TUPE Podcast Series - Information and Consultation Obligations

In this ninth episode of our TUPE Podcast Series, Katie Glendinning, a Partner in the employment team, will examine the information and consultation obligations under TUPE. 

 In this episode, Katie will cover:

• Who qualifies as the 'appropriate representatives' of the affected employees? 
  
  
• The obligation to inform employees. 
  • How should the information be given? 
  • When should the information be provided? 
• The obligation to consult with employees.  
  • What are measures?
  • Who should carry out consultation on any proposed measures?
  • When should the consultation start?
• Consequences of failing to inform and consult.
  
  
• Employee liability information
  • What must be included 
  • The implications of failing to provide it.

Please get in touch with our employment lawyers for advice if you have any questions or need assistance with TUPE.

Transcript

Hi, my name is Katie Glendinning, and I'm a Partner in the employment team here at Clarkslegal. This is the ninth and penultimate session in our Podcast Series, and today, I'll be looking at the information and consultation obligations under TUPE. 

It is worth clarifying at the start that the obligation to inform is separate to the obligation to consult. 

Certain information relating to the transfer must be provided to representatives of all employees who are affected by the transfer or who may be affected by measures taken in connection with it. 

However, the separate duty to consult the employee representatives is only triggered if the employer of the affected employees envisages taking measures in connection with the transfer. 

Also, when we look at affected employees, the concept is, of course, wider than just those employees who will transfer. There are three possible categories of affected employees.

• Firstly, those who will be transferred 
• Secondly, those who are not being transferred to the transferee but whose jobs may nonetheless be affected; and 
• Finally, those whose jobs may be affected as a result of the transfer 

Now, TUPE generally only requires the transferor or transferee to inform and consult with ‘appropriate representatives’ of the affected employees. 

These will be:

• Union representatives - if the affected employees are represented by an independent trade union; or 
• employee representatives who have authority from all of the affected employees to act on their behalf in relation to the TUPE transfer; or 
• entirely new representatives specifically elected for this purpose. 

 However, some flexibility around this was introduced for transfers taking place on or after July 2024  if the employer has fewer than 50 employees or for employers of any size, where fewer than 10 employees will be involved in the proposed transfer.

This change to the law permits employers to elect to inform and, if necessary, consult, directly with impacted employees where there are no existing appropriate representatives  and the employer has not invited any of the impacted employees to elect representatives.  While this exemption can be beneficial for simple transfers, it may still be more sensible to proceed with elected representatives if the duty to consult on measures will  be triggered, because it is likely to be onerous to undertake consultation with up to 49 employees on a direct basis.

If a union is recognised for only part of the affected workforce, the employer must ensure that the remainder of the workforce is appropriately represented. This may mean that the employer will have to offer those employees the opportunity to elect representatives for the particular TUPE exercise.

Unless the employer is covered by the exemption previously covered, the employer must offer unrepresented employees the opportunity to elect representatives for the TUPE information and consultation process. It cannot inform and consult the employees directly without first giving them a reasonable opportunity to elect those representatives.  Provided the employer has given those impacted employees an opportunity to elect representatives, if they do not do so within a reasonable timeframe the employer must provide the TUPE information directly to the affected employees themselves in writing. In this situation, there is no obligation to consult the employees. 

So now let's look at the obligation to inform itself. As mentioned both a transferor and transferee have an obligation to provide certain information to the appropriate representatives relating to their own affected employees. The provisions on information are themselves complicated so let’s break these down.

• Firstly, what information should be given? This includes one, the fact that the transfer is to take place, the date or proposed date of the transfer, and the legal reasons for it. 
• Secondly, the legal, economic, and social implications of the transfer. 
• Thirdly, the measures which it envisages it will take in connection with the transfer, in relation to any of its affected employees. If there are no measures envisaged, it must state that.
• Fourthly it should include the measures in connection with the transfer that it is envisaged the other party will take in relation to their affected employees. Again, if there are no measures envisaged then it should state that. Obviously this particular requirement doesn't apply to the transferee as it is a separate duty on the transferor only. 
• Finally, suitable information relating to the use of agency workers working for it, the part of the business where they work, and the type of work that they carry out. 

So what do we mean by we say envisages. For an employer to envisage taking measures there must be some definite plan or proposal which it intends to implement. The mere possibility of a measure being taken will not ordinarily suffice.

What are measures? Measures are given a wide interpretation and essentially mean any act or omission of the employer. The transferor will rarely be taking measures in connection with a transfer. It is usually the transferee that takes measures i.e. it looks to reorganise a business or seeks to change terms for example. However, as mentioned earlier, the transferor has a separate obligation to inform its employees of any such measures that it envisages the transferee will take.

How should the information be given? Information must be given to the appropriate representatives or the employees themselves, if the exemption applies, by being delivered to them i.e. by hand or by posting it to them, to an address notified by them to the employer.

For trade union representatives the information should be sent by post to the trade union at the address of its head or main office. Unfortunately, the regulations are silent as to whether the information should be provided in writing. However, case law suggests that it should and it's definitely good practice to do this.

And finally, when should the information be provided? Helpfully, there is no timeframe within which the information must be provided. It's of course the obligation to provide information long enough before the relevant transfer to enable the employer of any affected employees to consult appropriate representatives.

So now, let's move on to look at the obligation to consult. The obligation to consult does not always arise. It only arises, where the employer of an affected employee envisages that it will take measures in relation to that affected employee in connection with the TUPE transfer. In that case the employer must consult the appropriate representatives of that employee, with a view to seeking their agreement as to the intended measures. Again, this can be a confusing area so let's examine it through a series of questions.

Firstly, when does the transferor take measures? As the obligation to consult only arises when the employer envisages that it will take measures in relation to its own affected employees the transferor is under no duty to consult on the transferee’s intended measures. Although, it does have a duty to inform its employees of these, as mentioned above. Therefore it is not common for the transferor to trigger the duty to consult, as it will not often be taking measures itself in connection with the transfer.

Secondly, when does the transferee take measures? The transferee is not required to consult the transferor’s employees prior to the transfer, about measures that it envisages it will take after the transfer, e.g. changing their payroll date, for example. This is because although it is taking measures, the duty to consult only attaches to the employer and the transferor's employees do not become the transferee’s employees until after the TUPE transfer.

All of that said, in practice the transferor and transferee generally undertake joint consultation with the transferring employees pre transfer as a matter of good practice.

Finally, when should the consultation start? As with the obligation to provide information, the regulations do not give a fixed timeframe within which consultation must take place, unlike for example, in collective redundancy situations. However, consultation must be meaningful and therefore consultation should be taken in good time, so that it can be completed by the time the transfer takes place.

So, let's move on to look at what happens when there's a failure to inform and consult.

If the transferor or transferee fail to inform or consult or fails to appoint appropriate representatives a claim can be brought in the Employment Tribunal for compensation. A claim must be brought within three months of the transfer date. A tribunal may allow claims to be brought later if it was not reasonably practicable to lodge the claim in time; however, that's a difficult hurdle to overcome.

If the transferee fails to inform and consult its affected employees, it alone will be liable in respect of that default. If the transferor however, fails to inform consult its affected employees the transferor and the transferee are jointly and severally liable, meaning that a claim can be brought against the transferor, the transferee or both, in these situations.

If a complaint is found to be well-founded by the tribunal it may award appropriate compensation. This will be an amount the Tribunal considers just and equitable considering the seriousness of the breach, subject to a maximum of 13 weeks’ gross pay for each affected employee. A week's pay is not capped for this purpose and therefore is based on the actual amount the employee is paid gross.

It is worth keeping in mind though that there can be no failure in law if a proposed TUPE transfer does not ultimately take place.

Finally let’s look at the special circumstances defence.  An employer may have a defence to failing to inform and consult if it can show that there were special circumstances which meant it was not reasonably practicable to comply with the obligations. However, it’s a high bar and it must show that it took all reasonable steps to comply in the circumstances.

And finally, we should look at employee liability information or ELI. The transferor is obliged under TUPE to provide the transferee with certain information about the transferring employees. This must be provided in writing or in some other readily accessible form and should be provided at least 28 days before the transfer. Once it’s given, the transferor must provide written notification of any changes to the employer liability information after it has been provided up to the date of the transfer. 

The regulations set out what the ELI must consist of, which includes:

• Information on the identity and age of each transferring employee
• Information contained in their written particulars of employment
• Details of any disciplinaries  or grievances over the last two years
• Details of legal actions taken by any transferring employee against the transferor in the same period and any potential legal actions which the transferor has reasonable grounds to believe may occur
• Information of any collective agreement which will impact the transferring employees following the transfer

So, what happens if there is a failure to provide the ELI? In this case, the transferee can bring a claim against the transferor in the tribunal within three months of the date of the transfer.  The tribunal can order the transferor to pay compensation to the transferee of such amount it considers just and equitable having regard to any loss suffered by the transferee. This is subject to a minimum penalty of five hundred pounds per employee in respect of whom information was not provided or was not adequately provided. Unfortunately, TUPE doesn't give any guidance as to what happens when ELI is provided but is inaccurate although case law suggests that the transferee would bring a claim as above on the basis that the transferor has failed to comply with its TUPE duties.

That brings us to the end of the session, and I hope you found it helpful. If you have any questions about what I’ve discussed today or need assistance with TUPE, our experienced employment team would be more than happy to help. Finally, be sure to look out for the next TUPE podcast in this series.