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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 50751
Experience:  Qualified Employment Solicitor
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Hi again, Following on from my question.... The limited

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Hi again,

Following on from my question....

The limited company I work for is part of a small PLC which also owns another limited company.

I have just heard that the PLC is now intending on transferring all staff from the limited company I work for to the other limited company and hence operating a single limited company (and winding the other one done over a few years). All staff from my limited company will be TUPE'd. My understanding is that I will have to be TUPE'd on the same terms, if not better, than stipulated in my current contract and that my commission structure would have to remain the this the case?

Thanks, Jon

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today.

TUPE applies when a business, or part of one, is transferred to a new employer or if there is a service provision change, such as a new service provider taking over an existing contract.


If TUPE applies to a transfer, then the transferring employees will move to the new employer on the same terms they were employed under just before the transfer. Simply put, the new employer will 'step into the shoes' of their old employer. This means the employees will preserve their continuous service with the employer and can expect to transfer their contractual terms and conditions over.


The new employer may sometimes wish to try and change the transferring employees’ terms and conditions of employment. However, under Regulation 4(4) of TUPE any such changes are void, unless the employer can show they were in no way connected to the transfer or if they were required for an economic, technical or organisational reason (ETO reason).


Some employers may try and justify changes by arguing that they are needed due to harmonisation and therefore rely on an ETO reason. However, Government guidance and case law has restricted the application of harmonisation as a genuine reason to amend one’s terms of employment. Harmonisation will only be a valid reason if there is a change in the workforce and this must involve change in the numbers, or possibly functions, of the employees. In practice, relatively few contractual changes would involve such a change in the workforce so harmonisation is unlikely to be used as a justifiable reason.


If the changes are part of a wider reorganisation which has nothing to do with the transfer, then they may be effective. The longer the gap between the TUPE transfer and any reorganisation, the greater the chance that the causal connection will be broken. However, there is no specific period after which it is safe to say that the connection with the TUPE transfer has been broken, as the test is whether the change is connected to the transfer. The mere passing of time does not of itself break the connection.


It is for the employer to prove that a proposed change is permissible under TUPE and if there are concerns that the changes cannot be made, this can be challenged by raising a formal grievance first and then considering making a claim in an employment tribunal.


Thanks Ben - my understanding is that employees are allowed a 'reasonable' consultation period to discuss the transfer. Whilst there are no mandatory guidelines in place, can you let me know what you believe is a 'reasonable' consultation period for the transfer of 8 employees in this case? Whilst nothing official has been mentioned I've discreetly been informed that staff will be told this week, with the ambition to have the transfer completed by 1st July 2013. Surely 3 weeks isn't a reasonable period for consulation?

Ben Jones :

There is a legal obligation to inform and consult. There is no specified timing and it must be done "long enough before the relevant transfer to enable the employer of any affected employees to consult the appropriate representatives of any affected employees".


These periods can vary greatly and as long as the relevant information has been shared and the employees have been informed of the full details of the transfer then even a 3 week period may be deemed sufficient.


Ok - and final question.


....and here it is :-)


My feeling is that be transfering to the other company, the financial stability of the company I work for will be 'threatened' which ultimately could lead to redundancies in the future. In this respect can I decline the transfer and instead request redundancy (I have six months notice in my contract)?

Ben Jones :

Unfortunately not. If you refuse to transfer then you will simply be resigning and will not be entitled to redundancy. Only when the employer is actually experiencing a redundancty situation will you have the chance to be made redundant


Many thanks.

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