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Ben Jones
Ben Jones, UK Lawyer
Category: Law
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Experience:  Qualified Solicitor
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We have a number of employees that are paid on a

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We have a number of employees that are paid on a case-by-case basis and have regularly received adequate payment. We have just lost a tender in which all of our staff were engaged. The full time and part time staff are all being offered redundancy under the TUPE re tendering regulation. The case-by-case staff are not being offered redundancy but are being offered jobs that clearly don't exist as a means to avoid the redundancy that is contained in their existing employment contracts. This seems to be unfair and discriminatory as we are being told that they do not have a right to redundancy. Theoretically, if my company were to be liquidated, I believe that they would receive redundancy payments from the DWP. Please advise as soon as possible as this has become a pressing matter.
Many thanksColin FarleyMany thanks

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

How long have they worked there for, what is the range of duration of employment?

Customer: replied 3 months ago.
7 years. They are employed but work from home preparing motor accident claim reports to insurers, according to their availability and volume of work provided.
Customer: replied 3 months ago.
Please continue online
Customer: replied 3 months ago.
I need to go home now and turn off my pc, so how do we conclude this conversation to my satisfaction?

The key with TUPE is whether they were assigned to the business which transferred? Were they just doing this on an ad hoc basis or covering work or just doing it in between other tasks they were given by you?

Customer: replied 3 months ago.
Their work was exclusive to the supplier with whom we had the contract that we have lost

Thank you, ***** ***** - when you say they were on a case by case basis, they were definitely employees, not working as contractors or zero hours workers?

Customer: replied 3 months ago.
They are definitely employees and have proper employment contracts and are paid an agreed fee for each task they complete. This arose out of their preference to work from home, made possible by our Internet Based Claims Management Database

Thank you. If someone is transferred under TUPE and their contracted role ceases to exist, or the new employer does not need as many employees doing that particular role, they could be made redundant. Whether the employer can offer them anything else to do would depend on a couple of things – one is whether this was possible under their contract and two, whether what they have been offered is considered suitable alternative employment.

If there is a potential redundancy situation, the employer has a duty to make a reasonable search for suitable alternative employment (SAE). If such positions exist they must then be offered to those at risk of redundancy. The objective is to avoid having to make someone redundant and keep them in a job.

There are two possible outcomes of this:

· The employee accepts the offer – in this case their employment will continue in the new role and thee would be no redundancy

· The employee rejects the offer – if that happens and the employee expects to still be made redundant, whether they do depends on the suitability of the offer and the reasonableness of their rejection, which I will discuss below.

If the offer is considered suitable and the employee unreasonably rejects it, they will be deemed to have resigned and would not be made redundant or be entitled to a redundancy payment. If the offer is unsuitable and they reasonably reject it, they can still be made redundant and receive redundancy pay.

Reasonableness is based on the subjective reasons the employee has for rejecting it, such as personal circumstances, health, family commitments, etc. Suitability is based on both objective and subjective criteria, with the most common factors that make an offer unsuitable as follows:

· Job content/status – drop in status (even if pay remains unchanged), changes in duties, which do not match the employee’s skills

· Pay and other benefits – significant drop in earnings/benefits (e.g. basic pay, bonuses, overtime, commission, etc)

· Working hours – change in shift pattern, significant extension/reduction of working hours

· Location – new location making it unreasonable to travel to the new place of work

· Job prospects – going from permanent to temporary or fixed-term work

Where an offer of alternative employment has been made and its terms and conditions are different to the employee's current terms, they have the right to a 4-week trial period. This is an opportunity for both employer and employee to determine its suitability. If during the trial period they decide that the job is not suitable they should tell their employer straight away and terminate the trial period. Assuming the above criteria apply and the offer was not suitable and was reasonably rejected, they should still be made redundant from their original job and receive redundancy pay.

Please take a quick second to leave a positive rating for the service so far by selecting 3, 4 or 5 stars above. I can continue answering follow up questions and in particular can also discuss their rights if they wanted to challenge this further. There is no extra cost for this - leaving your rating now will not close the question and means we can still continue this discussion. Thank you

Ben Jones and other Law Specialists are ready to help you

Thank you. In the end, if these employees are denied redundancy and are left to do jobs which are unsuitable or against their contracts, they can consider raising it internally with the employer through a grievance, but if that does not work – they may have to resign and claim constructive dismissal in the employment tribunal.

Before a person can make a claim in the employment tribunal, they would be required to participate in mandatory early conciliation through the Advisory Conciliation and Arbitration Service (ACAS).

The purpose of this process is to allow ACAS to mediate between the claimant and respondent to agree on an out of court settlement in order to avoid the need for legal action in tribunal. The respondent does not have to engage in these discussions, or if they do and the talks are unsuccessful, the claimant will be issued with a certificate allowing them to make a claim.

However, if a settlement is reached, the claimant would agree not to proceed with the claim in return for the agreed financial settlement. Other terms can also be agreed as part of the settlement, such as an agreed reference.

To initiate the conciliation procedure ACAS can be contacted online by filling in the following form (https://ec.acas.org.uk/Submission/SingleClaimantPage), or by phone on 0300(###) ###-####

Customer: replied 3 months ago.
Thank you for your detailed response which is helpful. Unfortunately the problem is somewhat more complex in that the insurer client is our only client, so that all staff, including myself have been fully engaged in working for them. This client is one of the largest motor insurers in the UK and is still expanding with Welsh Government grants to employ more staff and seem to be determined to reduce their dependence on external contractors such as my company, particularly over the last two years where the level of instructions has halved to the extent that we were forced to introduce STW in June 2016 for all staff other than the case-by-case staff we have been discussing, who obviously experienced a reduction by more natural means. The client was fully aware both before and during the tender process that they were our only client and during the process gave regular hints of encouragement that we would be successful on the basis of our long standing relationship and the good quality of our work as evidenced by their regular audits. In fact they gave us false hope, which is another extension to this sorry tale. When told that we had lost the contract, I raised the TUPE issue, which to their credit was accepted and they approached the successful contractor who also accepted that TUPE applied. Unfortunately the client misled the other contractor as to the number of our staff that would be involved and the contractor subsequently received a nasty shock as to the financial liability and have openly admitted that they do not need any of our staff, including the case-by-case staff, but are attempting to minimise there liability, hence offering the 5 staff concerned, jobs that don't exist. We had earlier established with the client that any redundancy payment should be based on pre STW levels which was agreed by them and has been made known to the incoming contractor who do not seem to consider it to be their concern. We are waiting for their letters setting out the terms of redundancy which are due today or tomorrow with a deadline for the change over set for 1st May next week, which if my concerns are correct will give us all little time to dispute if the offer is based on reduced STW wages. If so, their logical reasoning maybe on the basis that the client in deliberately taking work back in house was 'in-sourcing' and that under TUPE regulations the client should be responsible for any shortfall in redundancy. I have informed the client of my concern in this respect and have asked them to intervene if this proves to be the case!
Customer: replied 3 months ago.
No one has yet received their letter today.

Thank you, ***** ***** if you have other specific queries in relation to this?

Customer: replied 3 months ago.
Once we have letters then the next question will be obvious Thanks

ok thanks

Customer: replied 3 months ago.
staff are now receiving their letters today and it is obvious that the redundancy offered is based on the last three months pay which as stated above was subject to STW. I now repeat the relevant section from my previous explanation which has now become the focus of our attention:
"We had earlier established with the client that any redundancy payment should be based on pre STW levels which was agreed by them and has been made known to the incoming contractor who do not seem to consider it to be their concern. We are waiting for their letters setting out the terms of redundancy which are due today or tomorrow with a deadline for the change over set for 1st May next week, which if my concerns are correct will give us all little time to dispute if the offer is based on reduced STW wages. If so, their logical reasoning maybe on the basis that the client in deliberately taking work back in house was 'in-sourcing' and that under TUPE regulations the client should be responsible for any shortfall in redundancy"
The obvious initial questions are as follows:
1. How should the redundancy offer be disputed or should it be rejected?
2. Should we ask them to provide a legal justification for the reduction?
3. Is the client liable for the difference on the basis of "in-sourcing"
Customer: replied 3 months ago.
Surely, the acid test, is what level of redundancy would our staff receive if this company were to go into liquidation as a result of the current position?

Was the STW a permanent change, even if subject to future reviews?

Customer: replied 3 months ago.
It was never intended to be permanent and the hours would have been returned to normal as soon as the volume of work increased as was intimated by our client throughout the period. I was also actively seeking additional clients.

Thank you. When an employee is made redundant their redundancy pay is calculated based on the terms and conditions they were employed under at the time of redundancy. For example, if someone has worked full time for many years in that employemnt, but had decided to go part time a few months before redundancy, they would only be entitled to rely on the part time pay when their redundancy is calculated. Their previous pay in the full time role will not be taken into account.

This case is somewhat similar, but the difference is that the STW was not intended to be permanent and as such should not be used in the calculation. To be honest it will all depend on what happened when the changes were made - if they were a permanent change, with a potential plan of reviewing them in the future, then they can be used. However, if they were always just a temporary change and w never made permanent, they should not be used.

Customer: replied 3 months ago.
Thank you for your explanation. I can confirm that the introduction of STW was a temporary response to the sudden reduction in work levels from our client who shortly afterwards announced that they were to undertake a review of what they required going forward which led to a long drawn out process involving a presentation followed by an invitation to tender under circumstances previously described. The outcome was to reduce their panel of suppliers from four to two on the basis that would not be enough work to distribute to more than two suppliers as they were clearly intending to complete more work in house. We were notified in November that we were unsuccessful and according to the tender time table the contract would terminate on 30 November 2017 but was then extended to 31 January 2018 and then extended again to 31 March. 2018. It was agreed that we would complete all the cases in progress beyond that date which is the process that we are now undertaking. The client agreed in late November that TUPE applied and that any redundancy should be based on pre STW pay so that we have proceeded on that basis. As previously stated, the redundancy has clearly been calculated by the incoming supplier on the January, February and March 2018 pay so how should staff react to the situation which comes into effect on this coming Tuesday 1st May with payment promised on 28 May 2018. I appreciate that the circumstances are unusual and given your explanation regarding the importance surrounding the intention behind the introduction of STW, and that the potential for legal debate exists which is why I have raised the question regarding the alternative application of TUPE with the client in-sourcing, about which you have yet to comment. I look forward to hearing from you. Many Thanks
Customer: replied 3 months ago.
I asked the incoming supplier for his justification in basing the redundancy on STW and the following is his response;Whilst I prefer to communicate with each employee on a one to one basis going forward, I am happy to provide you with the following high-level overview of our position related to redundancy calculations. The issue in questions is whether the reduction in the employees’ hours of work are short time working (STW) or whether they actually amount to a permanent change to their contracts. The description of STW in the employees’ contracts refers to any lay off being “temporary” which I don’t believe can reasonably be seen as an accurate description in this case, given that the reduced working hours have lasted for more than two years. Therefore we have taken in to account the average salary payments that were available for 2018 to base redundancy calculations

If this STW arrangement has been in place for over 2 years, then that will unfortunately complicate matters somewhat, especially If there was nothing agreed in writing to state that it was definitely a temporary measure and will be reviewed or changed soon enough. The employer has used the average of their last 12 weeks’ pay and often tribunals will do exactly that when they are faced with variable pay over a period of time. If the STW was only in place for a few months, then the argument that it was only temporary and that the full time pay should be used, would have been stronger. In the circumstances, however, I am not so confident a tribunal would agree the FT pay should be used, as the STW has been in place for quite some time. But these things will not be resolved unless a tribunal actually hears them, so if no resolution can be reached, you may still have to go there for resolution in the end

Customer: replied 3 months ago.
Given your latest response, it important to know if there is a TUPE case against the client for in-sourcing so that staff know all their options

If the client is in-sourcing, i.e. taking the service back in house, then there is indeed a potential for TUIPE to apply as in-sourcing is a type of service provision change covered by TUPE. In these circumstances they would be responsible for taking on the employees which were assigned to the service that is being in-sourced. However, it is not a matter of them paying a shortfall in redundancy which has not been paid due to the employees being on STW. Their duty is to take the employees on following the transfer and if they are not needed and are to be made redundant – for them to make them redundant and pay what they are due (considering my last response about STW hours potentially being correctly used as the basis of calculation).

Customer: replied 3 months ago.
But they created the need fo STW back in 2016 so wages prior to that should apply. I doubt that there has been a similar case to this since the TUPE amendment in 2014 and as such is one for a compromise solution

You are correct, often TUPE situations (and many other legal ones for that matter) do not always have a precedent to refer to. They can be quite fact-specific and in these circumstances, it would come down to a tribunal to make a decision which is fair. So unless you want to go that far and make a legal case out of it, the best way would be to try and reach a compromise between all parties - however that depends entirely on everyone involved in this, it is after all a compromise, no one can be forced to agree to anything

Customer: replied 3 months ago.
Thanks. Do the staff have and time limits imposed on them to accept or decline the offers made?

no, but they may not be kept open indefinitely by the company so it will depend on that too

Customer: replied 3 months ago.
They are transferring payments direct by BACS, so what is their position once the money is in their bank?

if they have accepted the offer and the money has been transferred then that is the end of it. I the money is being transferred before they have made a decision, if they reject the offer they should advise the employer straight away and make their intentions clear, as keeping it without doing anything about it can also amount to an implied acceptance

Customer: replied 3 months ago.
Thank you. This the basis response to my last email"Your assertion that STW was intended to be temporary is not in question however, the fact that it continued for approximately two years, and that there is no tangible new business opportunities on the horizon that would have returned everyone to full time working, in our measured view means that STW has become permanent"

thanks, ***** ***** discussed previously this i a potentially valid argument due to the amount of time it has been in place unchallenged and without variation

Customer: replied 3 months ago.
What do you mean by unchallenged. I certainly made a number of representations to our client and was given every reason to believe it was a short term problem and I was given reason to believe that we would retain the contract

As in a formal challenge, like grievances raised by the affected employees, officially stating to the employer they are working under protest and not accepting the changes any more. Asking questions about when it will change or how long it will last, will not in itself be seen as a formal challenge

Customer: replied 3 months ago.
I fail to see how an employee raising a grievance can effect the situation when the client, for its own 'selfish' reasons deliberately reduces the flow of work. As an employer we have enjoyed a warm and transparent relationship with our staff who fully understood the position and as such would not have dreamt of taking such a action in the full knowledge that my wife and I were bearing the financial brunt so as to minimise the degree of STW. If understand what I think you are saying, the system is fundamentally wrong. By way of example, a client could use this as an excuse to freeze out a supplier by insourcing to the final extent that there would be little or no redundancy to pay. Alternatively staff could force the employer into liquidation by demanding early redundancy which I am sure would be based on their original employment contract

Liquidation and a subsequent redundancy would not necessarily be calculated on the original contract. The same argument can still apply in that case as well. But the main issue is that there is nothing in black and white that says after X weeks/months, a rate of pay becomes contractually binding – each case is determined on its own facts