According to this article in Newstrack India there is a growing trend in the USA for employers to ask new potential new recruits in job interviews for their Facebook log-in details.   It may well not be illegal to make the request (although it may breach Facebook’s rules) but why on earth would an employer want to access an employee’s private Facebook account? The information revealed could well prove to be a poisoned chalice.

Mate, don't drink it.

At first glance the employers making these requests in job interviews probably think they are being very smart, as it will allow them to know what the employee is writing about the company they’ve applied to (or other job applications they’ve made) or, wider still, what sort of person the candidate really is.  In other words do they post photos about alcohol or drug use (and abuse) or boast about their sexual antics at parties?

So what if they do?   Those sorts of status updates may well look unwise once the hangover has subsided, but they shouldn’t be used as part of the recruitment process, or subsequently.  An employee who is asked to hand over their log-in details is well within their right to refuse and, if the prospective employer therefore decides not to offer them the job, the candidate may well consider they had a lucky escape. Who would want to work for a company that not only wants to know about your private life, but intends to make a value judgment on what they see there?

And that is why employers shouldn’t do it.  What do you do with the material you discover?  Access to a person’s Facebook page may well disclose their age, marital status, whether they have kids, and their sexual orientation.  If they are subsequently rejected for a role, even if it is because the employer doesn’t like the candidate’s support for Accrington Stanley or their choice of leisure wear, let alone their habit of getting drunk on a Sunday night and pulling a sickie on a Monday morning, you can be sure that a claim for discrimination will arise if the employer could have gleaned any information relating to a protected characteristic under the Equality Act.

As Thomas Gray wrote in 1742

Where ignorance is bliss, ‘tis folly to be wise.

Update – Tuesday 27th March – The Information Commissioner has warned employers against requesting Facebook log-in details – see this report in The Guardian. 

Related posts:

1. 40% of UK Employees Criticise Their Bosses on Facebook and Twitter
2. Facebook “Joke” Turned Sour: Why Employers Need To Take Note
3. Employer was Justified in Sacking Employee for Comments on Facebook

Why Should Bosses Want Employees’ Facebook Details? originally appeared on Jobsworth by Michael Scutt on 26/03/2012.

Ever wondered how, as an employer, you should treat your office workers? Here is an amusing infografic from training agency Tutorcare that puts it into pictures for you. I have my doubts about what is going on in the picture about fire safety – could be a grievance for sexual harassment waiting to happen – but maybe I’m being harsh.

Infographic by: TutorCare

Thanks to Gareth of TutorCare for sending me this infografic

Related posts:

1. Employers Watch Out: It’s Office Party Time!
2. Employee, worker or neither?

How to Treat an Office Worker originally appeared on Jobsworth by Michael Scutt on 01/03/2012.

Choices, choices

Many employees often suspect they have been unfairly placed in the “departure lounge” when their company decides to restructure. Sometimes it is obvious there has been unfairness, or discrimination, in the process.  On other occasions it’s much harder to prove even if suspected and the recent case of Dabson v David Cover & Sons Ltd doesn’t help employees much.  On the other hand, employers will be relieved.

The main requirement for an employer seeking to make redundancies is to conduct a fair selection process.  The old mantra of “Last In First Out” can be problematic these days, so some other method needs to be found.  When a business decides to stop trading in a certain product then it may be fairly easy to say that all employees associated with that product should be made redundant, unless they can be redeployed elsewhere in the business.  Or if a unique role is being removed then the selection of the person carrying out that role is fairly clear cut.  However, what happens when you have ten people in a team and the employer decides it needs to reduce the size to five persons. How does an employer choose which employees to select?

The answer is to have a selection process using objective criteria. It’s not foolproof and how an employer scores the employee can be criticised.  For instance in De Belin v Eversheds the EAT held that it was wrong for an employer to artificially favour a woman on maternity leave in a selection when that had the effect of selecting a male colleague for redundancy.   There is still room for an employee to claim that they were unfairly scored against it.  Employees often claim that the manager scoring them either didn’t know them well enough to make a judgment or bore some grudge or were in some way biased against them. In the case of Mr Dabson, he argued that the manager who scored him did so unfairly and acted improperly in scoring him as he did. There had been a history of friction between the Claimant and the line manager.  On the facts as reported in the caser the final decision does look harsh on the employee.

However, the EAT held that the employer had acted reasonably and repeated previous law to the effect that it is only in a case where there is obvious mistake or an absence of good faith that the scores should be scrutinised.  Those will probably be exceptional circumstances and it makes it very difficult for an employee to challenge in these circumstances.  If employees want to run this type of argument they will need to gather their evidence together   as soon as they can.  Employers can’t relax completely though.  Challenges will still arise but provided an employer can justify their decision and show they have followed a fair and reasonable decision making process they should avoid an adverse finding at Tribunal, which isn’t to say that grievances won’t continue to be issued or letter of claim sent.

This decision suggests that employees don’t have things all their own way, despite what is often said.

Related posts:

1. How Should Employers Select Employees for Redundancy?
2. Redundancy – Have You Got The Right Pool?
3. Redundancy – know your rights!

Redundancy Selection: Now Harder for Employees to Challenge? originally appeared on Jobsworth by Michael Scutt on 22/06/2011.

Tomorrow I am chairing the SBK Legal and Strategic Guide to Workforce Restructuring.  It’s an all day conference with some very interesting speakers and covering a wide range of topics.  Click here for details.

There will be presentations on how to vary contracts of employment, how to adjust pensions, a review of the government’s planned employment law review, how to maintain a positive working relationship with Unions, as well as a session on “Realising redundancy savings: abiding by the rules to avoid a later backlash”.    The law on redundancy and procedure is particularly interesting to me and I will be especially looking forward to that session..

In the meantime my answer to the title question, pending tomorrow’s conference is: “with care”.  Many appeals and Unfair Dismissal claims arise from employees who claim they have been unfairly selected for redundancy.  How should employers who have identified the need to reduce headcount go about it?

Remember that roles are made redundant, not people.  If it looks like a person has been selected for redundancy not because of the role they do but because of who they are, a complaint may be sure to follow. The maximum compensatory sum that a Claimant can be awarded by an Employment Tribunal is £68,400, plus a “basic award” based on length of service and age, currently £400 per week of service. However a person who is chosen for redundancy because of a discriminatory reason, aka a “protected characteristic” under the Equality Act 2010 may be able to bring a claim that has no cap.

In cases where a whole team or desk is being closed, or a layer of management is being stripped out, it can be much harder to argue unfair selection.  It’s really only where there are, say, ten people performing a role and the employer wants to reduce that number to five, that selection processes need to be utilised to make sure the process is fair.

Selection criteria need to be as objective as possible – not always an easy task for an HR department tasked with drafting them – and must avoid any discriminatory factors.  For instance, LIFO (Last In First Out) whilst being objective may also discriminate against employees on grounds of age, because the newest people may be the youngest, although clearly not in every case.  Similarly, relying on attendance records may be unfair on disabled people if they have more time off sick. To minimise the risk of challenges disability-related absences should be factored out of the equation for redundancy selection purposes. Absence from work because of pregnancy or maternity related reasons should also be ignored, for obvious reasons.

In a sales team a good objective measurement might be the number of sales completed, but that is not always foolproof: an aggrieved employee might argue that they were given the worst accounts to maintain or they were hindered in some other way.  Having said that it can be very difficult for an employee to make such an argument stick.

Regular appraisals properly conducted also can assist in the redundancy selection process, although I have my doubts about “performance reviews”.  In many cases they just serve to de-motivate employees, but they do provide a historical record of how the employee has been working over a period of time and not just a snapshot at the point of termination.

What employers should try and avoid, if at all possible, is subjective criteria – soft skills are very hard to measure and has potential for an employee to claim that the person undertaking the assessment was either biased against them (their line manager for instance) or did not know them well enough to carry out an effective assessment (because the assessor was not their line manager).

As someone who regularly advises employees on redundancy selection issues, I would urge employers to try and be as objective as possible when making selection decisions.  Seek volunteers as well, because then there is likely to be less chance of issues over selection arising.

It’s a minefield, but one that can be negotiated with proper preparation and forethought. Remember the Scout’s old motto: Be Prepared!

I don’t give advice (legal or otherwise) through this blog, but if you need help with any of the above issues please do contact me at Dale Langley & Co at michaelscutt@dalelangley.co.uk.

Related posts:

1. Redundancy Selection: Now Harder for Employees to Challenge?
2. Redundancy – know your rights!
3. Redundancy – Have You Got The Right Pool?

How Should Employers Select Employees for Redundancy? originally appeared on Jobsworth by Michael Scutt on 22/03/2011.

How much tax should employers deduct from termination payments? HMRC have announced a change to  the way that lump sum termination payments have to be taxed by employers from this coming April.

As is well known, the first £30,000 of a compensation payment can be paid free of income tax and national insurance contributions, provided that it is paid as compensation for “loss of office” or employment. This commonly applies on redundancy, but can apply in other situations too.

Any balance above the £30,000 is taxable at the employee’s marginal rate of tax.  This is because of a long established concession contained within ss.403 – 404 of the Income Tax (Earnings and Pensions) Act 2003. Useful links from the HMRC website are here and here.

Such payments are usually made once a compromise agreement or COT3 has been entered into  and the employee’s employment has terminated.  The compensation payment won’t have been included on the P45.  It is important that the payment must not be contractually binding, otherwise the tax concession is lost.  Most commonly this will affect those employees being made redundant.

Usually, the employer will deduct basic rate tax only from the balance and then to leave the employee to account to HMRC in due course for any higher or additional rate tax that might be due.   This can, depending on when the payment to the employee is made give them several months before that tax has to be paid – usually by 31st January following the end of the relevant tax year.

In these straitened economic times, HMRC has decided to clamp down on this practice and will, from April 2011, require employers to deduct basic, higher and additional tax from such payments.  The effect of this will be that higher and additional rate  employee tax payers will receive the net sum, rather than having to hold some of the payment back to pay their tax.

It will prevent them investing the higher or additional tax element themselves until they have to account to HMRC for it and pocketing the interest gained on it during that time.  The detailed guidance for employers will be published next month.

The taxation of payments on termination can be a complicated issue and I recommend that you take expert advice from a solicitor or accountant if you have any concerns.

Please note that nothing in this blog constitutes legal advice to you and is just my understanding of the law.  I only give advice via Dale Langley & Co and please do get in contact via michaelscutt@dalelangley.co.uk if you need some.

Related posts:

1. When is an Ex-Gratia Payment a Notice Payment?
2. What lies ahead in 2010?

Termination Payments: Taxing Times Ahead for Employers originally appeared on Jobsworth by Michael Scutt on 20/01/2011.

First day back from the festive break and The Times, which must be short of contributors at the moment, rehashes the old argument about employees and their lawyers holding poor innocent small businesses to ransom.

Yesterday’s edition contained an opinion piece from Helen Giles,  HR Director of a business called Broadway which apparently provides services to homeless people.  Her theme?  “Stop legal parasites feeding on small business”(*) This morning the story made it onto the Today programme on Radio 4 and a much more useful discussion, chaired by Evan Davis.

It’s fairly standard stuff which has been heard many times: employers held to ransom by speculative employees and their grasping legal advisers, invariably acting on a “no win no fee” basis.  Ms Giles’ argument is that employees have too many rights and it is impossible for small businesses and charities to address poorly performing employees for fear of facing an unfair dismissal or discrimination claim. She relates how, for instance, at a dinner she attended with other HR directors

“they both agreed that however much effort was put into managing an organisation well in human terms, some staff will stick in a claim because they know it’s likely to be lucrative”

and

“two-thirds of claims are settled out of court … often because the costs of fighting, irrespective of the weakness of the employee’s case, are prohibitive”.

Later in her article she writes

“The employee is very often supported by lawyers who have no intention of arguing a flimsy case in court but who know how to sabre rattle and hold their nerve until the employer settles on the eve of a hearing”.  She advises that if you “Google ‘employment law’ you will find endless numbers of websites of these parasitical creatures”.

It’s all fairly tedious and there is no easier target than a Claimant lawyer.  It reminded me of the (long ago) days when I used to do some criminal law.  Politicians, newspapers, ordinary people and, sometimes, clients were always keen on tougher sentences for offenders other than themselves, their partner or child.  If Ms Giles has the misfortune to fall out with her employers I assume she will not be googling for her nearest parasite, sorry well qualified legal adviser.

Are Employers and Employees legal rights well balanced?

She overlooks the underlying reality of the situation which is that employees face a tough decision in challenging their employers: the employee relies on the employer to pay their mortgage and bills. This is what I think Clive Howard of Russell Jones and Walker meant when referring to there not being a level playing field between employer and employee. Raising a grievance rarely improves anyone’s career prospects and for an employee to walking out claiming constructive dismissal is highly risky.  Despite the plethora of laws, especially in the area of discrimination, that allegedly  make it impossible for managers to manage, very few discrimination claims succeed at Tribunal.

But, having said all this, there is something in what she writes.  ETs do take too long to deal with cases and some employees undoubtedly use unfair dismissal and discrimination claims to bring employers to the negotiating table.  I wrote about this last November in the Law Donut blog. If you want to reduce the number of speculative  claims then introduce “cost shifting” at the end of the case or, to put it another way, get the loser to pay (this power is already available to ETs in cases where one party has acted unreasonably, but Tribunals remain reluctant to use it).

Ms Giles suggests something along these lines (I think) but rather complicates matters by calling for an “initial assessment” (by whom?) of a claimant’s “prospects”. If a Claimant was at risk of having to pay the employer’s legal costs if their claim failed it would certainly sort the wheat from the chaff, as would requiring claimants to pay a fee to issue their claims.  That would stop the serial litigants in their tracks and would also be cheaper than jailing them, as Ms Giles suggests.

However, introducing costs shifting would further encourage the no win no fee brigade (and thus prompt more anguished headlines from the same people who criticise claimants pursuing their legal rights at the moment) who would then try and flog Claimants “After the Event” insurance policies and thus make the funding of employment litigation as complicated as it has become in personal injury cases.  Following Lord Justice Jackson’s report into civil litigation costs and the ongoing government review, it may not be possible for a winning Claimant to recover the cost of the ATE premium from the loser in future, but we will have to await the government’s review of civil litigation to see what comes of this.

In my blog post on Law Donut (above) I suggested that the ET system be abolished and amalgamated with the Court Service as a means of addressing these problems and, probably, saving the state money. Somewhat radical maybe but employment law is increasingly complicated and a world away from the National Industrial Relations Court and the original Industrial Tribunals of the early 1970s. As @ljanstis reminded me, the administration of the Courts and Tribunals Services is to be merged in April, so full merger of all practice and procedure is  probably not that off the wall.

Judges in Courts would be more robust over awarding costs when appropriate and it would also end the difficult jurisdictional issues that can arise in some cases.  It would probably suit employers more than employees, especially if the three month deadline for issuing proceedings remained.

What do you think?

What we need is a sensible debate in this country over employment law, rights and procedures. sadly, Ms Giles undermines the sensible underlying points she makes through the use of sensationalist language which may get a good headline but doesn’t assist the real issues at all.

(*) Sadly it’s behind the paywall so I can’t link to it.

PS Thanks to @Bleak_Flat for bringing the article to my attention in the first place.

No related posts.

Parasites and Legal Rights originally appeared on Jobsworth by Michael Scutt on 05/01/2011.

There May be Trouble Ahead ...

Hooray! Christmas looms ever larger on the horizon and we even have some (slightly premature) snow to put us in the mood.  The annual season of eating, drinking, feeling sick and, yes, the Office Party, will soon be upon us. Employers could end up with a nasty hangover if they’re not careful.

I wonder if in these times of austerity there will be a temptation to party like it’s 1999? Maybe, and according to Personnel Today, employers could be placing themselves at risk by not putting in place a policy setting out what is acceptable behaviour at the Christmas party.

Apparently two-thirds of employers don’t have any such policy and 7% of those employers they did survey revealed that they had suffered a problem at the last Christmas bash. The risks to employers arise from claims by other employees offended by over-exuberant behaviour, but also from discrimination, harassment and bullying.

For a useful article on how to draft a “Party Policy” have a read of this.

We usually see one or two clients each year who have got into trouble having over-indulged too much. What employers and employees must remember is that the office party is still a work event and work rules (and employment laws apply).

At the time of the last World Cup I wrote about the potential risk of allowing staff to watch football matches, which might have the effect of excluding those employees (probably mainly women) who weren’t interested, thus leading to resentment.  You might think that an office party would suit everyone, but almost inevitably it will involve alcohol and some people, for example, Muslims might feel excluded if the only option is a trip to the local pub where everyone else gets plastered.

More fundamentally, religious minorities might object to the office celebrating Christmas but not their particular religious festivals.

There is merit in having a behaviour policy because then everyone knows where they stand and provided the policy is implemented consistently it makes it hard for any one person to say they have been treated unfairly.  Having said that, I do slightly struggle with the idea of the employer having to set out basic rules of social engagement to its staff, and it risks treating them like children and being viewed like, heaven forbid, a Jobsworth!

Related posts:

1. Beware Festive Cheer (or what not to do at the Office Christmas Party)
2. What Should Employers do About Third Party Harassment: Equality Act 2010 #4

Employers Watch Out: It’s Office Party Time! originally appeared on Jobsworth by Michael Scutt on 30/11/2010.

How much can an employer be ordered to pay of it loses a claim for Unfair Dismissal at an Employment Tribunal? For many (especially small) employers an award of compensation to an employee following a finding of unfair dismissal could jeopardise the future of the business, sending it into bankruptcy or liquidation.

The maximum that a Tribunal can award is, currently, £65,300 plus a small basic award calculated on age and length of service (unless the dismissal is connected with health and safety or whistleblowing).  The employee has to be able to prove his/her losses and will be awarded such sum as the Tribunal feels is “just and equitable” in all the circumstances.  S.123 of the Employment Rights Act 1996 is the relevant piece of legislation and also says that the amount of the award is such sum

“having regard to the loss sustained by the complainant in consequence of the dismissal in so far as that loss is attributable to action taken by the employer.”

What if making that award would land the employer in financial difficulty?  Does the ET have to take the employer’s ability to pay into consideration when making the award?  The answer is no and that has just been confirmed in the case of Tao Herbs & Acupuncture Ltd v Jin [2010] UKEAT 1477_09_1407.  The Employment Appeal Tribunal heard that if the award the ET made had to be paid the business would go into liquidation.  The Court had no truck with that argument and said

“That is not the correct approach to the assessment of an award for unfair dismissal, which does not pay attention to the ability of the employer to pay … the possibility that the employer will be in difficulty paying an award is not a relevant consideration”

Daniel Barnett, to whom I’m grateful for bringing this case to my attention, commented that he thought this position might alter in future, especially if the making of a large award would lead to the company going bust.  I would respectfully disagree with him.  If Daniel’s right it means the ET would have to   carry out an assessment of the Respondent employer’s financial position and solvency in each case and that takes them far away from   their allotted purpose, which is to assess the fairness, or otherwise, of a dismissal.  Furthermore, each Respondent employer in every case would be advised to present accountancy evidence of their, no doubt, impending insolvency thus involving the ET in unwelcome time- consuming and expensive investigations.

So, if you’re an employer who might struggle to pay an award, the answer may be to try and negotiate settlement sooner rather than later if the employee looks like he might win.  There’s no reason why an agreed settlement can’t be paid in instalments to avoid cash flow difficulties. Better still, seek expert legal advice when the dispute with the employee arises and before it gets to litigation.

In another post I’ll look at the options open to an employee if the employer won’t pay up.

I will also continue with more posts on the Equality Act.

Why not sign up to the RSS feed or for email updates if you enjoy reading this blog?

If you need advice on any of these issues please contact me via michaelscutt@dalelangley.co.uk

Related posts:

1. Enforcing Unfair Dismissal Awards Part II
2. Unfair Dismissal Rights to be Restricted?
3. Riots, Looting and Unfair Dismissal

Unfair Dismissal: What if the Employer Can’t Pay? originally appeared on Jobsworth by Michael Scutt on 17/09/2010.

Everyone is talking about social media these days and no longer is it confined to the purely social.  Many businesses are using it to promote themselves; good heavens, even lawyers are getting into it.  But use of sites like Facebook, My Space, You Tube and micro-blogging sites like Twitter present multiple challenges to employers. 

There have also been well publicised examples of employees being caught out by their status updates on Facebook – like the woman who complained that she hated her boss and called him a pervert, forgetting that he was one of her “friends” on Facebook.  He read the comments and a beautiful friendship was ended.  Other employees have pulled “sickies” and posted that onto Facebook.  Bad move.  Not only will the boss probably get to hear about it, the employee will become the laughing stock of the internet as millions of people all over the world receive the news of the indiscretion via round-robin emails.

On one level employers may not be persuaded of the merits of Web 2.0 and the plethora of seemingly time-wasting opportunities that it provides.  There is a great risk that staff could become inefficient and unproductive in surfing Facebook all day, or watching video clips on YouTube and that must be particularly galling for those employers who see no business application for these new technologies.  The temptation might be to come down hard on employees but that may provoke claims for constructive dismissal or unfair dismissal.  In an environment where for some people, surfing Facebook is as natural as reading a newspaper or a novel, an outright ban on accessing social media may be unreasonable.

For enlightened employers who do see the benefits of Twitter, YouTube, Facebook and the humble blog, the challenges are increased.  Not only is there the risk that some employees will take advantage to spend time promoting themselves rather than the business, they may post inappropriate comments on the web and severely damage the reputation of the business.   Worse still, the employer may end up on the wrong end of an action for defamation.  No longer is it enough just to have a policy covering access to websites and use of email (and don’t forget to include mobile phones and Blackberrys/iPhones in those policies).

In my view, employers face three challenges;

1. Excessive use of social media leading to loss of productivity

      2.    Risk of reputational damage/unwanted litigation to the business

      3.    Avoiding inappropriate use/abuse of social media without upsetting employment relations

Employers need to develop a strategy for use of social media in their business. This should not only cover how the business intends to exploit web 2.0 for its own purposes, but also a policy governing how employees should use it, again not just for business purposes but also for private usage.  Don’t forget that younger members of staff (“digital natives”) may be much more in tune with social media than older people.  In order to avoid grievances or unwanted employment tribunal claims be consistent in applying the policy.  As a solicitor who often advises employees, I frequently hear clients say that “Flossy was only given a written warning for the same thing” when they’ve been dismissed.      

The policy needs to take account of how the business wants to exploit social media and a “one size fits all” model isn’t going to work.  Instead the business needs to ask itself these sorts of questions;

1. Do we want to use social media to promote the business?
2. Who in the business will be responsible for using social media?  Senior management or more junior staff?
3.  What guidelines do we want to set them (these will probably need to be more specific for more junior staff)?  The guidelines will need to go beyond banning obscene or discriminatory comments and give guidance on how the business wishes to be perceived in the wider-world.
4. How will usage be policed and what sanctions will be put in place for misuse or abuse?
5. Will usage of the company’s computers be allowed for private use of Facebook, Twitter, etc?  If so, will usage be restricted to lunch-breaks or before/after work?  A complete ban may be unenforceable or risks causing ill-feeling.

It’s not an exhaustive list and I would be pleased to hear from anyone with additional questions that ought to be added on.

To be successful, all users will need to be “on message”.  In turn this may mean getting all users to “brainstorm” to devise the “voice” of the business.   Social media offers massive potential for businesses to communicate their message, develop their identity and build their brand.  Having a successful social media policy is at the heart of getting that right.

I would welcome your comments on any of the above and if I can assist further please contact me on 0207 464 8433 or at michaelscutt@dalelangley.co.uk

Related posts:

1. Why Should Employers have a Social Media Policy?
2. Old News Rehashed:Employers Warned to Monitor Social Media Usage at Work
3. Social Media in the Workplace

Why Employers need a Social Media Policy originally appeared on Jobsworth by Michael Scutt on 26/01/2010.

I said 'TUPE, not toupee'

This can be a real headache for employers where they have “inherited” employees following a transfer of an undertaking under the TUPE (Transfer of Undertakings (Protection of Employment) Regulations 2006.  It is quite well known that if TUPE applies to a transfer then if the Transferor (let’s call it NewCo for ease if not originality) dismisses an employee from the transferee (OldCo) for a reason connected with the transfer, the dismissal will be automatically unfair, unless NewCo can show that an “economic, technical or organisational” reason applied entailing changes in the workforce.  TUPE has the effect of transferring all employment contracts and rights from OldCo to NewCo.

However, what is the situation where the TUPE transfer occurred some time ago and NewCo now wants to ensure that the employees from OldCo are on the same pay deal, the same holidays, sick pay arrangements etc?  This presents a problem for NewCo because Regulation 4(4) of TUPE provides that any variation to a term of a contract covered by TUPE will be

“void if the sole or principal reason for the variation is (a) the transfer itself; or (b) a reason connected with the transfer that is not an economic, technical or organisational (ETO) reason entailing changes in the workforce”

So, if the proposed variation is because of the transfer of the undertaking or is linked to the transfer but is not an ETO reason, the variation will not be legally valid, even if the affected employees agree to the change.  On the other hand if the proposed variation is because of the transfer but is an ETO reason then it can take place.  An ETO reason usually, but not always, entails reductions in the workforce but whether the proposed variation will be an ETO reason will usually be a matter for close factual analysis. 

 When employees seek legal advice on this issue it is usually the case that the proposed variation would adversely affect the employees, but it doesn’t have to be the case.  In 2007 the Court of Appeal confirmed that any changes that were beneficial to the affected employees would be binding.

Many people think that if much time has passed since the transfer of the undertaking (OldCo to NewCo) that is sufficient defence, but mere passage of time is not the whole answer.  The real issue is “what is the reason for the proposed variation?”  The fact that many months, or even years has passed, since the transfer is not going to be conclusive on its own. A case involving Dale Langley (my partner’s) previous firm, Langley & Co, called Taylor v Connex South Eastern EAT/1243/99 [2000] held that a lapse of two years was insufficient.  As ever though, as in all cases, they all turn on their own facts: this is a difficult area and legal advice should be taken (especially by employers) before proposing a variation that might fall foul of TUPE.   Even if TUPE is not engaged, an employer that tries to implement a unilateral change in an employee’s terms and conditions e.g. by reducing employee’s pay may find itself facing a claim for constructive dismissal and/or unfair dismissal.  Employers should proceed with care…

If I can assist please do not hesitate to contact me on 0207 464 8433 or at michaelscutt@dalelangley.co.uk.  Nothing contained in this post or anywhere else on this blog constitutes or is intended to constitute legal advice or creates a solicitor-client relationship between me and you the reader.

Related posts:

1. TUPE
2. TUPE vs Blancmange: Compare and Contrast
3. Solicitors get it wrong too

Harmonising contracts under TUPE originally appeared on Jobsworth by Michael Scutt on 18/11/2009.