Something else BIS missed about TUPE

The new fangled TUPE provisions contain the express ability for an employer at Reg 4(5B) to change a term incorporated from a collective agreement where (a) the variation takes effect more than one year after the transfer and (b) after the variation rights are no less favourable overall.  The problem is that complying with these requirements causes significant problems with an often overlooked section of TULRA 1992.

TUPE continues in 5(C) that “Paras (5) and (5B) do not affect any rule of law as to whether a contract of employment is effectively varied“.  Which got me thinking as to other rules of law.

One of the ones it appears BIS did not think about was Section 145B of TULRA 1992.  To save a quick rummage through the statute books, section 145B gives individuals the right not to have their employer make an offer to have any term of employment no longer determined by a collective agreement.

So, for example, individuals transfer to a new employer which wants to have nothing to do with collective agreements or trade unions.  The new employer grumbles (they usually do) but abides by the immediate terms of the collective agreement to remain on the right side of TUPE.  It then avails itself of the ability to change under TUPE 4(5B).  It makes sure the offer is not less favourable and in certain circumstances is actually more favourable as they are offering better benefits (e.g. PHI).  It would appear, however, to fall straight into the prohibition in Section 145B TULRA.

The remedy for a breach of s.145B appears somewhat confusing. Or at least it did to me.  There is the financial element (£3,600 for the employers temerity for simply making an offer in compliance with TUPE but having forgotten about s.145B and simply having made the offer) in 145E(3), which I’m calling the “temerity award”.  Then

“(4)Where an offer made in contravention of section 145A or 145B is accepted—
(a)if the acceptance results in the worker’s agreeing to vary his terms of employment, the employer cannot enforce the agreement to vary, or recover any sum paid or other asset transferred by him under the agreement to vary;
(b)if as a result of the acceptance the worker’s terms of employment are varied, nothing in section 145A or 145B makes the variation unenforceable by either party.

After a bit of double reading (and a diversion as to whether “worker’s agreeing” is grammatically correct), I would suggest (a) deals with the worker agreeing to vary, e.g. at a future point in time, but not actually varying; and (b) with when the variation has actually occurred.

If an employer complies with TUPE it can vary terms incorporated from a collective agreement, but if this means the individual will not be covered by that collective agreement then s.145B applies and prohibits the change.  But if the individual has actually varied their terms the change is effective.  If, however, the individual has not yet varied, they can presumably cherry pick the best terms and refuse to implement the variation.  Which is a bit odd or appears to contradict what Reg 4(5B) of TUPE is trying to achieve.

The only ways in which the employer avoids paying the £3,600 temerity award are, as I see it, presumably either to negotiate collectively with the trade union it does not recognise over the collective agreement it did not sign.  I can’t see a union agreeing to the change to the collective agreement.  This leaves the employer in the position of making the offer, paying the award and only then implementing the change if the employees do actually vary the contract.  Alternatively the wording of 145B(1)(a) appears to sanction picking off individual employees two by two (readers can insert their own Noah’s ark joke here) if the variations are different.

I’m unsure as to what irks me most about this.  That TUPE doesn’t work with s.145B, that I’d forgotten about s.145B altogether or that the employer will need to take a temerity award gamble on each employee’s contract it wishes to vary.  Or something else.  It might be the grammar.

One thought on “Something else BIS missed about TUPE

  1. New Regulation 4(5B) of the 2013 TUPE Regs provides that the rule in the new reg 4(4) (which makes a variation of contract void if the sole or principal reason for it is the transfer) does not apply in the circumstances set out in reg 4(5B). The effect is that 12 months after a transfer the terms derived from collective agreements can be varied. This simply implements the option for Member States in Article 3.3 of the Acquired Rights Directive (2001/23/EC). Previously there had been no time period after which terms derived from collective agreements could be varied if the reason for the variation was the transfer. Crucially regulation 4(5B) does not say that variation can take place without going
    through any applicable collective bargaining arrangements. Nor does it say that variations can only be made through negotiations with individual employees.

    In fact Regulation 4(5C) goes on to say that any variations to terms after 12 months, must ensure that any rule of law as to when a contract is effectively varied, must be observed. One of those rules of law is the provision in section 145B of TULRCA. As you say, this provides that an employer cannot enter into individual negotiations with an employee (who is a member of an independent trade union recognised, or seeking to be recognised, by the employer) to vary terms of employment where a collective bargaining process is in place or where the union is seeking to be recognised for collective bargaining, if the aim of the employer’s individual negotiations is to circumvent collective agreement through a union. Therefore, Regulation 4(5B) can coexist with section 145B of TULRCA.

    In some circumstances, an employer might not be able to vary terms without falling foul of section 145B. But, this would not necessarily always be the case. The new regulation 4(5B) enables employers to make variations in the circumstances set out, provided it can do so in compliance with other rules of law on making such changes. We don’t think there is a conflict between Regulation 4(5B) and section 145B of TULRCA

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