did have a share scheme... sorry did have a profit related scheme but it did not have any shares attached to it, it was all about cash and there was an element of personal performance which determined the award. So they were claiming that they should have been allowed, after the transfer to continue to participate in the Sainsbury's... to get Sainsbury's shares and that Pitman Bowes and then Mighty had to operate that same scheme as Sainsbury's had. And the EAT said "well, the purpose of TUPE is to protect employees obviously, but it cannot result in things that are unjust, absurd or impossible" and as a completely separate corporate entity neither Pitman Bowes nor Mighty had any access to Sainsbury's' shares. There was a suggestion from the Claimant's Counsel they could have gone and bought them on the Stock Market but that was deemed as impractical and they would not have been party to the sensitive commercial information that would have dictated the size of the pot in the first place.

So it was a sort of common sense judgment I think. They said "but just because you cannot replicate that one, you do have to give something that is substantially equivalent". And they made an interesting comment, the EAT, that they would expect the union, if they are the representatives, or the staff themselves to be able to sit down and negotiate a new arrangement that was substantially equivalent with the employer. So if it is going to produce an unjust, absurd or impossible result, it is not going to transfer.

Okay if we look at the next one, the Christmas party. So the Christmas party on the gym, there is no reported cases on these so we are all in the dark and I think if you put "it depends", that would be where I would be with this, until I knew more about the exact arrangement. So the Christmas party, you think "well yes every year each employer surely decides... you know how they are going to operate that". But if, for example, your employer traditionally brought everybody from all over the country to HQ Town for their party and they paid for travel and they paid for overnight accommodation and the changes that the transferee is going to say "well we will have the party but you have got to pay for yourself", you can see that begins to look like a measure.

Similarly the gym membership, you know if the level of membership changes, if it is going to be a gym that is further away; if they cannot continue at the same gym... you know if it is something that impacts on the ability of the employees to benefit from the membership, then again it begins to look like a measure. So I am afraid those two, until you knew more about the facts and the actual proposal, those would be a "maybe" in my view.

Okay, If we can move on to the next slide Suzie, I just wanted to touch on, finally before I hand over to Liz, a case which is about... it is an important principle, it is perhaps not all square with measures, but it often comes up in that context. And there were two issues, the first issue was Miss Bernerdon suffered a personal injury when she was with the transferor employer and when she moved to Pall Mall, the issue was first, "does the liability for that personal injury TUPE transfer?" The answer to that was "yes it does". And then the supplemental question was "well, can the transferee benefit from the insurance that the transferor had for that injury because any employer liability insurance they take out will only cover the period post transfer?".

And there was a common sense reading of Regulation 5.2 and they said that talks about... you know the rights of the transferor and not just the liabilities and therefore the transferor's right to benefit from that insurance policy did transfer and the transferee could claim the benefit of it and then that could be passed on to Miss Bernerdon. The public sector is a bit different because they self-insure and we have not had a case yet, that we are aware of, about other types of insurance like private medical. But those sorts of private medical arrangements can be very tricky because often the transferee's insurer will not accept somebody who is already cover for an existing condition, because they will say it is a pre-existing condition and it is excluded. So we have to... those things can get quite tricky to deal with, so I just flag it as something to look out for. So I am now going to hand over to Liz for the pension's part.

Liz Wood: Thanks Jane. So where changes are being proposed in relation to the transferring of an employee's pension provision following a TUPE transfer, this will also feed into the mix when identifying your measures. And I think it would be helpful here just to take a step back and summarise what happens in relation to pensions on a TUPE transfer, because that will inevitably impact on whether the receding employer looks to change pension provision for the transferring employees and how that then impacts on the TUPE information and consultation obligations.

So just in terms of a reminder there are, in very broad terms, two types of pension scheme, which might be available to the transferring employees before the transfer. And the reason why I have flagged this is because each type of scheme is treated differently for the purposes of TUPE.

So the first is an occupational pension scheme. So what do we mean by this?  So essentially this is a pension arrangement set up under trust to provide retirement benefits for employees. And I think... it is fair to say that it used to be the case that this would be an employer's own pension scheme arrangement, but it is no longer exclusively the case because many employers now make use of multi-employer arrangements. So lots of different employers that are not associated taking part in that occupational pension scheme. Well known examples of that include NEST and the People's Pension, but many master trust arrangements and that is an occupational pension scheme.

And in terms of TUPE, where an occupational pension scheme is provided to the transferring employees before the transfer date TUPE operates so as to carve out the transfer of rights, obligations, liabilities, duties in relation to that occupational pension scheme from the transfer. So that occupational pension scheme remains with the transferor; people become deferred members of that scheme and that is sometimes referred to as the TUPE pensions' exclusion.

Occupational pension schemes can provide either defined benefit or defined contribution benefits but key, as I have mentioned, is that rights relating to that do not transfer but instead there are minimum legal obligations on the transferee to put in place minimum standard pension scheme provision following that transfer. So it can look and feel quite different to what was on offer before the transfer, but there does need to be that thought process as to, if there is an occupational pension scheme on offer before the transfer, what the transferee is going to do after that.

By contrast is the position for contract based pension scheme, so these are often known as personal pension schemes and they are often provided through an employer and then they are called group personal pension schemes or GPPs. But they are different to occupational pension schemes because they are a contractual arrangement between the employee, the member of the scheme and the provider. So usually an insurance company and that includes GPPs, so essentially it is a collection of individual policies between the provider and the employee and these type of schemes exclusively provide to find contribution benefits.

So they are very common but actually so are occupational pension schemes, so again it is that due diligence to check what is on offer before the transfer to decide what is going to happen. And key here is that rights relating to personal pension schemes do transfer as would be the case for any terms and conditions as part of a TUPE transfer exercise. So for example, if there is a particularly generous employer contribution to that personal pension on offer before the transfer, let us say a 10% or 15% contractual right to employer contributions, that is going to be a right that will transfer in respect of those transferring employees.

So the next slide just gives a summary of the two differences and really allowing you to have that thought process; what is on offer; and what do we need to think about in terms of what we might be doing after the transfer in terms of pension provision.

Moving on to the next slide, so "what is the measure for the pension purposes?" Well, as I have mentioned, there is this pensions' exclusion in TUPE that said rights, obligations, liabilities relating to that occupational pension scheme, they are not subject to that automatic TUPE transfer principle, but actually that has given rise to a question around whether changes relating to an occupational pension scheme are a measure for the purposes of TUPE information and consultation obligations.

We had an Employment Tribunal decision from the early 1980s called Natterk involving the transfer of a cinema and there was a very late in the day information and consultation process and a claim of failure to consult resulted from that. Particularly allegations that there had been no information or consultation as to the loss of on-going occupational pension scheme benefits. So this would be a common situation even now, as I have mentioned, because that occupational pension scheme remains with the transferor and here, interestingly, the Tribunal held that changes to occupational pension scheme benefits would not be a measure for this purpose, because of this pensions' exclusion I have mentioned two points on this.

First it is an Employment Tribunal decision so it would not be binding on other tribunals or courts, but I think the key point really is, I think this was wrongly decided. In terms of the general purpose of TUPE the case law that we have seen more generally since then, I think it is very unlikely that a tribunal would decide that in the same way now. Pension changes are clearly something that is going to be very important to employees and their representatives and something on which a union or representative will really want to be consulted with and will want to understand those changes.

So best approach - definitely assume that pensions is going to be included in relation to measures and that is the case for any kind of pension change.

Okay so moving on to the next slide. So what I have just said really, in a nutshell, and I think you know even if we are having very small changes... so what happens in relation to a group personal pension scheme is that the transferee cannot provide exactly the same one following a transfer. But even if it is going to one of those contractual obligations to provide the same level of employer contribution, I would expect that even a change of GPP would be a measure and that you tell the employees and the representatives about that or the transferor does on the transferee's behalf, in the way that Rebecca has described.

And obviously, if more radical changes are being made to the pension because for example occupational pension schemes were offered before the transfer, again that would be definitely something that should be considered to be a measure and should be treated as such.

So moving on to the final point I wanted to cover here before handing back to Rebecca. It is a case called Hagen and ICI Chemicals and although this was a pensions' decision, looking at pensions' changes, it does have wider applications in terms of the information it has provided as part of an information and consultation process. This was in relation to a group of employees who were subject to a TUPE transfer from ICI Chemicals, part of its Engineering Division to a company called Redpath Engineering.

Now statements had been made by ICI as part of the TUPE information and consultation process as to the likely pension provision that would be offered to the transferring employees following the transfer. And they had been specifically been told that pension provision would be broadly comparable, broadly similar to ICI's own pension scheme. Afterwards, it became apparent that actually the pension provision had not been as expected... as suggested by ICI and a tribunal claim was brought.

And the Court in that case held that the transferring employees had a claim for negligent misstatement. They had been give misleading information about pensions in anticipation of that TUPE transfer, and that was the case and ICI was liable for that, even though that information had been honestly given. So key take away here is that employers do have a duty to take reasonable care in making statements, particularly in a TUPE transfer context.

There are lots of reasons for that, but you know the transferor has access to obligations... access to information relating to the transferring employees that has been given to them by the transferee. Statements are likely to carry significant weight with those employees and so, in summary, information given in connection with a TUPE transfer really should be as accurate as possible, because if they are misleading that could result in claims.

So that is all I wanted to say on pensions and measures, so I will hand back now to Jane and Rebecca for the final section.

Rebecca: Thanks Liz, that was really helpful. So now that we all understand measures, I thought it would be useful to round off the session with some factual notes for when we are managing consultation on measures.

First of all, I mentioned earlier that TUPE requires consultation with a view to reaching agreements on the employer's measures. It is the role of the employee representative to listen and share information with employees regarding the measures which are envisaged and also then to be the voice of the employees presenting their views and feedback to the employer in response.

As we saw earlier, TUPE requires that this consultation with a view to reaching agreement on the measures but, importantly, I just wanted to note that the employee representatives do not have any rights to veto measures so what needs to happen is that the employer should give due consideration to any feedback that they get from the representatives, but it is not actually obliged to accept the employee's proposals.

The second point to mention is that the extent of the measures which are envisaged is important to determining the timing to the consultation process. So although there is no set time period for consultation under TUPE, it has got to be carried out in good time before the transfer and what is "in good time" is essentially going to depend on the extent and nature of the measures to be consulted about. So it is important that that is given some thought early on, so that the parties are clear on what is an appropriate time for opening the consultation process.

There is a note on the slide to highlight co-operation and this is basically thinking about co-operation between the transferor and the transferee during the consultation process. So the duty to carry out consultation is primarily a matter for the transferor, we have seen today that the focus of the consultation is generally going to be around discussion of the transferee's measures. And it is common in practice for the transferor to invite the transferee to attend certain consultation meetings so it can give them an opportunity to present to the employee representatives directly and also to answer any Q&As on the measures directly as well. Generally we find that a well-run process is going to be a collaborative one, so it is certainly worthwhile the parties getting together to think about that at the outset.

And the final point that I wanted to note is in relation to further consultation. So it is important to remember that communicating measures, as part of the TUPE consultation process, is often only the start. If the measures involve workforce restructuring or redundancies or changes to terms and conditions or anything like that, then it will also usually be necessary for a full consultation to be carried out after the transfer in order for the transferee to implement the proposals that it has communicated.

And in some cases that might include a requirement for additional collective consultation and I just wanted to note that because, where it is known early on that that is going to be the case, it can be factored into the process and in some circumstances it is also possible for collective consultation on redundancies to run side by side with the TUPE consultation. So again those are sort of factors to be thought about at an early stage so that they can be factored in to achieve a smooth consultation process.

And on that note, I mentioned earlier that identifying potential measures that the transferee would like to take is all well and good, but it is important to bear in mind the extent to which TUPE might actually prohibit or restrict the employer from implementing measures in certain respects. And that includes where measures involve changes to terms and conditions of employment.

And I just wanted to flag that we are going to look at that in the next session in this series which will be early in the summer, so do watch out for a date for your diaries on that. We will share something shortly.

And on that note, I think we have got a few minutes left for questions, so I will just hand back to Jane and she can tell us what you have all been asking.

Jane: Thanks Rebecca. So there is one I can deal with quite easily, which is about, "what happens if your measures change and new ones come to light?" Well it is an on-going obligation up to the point of transfer, so if something new does come up, then you are going to have to pick that up and you could be criticised and subject to a penalty if you do not.

There is one, Rebecca, it would be good if you pick up. It is, "how does TUPE affect a fixed term employee who is going to reach the end of their contract before the transfer, where there is going to be a change of provider before the expiry of the fixed term contract?"

Rebecca: I...

Jane: I think... sorry, go on.

Rebecca: I was just going to say... in that circumstance, if the fixed term is actually due to expire before the transfer is due to happen then the individual will not be an affected employee for the purposes of consultation. So there will not be an obligation to inform and consult in respect of that individual. But having said that it is common for employers to bring them within the process in some respects, so either to have a separate conversation with them just to explain what is happening to their colleagues and why they are not included with it. Or even to bring them in within the process, potentially because there might be an opportunity for the contract to be extended, in which case they would become affected. So just to be clear about, what the status is for them at the outset and how that will be dealt with and bear in mind that it could potentially change leading up to the transfer date.

Jane: Yes, and then very briefly there is one, "is there a minimum legal timeframe that we need to consult on the TUPE if there are no measures, about 100 employees?" And I think I would say the Cable people got criticised... the case you mentioned about needing to leave time for voluntary... because they tried to say that a factory shut down of two weeks in the summer counted towards that period. So I do not remember, off the top of my head, if they gave a particular timeframe for that case. Rebecca, can you remember?

Rebecca: No, I do not think there was a particular timeframe, it was just the principle that you cannot assume that just because there is no requirement for consultation that it can be dealt with in a few days, it has got to be in good time still. I think we generally work on the basis that if there is absolutely no measures which is quite rare, but we sometimes find particularly if there is an intra-group process, then the shortest timeframe that you should have for consultation is about two weeks. And generally going upwards from there, the more time available the better. For a consultation process that does have significant measures, we would normally expect three months to be a reasonable period. So that hopefully gives you a bit of guidance and timeframe for working out what sort of falls in the middle of that.

Jane: Okay, thanks. Well we have slightly over run, so I am going to call it to a close there. But for those of you who we have not managed to get to your question, we will come back to you afterwards and thank you for putting your names in there, because we can see who has asked a question and get back to you by email.

So I would like to say thank you very much to Rebecca and Liz and to Suzie for doing all the technical stuff behind the scenes.

I hope that has been helpful to you all but obviously you have got our contact details if you have got any other questions that do occur afterwards. Do look out for that next session on Changing Terms and Conditions and please do fill in the feedback form if you get a chance and when you receive it by email shortly after this session. So thank you very much for joining and enjoy the rest of your day.

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