TUPE’s complicated, can be illogical and may prove expensive.
Guest expert Ginny Hallam, employment lawyer and director of employment law firm, Halborns, explains how you can get TUPE to work for you when taking over a new block.
TUPE stands for ‘The Transfer of Undertakings (Protection of Employment) Regulations 2006’.
Its role in life is to ensure that employees follow the work that they’re employed to do. So, if one property management company loses a contract then (generally) the incoming management company ‘wins’ the employees attached to that contract (warts and all) because of TUPE.
That’s a good thing if you’ve lost the contract as you save on redundancy costs!
But what if you’ve won the contract and it comes with employees? Worse still, what if the employees have baggage in the form of employment tribunal claims and unpaid wages for which you become liable because of TUPE?
You can’t sack the employees because of the transfer because that will be automatically unfair. You can’t change their employment terms to fit with your own.
So, what do you do? Ginny explains:
Take a deep breath and don’t panic
- TUPE might not apply. For example, if you’ve won a contract to manage a property which is currently looked after by the tenant or the property is managed by a property management team of employees who work for lots of clients the chances are you’re not going to be legally forced to take on the employees. Working out whether TUPE applies can be difficult so take early advice.
- Think hard about whether you want the employees. Obviously, employees that come with baggage are never going to be an attractive proposition but could you deal with those liabilities in the deal that you strike with your client? Would you be saving on necessary recruitment costs? Do the employees come with invaluable knowledge about the properties?
- Have a look at the agreement with your client and think about the deal you’ve struck with them. Do you need to revisit the terms to ensure that the risks attached to transferring employees are reflected within the commercial terms?
Get up close and personal
- Check with your client if there’s any contractual requirement for the outgoing employer to provide you with information about the employees.
- Remember that the outgoing employer is required to provide you with basic information about the transferring employees at least 28 days before the transfer. Such information includes disciplinary issues, claims issued, grievances raised and sick leave in respect of each employee. Don’t forget that you can sue the outgoing employer for a minimum of £500 per employee if they don’t provide you with such information at least 28 days before the transfer.
- Talk directly to the employees that you’re about to take on. Get to know them and secure their knowledge and trust early on to ensure a ‘fast start’.
- Talk to the employees about your plans for the contract. Ensure that you keep ‘surprises’ to a minimum to avoid claims arising.
- Engage with the outgoing employer; whether you like it or not you’ll be liable if you fail to tell them about changes that you intend to make to the transferring employees’ work (of up to 13 weeks’ pay per employee).
- Make sure that you address whether or not TUPE applies during negotiations with your prospective client.
- Take into account TUPE risks and liabilities when you negotiate your terms and make sure they reflect any liabilities that you’re taking on.
- Ensure that your terms with the client makes it clear that if you lose the contract then you are not liable for any termination costs associated with the employees.
So, become a TUPE lover not a TUPE fighter. Take time to consider your options.
Act early by taking advice and then reacting commercially to the risks involved.
And, don’t forget that you can sue the outgoing employer if they fail to give you the required information about each employee that you take on.
Ginny Hallam is an employment lawyer and managing director of Halborns, an employment law firm.