If you are currently one of the many schools who are considering joining an Academy Trust, it is important to know the implications of the TUPE transfer on staff conditions of service.
When a school transfers from local authority (or an existing academy) to academy status, its staff will automatically transfer their terms and conditions to the academy under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The academy takes over responsibility for the staff and inherits any liability in relation to disciplinary and grievance action taken by the local authority. Transferring employees retains their continuity of service.
TUPE also applies when a service provision change takes place, for example when a school decides to terminate its contract with its cleaners/caterers, and award the contract to a different cleaning/catering company, or to bring it in-house. The school must follow the transfer criteria even if it applies to just one employee.
TUPE is a complex piece of legislation and you may wish to seek HR and legal advice to ensure that all of its requirements are met. The following advice is not exhaustive but it is intended to provide an idea of the issues that should be considered in relation to TUPE, prior to seeking academy status. ACAS guidance and recommendations have been included and expanded upon. TUPE tends not to apply to free schools which are starting from nothing, but will apply where an existing school was previously in place.
What is TUPE?
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE regulations) were designed to protect employees against unfair treatment as a result of a transfer of their employment.
Who transfers to the Academy?
All staff who were employed by a local authority school, immediately before the transfer to academy status, will automatically transfer their terms of conditions to the academy under TUPE regulations.
An employee can object to the transfer, but if they refuse to transfer this is deemed to be a resignation, and the employee will not be entitled to redundancy pay, nor will they be deemed to have been dismissed, so generally cannot claim unfair dismissal, although there may be some exceptions.
TUPE what protection does it provide?
TUPE protects transferring employees from unfair dismissal and from changes to their terms and conditions where the reason for the change is the TUPE transfer, unless it is with their agreement, or the academy feels certain that it can show an employment tribunal that it is for an economic, technical or organisational reason which entails changes in the workplace. However, because TUPE is a complicated piece of legislation, any organisation considering making a dismissal or making changes to terms and conditions, following a TUPE transfer, is advised to seek legal advice on its individual circumstances to ensure that all of its requirements are met.
Contrary to common belief, there is no fixed timescale after which TUPE protection no longer applies, although it may be deemed to be no longer applicable by an employment tribunal on an individual case basis. Harmonisation of terms and conditions is not an acceptable reason for changing terms and conditions.
Under the TUPE regulations, an academy inherits liability in relation to disciplinary and grievance action taken by the old employer (in this case the Local Authority). The academy does not inherit criminal liabilities and some benefits under the occupational pension scheme. It may be possible for an academy to agree an indemnity against any future losses related to inherited responsibilities from the Local Authority, prior to finalising the transfer. Look out for any outstanding equal pay claims.
Employee Liability Information and Due Diligence
Under the TUPE regulations, outgoing employers have to provide information about transferring employees to the incoming employer, and this is called Employee Liability Information (ELI). However, employers often seek additional information when considering a transfer, and this is called due diligence. These two methods of gathering information should be treated as part of the same process and run together. However, the due diligence additional information is voluntary. This is because the information, delivered as part of a due diligence process, forms the basis of warranties and indemnities in the commercial agreement concerning the TUPE transfer.
Under TUPE regulations the following employee liability information must be provided:
- identities of the transferring employees
- age of the transferring employees
- employment particulars of the transferring employees
- active/live disciplinary and grievance records from the last two years of the transferring employees
- any collective agreements which are in force
- any outstanding claims the transferring employees have against the outgoing employer.
The academy also takes over trade union recognition and any collective agreements with trade unions which were in place at the time of the transfer (unless there is a proposed measure, see below). Governing bodies should familiarise themselves with the terms of any such agreements as part of the Academy Transfer Process, so that they are fully aware of their responsibilities. The more schools a Trust inherits, the more complex this can become, so it’s useful to keep a track of all unique collective agreements.
The TUPE regulations require both the existing employer and the new employer to inform/consult with staff in a TUPE situation. In a transfer to academy status the school governing body is both the old employer (in most cases along with the Local Authority) and the new employer. The governing body therefore has a duty to inform/consult with all affected staff about the transfer through either a recognised union or elected employee representatives. Governing bodies should comply with the information and consultation requirements but this may not always be possible because of time constraints. If challenged both parties would have to have good reasons for not informing / consulting.
The new employer is required to set out in writing to the existing employer any proposed measures. There is a duty to consult with unions and staff in relation to any proposed measures. Measures include any proposed changes which affect or may affect in the future the employee’s terms and conditions.
Transferring staff can be complex and time consuming, FusionHR can support both current and prospective employers with TUPE transfers and any other HR matters. Please contact your HR Advisor to discuss how we could help or call one of our friendly team on 01924 827869.
Source: Guidance taken from ACAS