TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006) is a set of rules that work to protect employees when the business they work for is sold or transferred to a new employer.

New TUPE regulations came into force on 31 January 2014 and ACAS have now published some very helpful guidance to help employers and employees better understand what the changes mean and how they may affect their business. The PDF of the ACAS TUPE guide can be found at:

http://www.acas.org.uk/media/pdf/i/h/Handling-TUPE-Transfers-The-Acas-Guide.pdf

The key points to note about TUPE are:

• When a business is sold or transferred the employees assigned to, or employed by that business will automatically transfer with the business and become employed by the new owner of the business.

• Employees will transfer to their new employer on their existing contracts of employment and with all their years of continuous employment protected. Changing the contracts of transferred employees can be very difficult and legal advice must be taken at the earliest opportunity.

• The outgoing employer must provide information about the transferring employees to the new employer not less than 28 days before the transfer.

• Employer must inform/consult with the transferring employees before the transfer and if there is no trade union this may require the election of employee representatives.  From 31 July 2014, micro businesses (those with fewer than 10 employees overall) are not required to elect representatives to inform and consult where there are no existing recognised trade unions or elected employee representatives. However, they must still inform and consult directly with each individual employee regarding the transfer.

• If an employee is dismissed either before or after a transfer and the sole or principal reason for the dismissal is the transfer, it will be automatically unfair.

TUPE is a complex area of law and anyone thinking about purchasing or taking over a business with employees really needs to take legal advice about the employees they may inherit at the earliest possible stage.

Employees being transferred can find this a very unsettling and worrying time and may also be best taking legal advice about their position if they feel they are not being treated correctly.

Paul Whitfield can be contacted on 0161 2831276 or paulw@foxwhitfild.com

www.foxwhitfield.com

Employment Law Solicitors – Head Office based in Manchester with offices located throughout the United Kingdom.

Update 14/05/2015:

This case has now been referred back to the Employment Tribunal and British Gas has now appealed that again. It is unlikely to be before the end of 2015 when that appeal is heard. The Employment Tribunal it did not consider reference periods and how to quantify a claim for the commission element of holiday pay. The principle that commission must be included in holiday pay is established law now, the still open questions is how to quantify it.

Our best advise at the moment is that in cases where a worker has no normal working hours, or has normal working hours but their pay varies according to amount of work done or the time of work employers should use an average of the last 12 working weeks to calculate how much holiday pay should be paid. If your ways of working mean that 12 weeks would not be representative, such an a system where all commission is paid annually, then 12 weeks may not be the appropriate reference period. In any case we advise all employers to take legal advice on this as soon as possible. Fox Whitfield are already dealing with multiple claims where employers have not changed their policies and are facing claims.

Paul can be contacted on 0161 2831276 or paulw@foxwhitfild.com

www.foxwhitfield.com

Employment Law Solicitors – Head Office based in Manchester with offices located throughout the United Kingdom.

In a new twist on the law relating to holiday rights the European Court of Justice (ECJ) has held that holiday pay should take into account commission payments.

Currently the UK law, the Working Time Regulations, make it clear that employees are entitled to holiday pay based on their basic salary alone. This case suggests that is now incorrect as it is not compatible with European Law.

In this example an employee’s remuneration was made up of basic salary and commission. The commission was about 60% of the total remuneration. The ECJ said that the commission payments were directly linked to the performance of his work under his contract of employment. Therefore, the commission should be taken into account in the calculation of his statutory holiday pay.

This case is now being referred back to the Employment Tribunal which will need to consider how to interpret the Working Time Regulations following this decision. It is likely that they will do so in a way that will have far reaching implications for many businesses and their employees.

One possibility is that the Tribunal will say that statutory holiday pay should be based upon 12 month average normal pay. That would ensure that any commission payments paid over a year would be included. Another possibility is that they will use a shorter reference period of 12 weeks. This could mean sales forces trying to take their holidays immediately after busy periods to maximise their holiday pay. We shall have to wait and see how the details of this develop.

There are two other cases being heard in the EAT during the summer of 2014 looking at the extent to which overtime payments should also be included in the calculation of statutory holiday pay.

So what should employers do now?

1) Do nothing. Wait and see how these cases develop the law as they take their time going though the Tribunal and appeal systems. It may be that the UK courts limit the effect of the ECJ  decision.

2) Assume the UK law is going to have to change to comply with the European decisions.  Take the business decision to look at changing your holiday pay and commission rules and policies now. The risk of this is that we have yet to see how the UK courts will apply the law and you could end up having to change your rules twice.

So far, most employers seem to be waiting to see what happens next before making any changes.

We will update you as things become clearer, or more muddy.

Paul can be contacted on 0161 2831276 or paulw@foxwhitfild.com

www.foxwhitfield.com

Employment Law Solicitors – Head Office based in Manchester with offices located throughout the United Kingdom.

Paul Whitfield has specialised in employment law for over a decade. Paul looks at some FAQs about Employment Tribunal Claims.

Is it true that Employment Tribunal Claims are increasing?

No. In fact the most recent statistics from the Tribunals for October to December 2010 show a drop in the number of employment tribunal claims by over 50%. However, even this lower figure represents almost 80,000 claims being lodged against employers by employees in that three month period.

What are people claiming?

The most common employment tribunal claims (30%) are for unfair dismissal, breach of contract or redundancy. 19% were for unpaid wages.  17% were for holiday pay or other Working Time Directive claims and 14% were associated with Equal Pay. The majority of remaining claims dealt with discrimination and there was a trebling of age discrimination claims in the period.

Are these statistics good news for employers?

It would seem so but the statistics may not represent the reality of the situation. A recent survey conducted by the Chartered Institute of Personnel and Development (CIPD) suggests that more and more employers (7 out of 10 surveyed) are using compromise agreements rather than risk employment tribunal claims. As a result although there are fewer claims it does not necessarily mean that there are fewer disputes.

The CIPD survey found that over 50% of employers served has experienced a malicious complaint by an employee and that the Tribunal system meant that employers had no protection against such claims.  The legal costs and management time costs of dealing with claims can be very high even if the claim can be successfully defended. In most Tribunal claims each party has to pay their own legal costs even if they are successful. Costs are only awarded in a very small number of cases where one party has acted unreasonably.

Why use a compromise agreement?

A compromise agreement is the only effective way for an employee to give up their statutory employment rights usually in exchange for a payment from the employer. The agreement has to comply with strict rules and the employee has to take independent legal advice before signing the agreement.  The CIPD survey found the average payment being made under a comprise agreement was £10,000. Fox Whitfield’s experience is that more and more disputes are being settled at a very early stage by the use of compromise agreements.

How easy is it to lodge a claim with the Employment Tribunal?

It is very simple. The ET1 form can be filled in on-line and with a click of a button submitted to the Employment Tribunal. There is currently no fee to pay to lodge a claim but this is under review. Employees only have a short period, normally of three months, to lodge a claim.

What do I do if I have a claim made against my company?

It is essential to act quickly as the response to the claim must be presented to the Tribunal within 28 days. Legal advice should be sought urgently to ensure the response can be prepared and submitted within that time. Failure to lodge a response in time may result in you being unable to defend the claim.  Fox Whitfield will normally offer a fixed fee to draft and lodge the response for its clients.

Paul can be contacted on 0161 283 1276 or Paulw@foxwhitfield.com or click here for more options.