(TUPE) - Toolkit for Managers - Lincolnshire County Council

Employment Manual
TRANSFER OF
UNDERTAKINGS
(TUPE)
TOOLKIT FOR
MANAGERS

TRANSFER OF UNDERTAKINGS (TUPE)
TOOLKIT FOR MANAGERS
CONTENTS TABLE
TRANSFER OF UNDERTAKINGS (TUPE) .....................................................2
TOOLKIT FOR MANAGERS ........................................................................2
INTRODUCTION..........................................................................................2
OVERVIEW..................................................................................................2
What is a relevant transfer of an undertaking? .........................................3
Business transfers ....................................................................................3
Service provision changes........................................................................3
In what situations does TUPE apply? .......................................................3
Impact of a breach of the TUPE regulations .............................................4
Information about employees transferring.................................................4
Consultation and notification.....................................................................5
Lincolnshire County Council as the transferor ..........................................5
Lincolnshire County Council as the receiving organisation.......................6
Preparation for Staff Transfer to LCC .......................................................6
Liability passing on to the incoming contractor .........................................7
Pensions...................................................................................................7
Are there any ‘defences’ to prevent the TUPE regulations applying? .......7
Role of People Services............................................................................8
FLOWCHART – TRANSFERS OUT ............................................................9
FLOWCHART – TRANSFERS IN ..............................................................10
FREQUENTLY ASKED QUESTIONS ........................................................11
DUE DILIGENCE QUESTIONNAIRE.........................................................20
INTRODUCTION
This Toolkit has been designed to help both operational managers and
members of the Human Resources team leading and advising on the Transfer
of Undertakings either into the County Council or out of the County Council.
Whilst the Toolkit has been designed to be as comprehensive as possible it is
important for any manager involved in leading on contract issues, which may
potentially involve the transfer of people from one employer to another, to
seek support and advice from their Human Resources team.
OVERVIEW
The Transfer of Undertakings (Protection of Employment) Regulations 2006 is
the main piece of legislation governing the transfer of an undertaking, or part
of one, to another. The regulations are designed to protect the rights of
employees in a transfer situation enabling them to enjoy the same terms and
conditions, with continuity of employment, as formerly. TUPE 2006 entirely
replaces the Transfer of Undertakings (Protection of Employment)
Regulations 1981 which have often been referred to as the TUPE regulations.

What is a relevant transfer of an undertaking?
TUPE will apply to what are known as ‘relevant transfers’ which may occur in
a wide range of situations. The two broad categories are business transfers
and service provisions changes. Some transfers will be both a business
transfer and a service provision change.
Business transfers
The question here is whether there is a transfer of an economic entity that
retains its identity. This can be broken into two parts:
Is there a stable economic entity that is capable of being transferred?
Will the economic entity retain its identity after the transfer in question?
To decide if there is a stable economic entity that is capable of being
transferred, the factors to consider include:
Is the type of business being conducted by the transferee (incoming
business) the same as the transferor’s (outgoing business)?
Has there been a transfer of tangible assets such as building and
moveable property (although this is not essential)?
What is the value of the intangible assets at the time of the transfer?
Have the majority of the employees been taken over by the new
employer?
Have the customers or service users been transferred?
What is the degree of similarity of the activities carried on before and
after?
If the answer to all (or in some cases several of) the above questions is ‘yes’,
it is safe to assume that there has been a transfer of a stable economic entity.
The absence of a profit-motive is not a determinative factor.
Service provision changes
A ‘service provision change’ occurs when a client who engages a contractor to
do work on its behalf is either:
reassigning such a contract (whether by contracting out, outsourcing or retendering),
or
bringing the work ‘in-house’ (where a contract ends with the service being
performed in-house by the client themselves)
It will not be a service provision change if:
the contract is wholly or mainly for the supply of goods for the client’s use,
or
the activities are carried out in connection with a single specific event or a
task of short-term duration.
In what situations does TUPE apply?
By way of broad guidance TUPE has been found to apply to:
Mergers
Sales of businesses by sale of assets
A change of licensee or franchisee
The gift of a business through the execution of a will contracting out of
services
Changing contractors

Where all or part of a sole trader’s business or partnership is sold or
otherwise transferred.
However, TUPE does not apply to:
Transfers by share take-over
Transfers of assets only (for example, the sale of equipment alone would
not be covered), but the sale of a going concern including equipment
would be covered
Transfers of a contract to provide goods or services where this does not
involve the transfer of a business or part of a business.
The supply of goods for the client’s use, for example, supplying food to a
client to sell in its staff canteen, rather than a situation where the
contractor runs the canteen for the client.
Impact of a breach of the TUPE regulations
If a TUPE transfer applies, all terms and conditions of work and continuity of
employment should be preserved. This principle applies to all employees who
were employed in the entity transferred immediately before the transfer; and
those who would have been so employed if they had not been unfairly
dismissed for a reason connected with the transfer.
Subject to a one year qualifying period, for an Unfair Dismissal claim, such a
dismissal will be automatically unfair for a reason connected with the transfer
unless it is an ‘economic, technical or organisational’ (ETO) reason.
The table below sets out three different categories and whether they are fair
or unfair.
Type of Dismissal Fair or Unfair
Dismissals for which sole reason is
the transfer itself, or a reason
connected with the transfer that is not
an ETO reason.
Dismissals for which the sole or
principal reason is not the transfer
itself, but is a reason connected with
the transfer that is for an ETO reason.
Dismissals for which the sole or
principal reason is entirely
unconnected with the transfer.
Automatically unfair under the unfair
dismissal legislation.
Potentially fair subject to the normal
test of reasonableness under the
unfair dismissal legislation.
These will fall outside TUPE as they
are unrelated to a relevant transfer
and the usual unfair dismissal
principles will apply. This is the case
even though the dismissals may be
made around the time of such a
transfer.
Information about employees transferring
From 6 April 2006, transferors became obliged to give the transferee written
information about the employees who are to transfer and all the associated
rights and obligations towards them. This information includes, for example,
the identity and age of the employees who will transfer, information contained
in the employees’ written particulars of employment under section 1 of the

Employment Rights Act 1996 and details of any claims that the transferor
reasonably believes might be brought.
The information should be provided at least 14 days prior to the transfer and
ideally earlier than that for practical reasons.
If the transferor does not provide this information, the transferee may apply to
an employment tribunal for such amount as it considers just and equitable.
Compensation starts at a minimum of £500 for each employee in respect of
whom the information was not provided or was defective.
Consultation and notification
The transferor has a responsibility to conduct a full and meaningful
consultation with employees and recognised Trade unions at the earliest
practicable time. Failure to conduct consultation, with both affected
employees and recognised Trade Unions, results in liability for the payment of
compensation which may be up to 13 weeks’ pay. The transferor and the
transferee are both liable for any award of compensation made by an
employment tribunal for failure to inform and consult.
A reasonable period of consultation should be given to employees concerned
and should be in line with the terms of statutory redundancy consultation i.e.
at least 30 days. If the transfer would affect 100 or more employees, the
consultation should be at least 90 days.
Lincolnshire County Council as the transferor
All staff and their recognised trade union representatives should be informed
at the earliest opportunity if they may be subject to a transfer out of
Lincolnshire County Council.
A consultation document should be produced in liaison with the transferee
(receiving) organisation. The document should include:
1. The fact of the transfer.
2. When the transfer is to take place.
3. The reasons for the transfer.
4. The legal, economic and social implications of the transfer for the
‘affected’ employees; i.e. the effect on employment contracts, statutory
rights and collective agreements, any effect upon pay and other
benefits in the employment package.
5. The employee’s rights in a transfer situation.
6. The proposed timetable for meetings, decisions and transfer.
7. Processes for communication and raising concerns.
Following the consultation period affected employees and trade union
representatives should be informed of the following:
1. The outcome of the consultation process.
2. When the transfer will take place.
3. Reassurance of future terms and conditions.
4. Further details of the new employer.
5. Details of pension arrangements.

It is important at this point to ensure that any employees that do not wish to
transfer have clarified their reasons and will in effect terminate their contract
by operation of law. Their reasons should not be because of a substantial and
detrimental change to working conditions as a result of the transfer. If an
employee believes that this is the case, they may claim that they have been
unfairly dismissed.
At least one month before the transfer the manager should inform People
Services of the staff members that are transferring to the new employer
through SAP Leaver form. This process could also be completed using a
table or spreadsheet if there is a large number of staff.
Lincolnshire County Council as the receiving organisation
With assistance from Human Resources, a manager will need to liaise with
the transferring organisation. They will need to ensure that appropriate
information is provided to LCC and will attend any consultation meetings as
agreed by the transferor. It is also important for information to be gathered
from the transferring organisation before the consultation begins. This will
ensure that the current terms and conditions of the staff can be continued post
transfer.
Information checklist to include:
Payment method / pay day
Payscales / increments
Hours of work, any flexi scheme
Annual Leave entitlements
Changes to place of work / travel requirements
Whether pre-employment/CRB checks/Entitlement to work in the UK have
been undertaken/completed. This should not stop an employee
transferring but will provide essential safeguarding information.
Whether there are any liabilities to transfer for example personal injury
claims or claims for discrimination.
Any outstanding ER issues e.g. discipline, grievance, capability, Ill-Health
etc.
If any changes to the above points are necessary, the appropriate information
should be included in the consultation documents distributed by the
transferring organisation. These changes should also be justifiable for either
an economic, technical or organisational reason.
Preparation for Staff Transfer to LCC
Once the consultation period has ended it is necessary for the appropriate
manager to ensure that the following staffing information is received at least 1
month before the transfer.
They should liaise with People Services on the necessary timescale.
Organisational structure information
Terms and conditions information (to ensure that their pay can be actioned
within current SAP configuration)

Personal Files
Appointment forms completed or a multiple record sheet where a large
number of staff are transferring
Pre-employment/CRB checks where considered necessary
The manager will also ensure that the appropriate welcome letter is produced
and distributed to the transferring staff.
Liability passing on to the incoming contractor
The transferee takes over the liability for all statutory rights, claims and
liabilities arising from the contract of employment, for example, liabilities in
tort, unfair dismissal and discrimination claims. The exception to this rule
applies to criminal liabilities.
It is therefore extremely important for the County Council in cases where it is
the transferee to liaise with the transferor and undertake appropriate “due
diligence” in relation to the employees transferring. This would include
discussion regarding issues such as: disciplinaries, capability cases, longterm
sickness absence cases, any claims or potential claims which could
progress through an Employment Tribunal process or civil court.
It is possible to create specific warranties that arise out of due diligence and/or
disclosure of information provided by the transferor to the transferee. These
will help to protect the transferee in cases where appropriate information was
not disclosed to the transferee and subsequent legal action is taken by a
transferring employee against the transferee for failings by the transferor.
However before any legal agreements between both parties are considered it
is important that appropriate legal advice should be taken.
Pensions
In essence, if the previous employer provided a pension scheme then the new
employer has to provide some form of pension arrangement for employees
who are eligible for, or members of the old employer’s scheme. It will not
have to be the same as the arrangement provided by the previous employer
but will have to be a certain minimum standard specified under the Pension
Act.
All employees transferring into the County Council will become a member of
the County’s Local Government Pension Scheme unless they actively decide
to opt-out of the scheme.
Are there any ‘defences’ to prevent the TUPE regulations applying?
Please refer to Question 2 in the ‘Frequently Asked Questions’ section where
this is explained in more detail.

Role of People Services
This is an important part of the transfer so it is necessary that People Services
are contacted at the earliest opportunity.
A People Services representative should be involved in the Information
collection to ensure that any SAP configurations changes are identified
and the workload demands can be measured.
Any changes to SAP configuration will be raised by the appropriate People
Services team leader following the ‘SAP change request’ procedure.
Any Organisational Structure information will be inputted by People
Services builders team before the transfer. This is necessary to ensure
that the records can be inputted before the first payroll run following the
transfer.
People Services will be required to assign the additional records to an
assistant who will input the payroll information.
Storage space will be identified for additional personal files.
It is not necessary for People Services to produce contracts unless in
exceptional circumstances.

FLOWCHART – TRANSFERS OUT
TRANSFER SITUATION IDENTIFIED
IMPLICATIONS CONSIDERED
LIAISON WITH THE RECEIVING ORGANISATION
CONSULTATION WITH STAFF/TRADE UNIONS
FINAL COMMUNICATION WITH STAFF/TRADE
UNIONS
COMPILIATION OF STAFFING INFORMATION –
PERSONAL FILES, SPREADSHEETS/REPORT OF
PAYROLL RECORDS
TRANSFER OF STAFFING INFORMATION TO
RECEIVING ORGANISATION
LEAVER INFORMATION PROCESSING

FLOWCHART – TRANSFERS IN
TRANSFER SITUATION IDENTIFIED
IMPLICATIONS CONSIDERED
CONSULTATION WITH STAFF/TRADE UNIONS
DATA COLLECTION AND LIAISON WITH
PEOPLE SERVICES
SAP CONFIGURATION
SAP INPUT
COMMUNICATION TO STAFF/TRADE UNIONS
STAFF TRANSFER
WELCOME AND INDUCTION

FREQUENTLY ASKED QUESTIONS
1 What is the effect of the TUPE Regulations?
The Transfer of Undertakings (Protection of Employment) Regulations 2006
provide that upon a relevant transfer of an undertaking or part of an
undertaking, the following legal consequences apply:
All employees who were employed in the undertaking before the transfer
automatically transfer from the old employer (the transferor) to the new
employer (the transferee). An employer cannot just pick and choose which
employees to take on.
The new employer takes over all rights and obligations arising from those
contracts of employment, except criminal liabilities. Any liabilities relating
to employees who were dismissed before the transfer (for a reason
connected with it) also transfer to the transferee.
Neither the new employer nor the previous one may fairly dismiss an
employee because of the transfer or a reason connected with it, unless the
reason for the dismissal is an economic, technical or organisational (ETO)
reason entailing changes in the workforce. If there is no such reason, the
dismissal will be unfair.
If there is an ETO reason, and it is the cause or main cause of the
dismissal, the dismissal will then be fair provided that the employer acted
reasonably in the circumstances in treating that reason as sufficient to
justify dismissal.
Other consequences include:
Any collective agreements made with recognised trade unions and any
recognition agreements where the business retains a distinct identity
following the transfer will also transfer.
The employees’ representatives have the right to certain information and
to consultation regarding the transfer.
Employees may object to the transfer or resign and claim unfair dismissal
(but not payment in lieu of notice) if the transfer involves a substantial
change in their working conditions to their material detriment. (Employees
can resign and claim constructive dismissal where there is a repudiatory
breach of their contract in the usual way). The new employer may not,
unless the contract of employment so provides, unilaterally worsen the
terms of conditions of employment of any transferred employee.
2 What is the ETO defence under TUPE?
A dismissal of an employee by either the transferor or transferee because of
the transfer will be automatically unfair unless there is an economic, technical
or organisational (ETO) reason entailing changes in the workforce.
Examples include:
Economic reasons - where the demand for output has fallen to such an
extent that profitability of the entity is unsustainable without dismissing staff.
Technical reasons - where the transferee wishes to use new technology and
the staff employed by the transferor in the entity do not have the requisite
skills.

Organisational reasons - where the transferee operates at a different
location and it is not practical to transfer staff.
ETO reasons have an impact in two main areas: dismissal and variations to
terms and conditions.
Variations to terms and conditions for which the sole or principal reason is not
the transfer itself, but is for an ETO reason connected with the transfer may
be effective subject to being agreed between the parties (or their
representatives).
3 How can an employer avoid TUPE altogether, or at least minimise its
impact?
You can’t. The whole point of the Transfer of Undertakings (Protection of
Employment) Regulations 2006 is that they apply to protect the employees
regardless of whether the transferee wants the employees or not.
The issue of whether TUPE applies at all can be a complex one and those
involved in a transaction should take detailed HR/legal advice.
Two main ways the parties may address for the impact of TUPE are to:
(i) Ascertain whether there is an economic, technical or organisational
(ETO) reason for any proposed dismissals or variations to terms and
conditions. A dismissal of an employee by either the transferor or
transferee because of the transfer will be automatically unfair unless
there is an ETO reason entailing changes in the workforce. This will
not avoid the application of TUPE but may minimise its impact. ETO
reasons are explained in the question above on the ETO defence and
variations to terms and conditions.
(ii) Negotiate indemnities. A variety of indemnities may be negotiated in a
TUPE situation:
The transferee may seek to limit liability for actions of the transferor
which took place before the undertaking transferred, by requiring an
indemnity from the transferor prior to the transfer.
There may be mutual indemnities whereby the transferor provides an
indemnity with respect to claims from retained employees who allege
their contract has transferred to the transferee and the transferee
provides an indemnity with respect to claims from transferring
employees who allege their contract did not transfer from the
transferor.
Warranties and indemnities in the transfer agreement should cover the
obligation to inform and consult as TUPE 2006 introduced joint and several
liability for a failure to do this. The parties should either agree to do this
collaboratively or, if the transferor agrees to take responsibility for this,
appropriate warranties and indemnities should be included.

4 In a TUPE situation, what information should be given by the
transferor to the transferee concerning the transferor’s rights,
powers, duties and liabilities towards any employees who are to
transfer?
In practice, even before a legal requirement was imposed on the transferor to
pass any information to the transferee, information was made available
voluntarily in writing to the transferee in most cases. From 6 April 2006 this
practice was given legal force in that transferors became obliged to give the
transferee written information about the employees who are to transfer and all
the associated rights and obligations towards them. It is not possible to
contract out this obligation.
Information to be supplied
From April 2006 the transferor must provide the following information to the
transferee before the transfer, namely:
The identity and age of the employees who will transfer.
Information contained in the employees’ written particulars of employment
under section 1 of the Employment Rights Act 1996.
Information on any collective agreements affecting the employees that will
apply after the transfer.
Any disciplinary proceedings taken against the employees or grievances
brought by them in the last two years.
Any claims brought by the employees against the transferor in the last two
years.
Any claims that the transferor reasonably believes might be brought.
Relevant time limits
The information should be given at least 14 days before the transfer (in very
rare special circumstances a shorter period may be permissible). As a matter
of best practice, where reasonably possible, it is helpful for a transferor to try
and supply the information in advance of the 14 days to give the transferee
ample time to consider it.
Once the relevant information has been provided, the transferor must provide
written notification of any changes which occur between the time they have
first been notified to the transferee and the actual completion of the transfer.
Information must be no more than two weeks old.
Remedies
If the transferor does not provide this information then the transferee may
apply to an employment tribunal for:
Such amount as it considers just and equitable (having regard to the
transferee’s loss and any contractual terms between the transferee and
transferor), and compensation starting at a minimum of £500 for each
employee in respect of whom the information was not provided (or was
defective), or a lesser sum of the tribunal considers that it would be unjust or
inequitable to award this minimum payment.

The information may be notified indirectly through a third party. This latter
provision will allow the information to be passed between the contractors via
the client in a service provision change case involving the reassignment of the
contract, but will not require it.
5 In a TUPE situation, what information should be given by the
transferor and the transferee to the employees affected?
The employer of employees affected by the transfer (i.e. either the transferor
or the transferee) must inform the appropriate representatives of any affected
employees of the following:
The fact that there is a transfer happening.
Approximately when it is happening.
The reasons why it is happening.
The legal, social and economic implications for the affected employees.
The measures which the employer intends to take in relation to those
employees.
If no measures will be taken, the fact that there won’t be any such
measures.
If the employer is the transferor, the measures, which the transferee
envisages that they will take in relation to those employees who are to be
assigned to the transfer.
If the employer is the transferor and the transferee envisages no measures
will be taken then that fact.
Additional points to note:
Where an employer proposes to take any measures in relation to affected
employees, they must consult with the appropriate representatives in ‘good
time’ before the transfer.
The transferor and transferee are jointly and severally liable for any award
of compensation for failure to inform and consult made by an employment
tribunal for failure by the transferor to comply with these information and
consultation requirements. (If such a liability were to pass wholly to the
transferee, there would arguably be little or no incentive for the transferor
to comply with the relevant information and consultation requirements.)
If there is a claim against the transferor for failing to comply with its
obligations to inform and consult, the transferor may assert that the reason
that they did not comply was the transferee’s failure to provide information
on its proposed measures in time. If the transferor intends to argue this it
must tell the transferee and the transferee will then become a party to the
proceedings.
Employee representatives (or, in some cases, employees) seeking redress
for breach of the information and consultation provisions can choose
whether to take action against the transferor or the transferee or both. In
practice it is likely that the choice will be strongly influenced by the
consideration of which party is best able to pay.

6 When should consultation regarding a transfer of an undertaking
take place?
No specific time is specified for consultation to take place. Under Regulation
13 of the Transfer of Undertakings (Protection of Employment) Amendment
Regulations 2006 the only obligation to consult is where the transferor or
transferee envisages that they will take measures in relation to any of the
affected employees. They must then consult with the appropriate
representatives with a view to seeking their agreement to the measures to be
taken. The information referred to above should be supplied ‘long enough
before the transfer’ to enable consultations to take place with the appropriate
representative of the affected employees.
7 What happens if the employer fails to comply with their duty to
inform and consult employees affected by the transfer of an
undertaking?
A complaint may be brought by the following persons:
In the case of failure relating to consulting or informing representatives of a
trade union – by the trade union.
In any other case – by any of the affected employees.
8 Which employees do the TUPE regulations protect?
The Transfer of Undertakings (Protection of Employment) Regulations 2006
protects employees who are either:
Assigned to the undertaking or the part of the undertaking that is being
transferred, and who are employed immediately before the moment of
transfer, or who would have been employed at the moment of transfer but for
the fact that they were unfairly dismissed for a reason connected with the
transfer, and there was not an economic, technical or organisational (ETO)
reason for such a dismissal.
9 Which rights and liabilities transfer to the ‘new’ employer under
TUPE?
At present, all rights and liabilities transfer apart from criminal liability and
some pension rights. The pensions position is governed not by TUPE but by
the Pensions Act 2004.
The safeguards for employees are contained within the Transfer of
Undertakings (Protection of Employment) Regulations 2006. These
provisions apply to ensure that the employees are therefore protected by the
fact that their contracts are assigned to the transferee. The date of
commencement of employment for continuity of employment purposes will be
preserved from the date of commencement of employment with the transferor.
The transferee inherits all civil liabilities and obligations, including:
Liability for personal injury claims against the transferor.
Liability for sex, race, disability discrimination claims against the transferor.
Liabilities for any breach of contract e.g. arrears of commission payments
or salary.
All statutory rights and liabilities e.g. unfair dismissal claims.

10 Can the new owner of an undertaking change the terms and
conditions of employment of the employees who have transferred?
This is one of the areas that was significantly overhauled by the Transfer of
Undertakings (Protection of Employment) Regulations 2006. Under TUPE
2006 employers can only change employment terms where there is an ETO
reason. However, the employer must, at the same time, establish a change in
the workforce, normally a workforce reduction. If the employer wishes simply
to harmonise terms and conditions of employment then that will not be
sufficient to implement the changes. The issue of enforceability of beneficial
changes to terms and conditions where there is no ETO reason is dealt with in
the question below.
Under TUPE 1981 any variations to employees’ terms and conditions for a
reason connected to the transfer were void. However, TUPE 2006 confirms
that a change for a transfer-connected economic, technical or organisational
(ETO) reason can be validly made provided that the employees consent.
Under TUPE 2006 variations will only be void if the sole or principal reason is:
the transfer itself, or a reason connected with a transfer that is not an ETO
reason entailing changes in the numbers or functions of the workforce.
This means that employment terms may be changed before or after a transfer
where the sole or principal reason is either entirely unconnected with the
transfer, or connected with the transfer, but for an ETO reason.
If the reason for the change to the terms and conditions is the transfer, then
even if the employees agree to the change it will be void and unenforceable.
This difficulty often arises where the transferor wishes to dispose of an
unprofitable undertaking. The transferee will take it on but needs to
rationalise to make it profitable, perhaps harmonizing the terms and conditions
of employment. If the variation is due to the transfer and no other reason then
the changes will be invalid. If, however, there is an economic, technical or
organisational (ETO) reason for the changes the variations may not be solely
due to the transfer.
The guidance produced by the Department for Business, Enterprise and
Regulatory Reform (BERR) provides some indication of when the reason for a
change is transfer-connected and when it isn’t. The guidance states that
where an employer changes terms and conditions simply because of the
transfer and there are no extenuating circumstances linked to the reason for
that decision, then the change is by reason of the transfer itself.
Example of a reason unconnected with the transfer
The ‘new’ employer (the transferee) needs to re-qualify staff to use the
different machinery used by the transferee. Here the reason for the change is
prompted by the knock-on effect of the transfer and not solely the transfer
itself. The reason is not exclusively connected to the transfer and the change
is therefore permissible.

Example of a reason connected to the transfer
The ‘new’ employer (the transferee) wishes to make changes to harmonise
terms with those of the transferee’s existing workforce. These changes are by
reason of the transfer itself and are therefore void. (Such changes may not
fall within the definition of an ETO reason anyway.)
The employer and employee may therefore agree a variation of the contract if
the sole or principal reason for the variation is a reason connected with the
transfer that is an economic, technical or organisational (ETO) reason
entailing changes in the workforce.
11 Is it possible to dismiss employees following the transfer of an
undertaking if there is an ETO reason?
The essential point is that dismissals as a result of the transfer may be
automatically unfair. However, where there is an ETO reason the dismissals
may be fair.
The Transfer of Undertakings (Protection of Employment) Regulations 2006
set out three different categories of dismissal:
Dismissals for which the sole or principal reason is the transfer itself or a
reason connected with the transfer that is not an ETO reason – these
dismissals remain automatically unfair under the unfair dismissal
legislation.
Dismissals for which the sole or principal reason is unconnected with the
transfer – these dismissals fall outside TUPE as they are unrelated to a
relevant transfer and the usual unfair dismissal principles will apply. This is
the case even though the dismissals may be made around the time of
such a transfer.
Employees must still have one year’s service to bring a claim under TUPE
2006 unless they can argue unfair dismissal for asserting their statutory rights.
12 Can an ‘old’ employer dismiss employees in anticipation of a TUPE
transfer and rely on the ‘new’ employer’s ETO reasons?
No, an ‘old’ employer (the transferor) is exposed if they dismiss employees in
anticipation of a TUPE transfer and then seek to justify the dismissals by
relying on the ‘new’ (transferee) employer’s ETO reasons.
The ETO reason must therefore relate to the transferor’s future conduct of the
business.
Accordingly an ETO reason is only established where the employer dismisses
the employee for reasons relating to its own future conduct of the business,
entailing a change in its own workforce. There is a greater chance of
establishing an ETO where redundancies arising on a transfer are
implemented by the transferee rather than the transferor.
Practical points to note include:
Employees who were dismissed before a business transfer will normally
sue both the new owner of the business and the former employer.

Transferors should not make any pre-transfer dismissals in reliance on the
transferee’s post-transfer ETO reason unless the transferee agrees to
indemnify the transferor against any liability.
Transferees may make such dismissals post-transfer if a valid ETO reason
exists.
Transferees must however follow the statutory dismissal procedure in full
and a fair overall procedure which will often entail pooling the transferred
employees with their own existing workforce before selecting the
redundant employees.
13 Is it correct that occupational pensions do not transfer under
TUPE?
Technically, yes. In accordance with the Transfer of Undertakings 2006
contractual provisions relating to old age invalidity or death benefits in
connection with an occupational pension scheme do not transfer.
However, from 6 April 2005, pension liabilities effectively transferred under the
Pensions Act 2004, and the Transfer of Employment (Pension Protection)
Regulations 2005.
In summary, the effects of the Pensions Act 2004 are:
If the previous employer provided a pension scheme then the new
employer has to provide some form of pension arrangement for employees
who were members of (or eligible for membership of) the old employer’s
scheme.
The new pension scheme does not have to be the same as the
arrangement provided by the previous employer.
The new employer does not have to offer the same type of benefits but will
have a choice whether to provide:
a defined benefit (final salary) scheme which meets a particular
statutory minimum standard, or
a defined contribution (money purchase) scheme with a certain level of
employer contributions, or
a stakeholder pension scheme with a certain level of employer
contributions.
Transferees are required to continue or match any previous employer’s
obligation to make contributions to existing defined contribution and
stakeholder arrangements by matching the employee’s contributions up to a
maximum of 6%.
Importantly, the Pensions Act includes an opt-out provision. The employee
and the new owner are free to agree whatever pension terms (or none) they
want at any time after the time when the employee becomes employed by the
new owner.
14 What is the TUPE Code of Practice?
The Code of Practice ‘Workforce Matters in Local Authority Service Contracts’
only applies in the public sector. The Code requires that those employees
who join the organisation after a transfer has taken place should be offered

fair and reasonable terms and conditions of employment which are overall no
less favourable than those of the transferred employees.
These obligations also relate to contractors and subcontractors. The options
in respect of pension arrangements are:
membership of the local government pension scheme
membership of a good quality employer pension scheme which can be
final salary or defined contribution. The employer’s contribution should
match the employee’s up to 6%
a stakeholder scheme with matched contributions up to 6%.

DUE DILIGENCE QUESTIONNAIRE
EMPLOYEES
Please supply the following information related to affected employees:
1. Individual terms and conditions.
1.1 Copies of all current employment contracts, and all other terms and
conditions of employment.
1.2 A schedule comprising in respect of each employee, the following
particulars:
1.2.1 full name
1.2.2 post
1.2.3 whether the employment is full or part time
1.2.4 hours of work, including any contractual overtime
1.2.5 permanent/ temporary contract (with end dates)
1.2.6 CRB and List 99 checks
1.2.7 work permit details – evidence of Eligibility to Work in the UK
(if appropriate)
1.2.8 sex
1.2.9 date of birth
1.2.10 date of commencement of service
1.2.11 notice period
1.2.12 normal retirement age
1.2.13 Remuneration and allowances (inc. support
staff/TLRs/R&Rs/protection
1.2.14 pension
1.2.15 in respect of teachers:
(a) scale point or leadership group spine point
(b) assimilation point for the head teacher
(c) whether the employee is a post-threshold teacher

(d) teaching qualifications and whether the employee is a
good honours graduate
(e) management, recruitment, retention and/or any other
allowances payable
(f) any applicable assimilation safeguarding
and all other benefits whether contractual or otherwise.
1.3 Details of any recent changes of terms and conditions in relation to
any employee.
1.4 Support staff
1.4.1 how the term time calculations are made
1.4.2 who gets retainer pay
1.4.3 how retainer pay is calculated
1.5 Copies of any employee handbooks, rules and other policies,
procedures, arrangements or agreements in relation to:
1.5.1 redundancy procedures and payments
1.5.2 redeployment procedures
1.5.3 sickness absence and sick pay entitlements
1.5.4 equal opportunities
1.5.5 disciplinary matters
1.5.6 maternity, paternity and adoption rights
1.5.7 Holiday
1.5.8 private health cover, inc. PHI
1.5.9 pension arrangements
1.5.10 company car policies
1.5.11 mortgage subsidy policies
1.5.12 performance related pay
1.5.13 any individual contractual commitments e.g. variation of their
existing contractual arrangements or unwritten undertakings
by an employer to rely on certain contractual rights.

and details of whether or not each of the above are discretionary or
contractual.
1.6 Copies of any job descriptions,.or incorporated collective agreements:
for all levels of staff affected including the existence of any flexibility
clauses for hours of work, place or work and job duties, any other
related details held on the personal file. Copies of any job evaluation
scheme/appraisal schemes. Including all formal contracts, letters,
written statement of main terms and conditions of employment, works
rules, benefits manual.
1.7 Details of any practices or customs which although not written down
form part of employees' terms and conditions of employment.
1.8 Job offers: details of all offers made to prospective employees,
directors, consultants, independent contractors, apprentices and
trainees (whether outstanding or accepted but not yet joined).
1.9 Background checks: details of the background checks carried out in
relation to employees, directors, freelancers and independent
contractors prior to engagement.
2. Collective bargaining
2.1 Details of the names of all trade union and other employee
representatives, with the name of the trade union, the position held
and how long the position was held.
2.2 Details of any trade union recognised by the employer/ Council /
Governing Body, giving the date and details of the recognition
agreement (and a copy if available), with brief details of current and
historic labour relations and any pending negotiations.
2.3 Details of any other agreement, whether school, local or national, with
any trade union or other body of employee representatives (and
copies if available) including any informal recognition and procedure
arrangements and other arrangements honoured by "custom and
practice".
2.4 Details of which, if any, of the terms of any collective agreement form
part of individuals' terms and conditions of employment.
2.5 Collective Disputes: notification of any disputes in this workgroup
(school or LEA specific) in the last five years. Whether working days
lost or not, nature of the dispute(s) and action taken
3. Disputes
3.1 Details of any dispute with any employee whether brought under the
Council / Governing Body's disciplinary or grievance procedure or
otherwise and any matters which might give rise to such.

3.2 Details of any litigation threatened or pending against the organisation
/Council/ Governing Body, including any court, employment tribunal or
arbitration claims or any matters which might give rise to such
litigation, on the following types of claim:
▪ Employment Tribunal (eg unfair dismissal, redundancy pay, sex or
race discrimination, equal pay, or any other claims under
employment protection legislation
▪ County court or High Court litigation (eg for wrongful dismissal,
breach of contract, enforcing or resisting breach of restrictive
covenant, inducement to breach a contract)
▪ Claims against trade unions
▪ Claims or applications made by a trade union to the C.A.C.
▪ Litigation with existing and former employees over intellectual
property rights (eg patents, copyright, designs, etc.) including
applications to the Controller of Patents.
▪ All claims and applications relating to health and safety and
personal injury (and details of all incidents which could give rise to
such a claim).
▪ Details of all judgements in favour of an employee by any court or
tribunal or arbitrator in the last five years.
3.3 Details of any enquiry, correspondence or contact between the
Council / Governing Body and the Commission for Racial Equality, the
Equal Opportunities Commission, the Health and Safety Inspector and
the Inland Revenue concerning employees. Any formal investigations
carried out or threatened, and copies of any non-discrimination
notices. Details of Tribunal claims of discrimination in the last five
years (including equal pay), any copies of any Tribunal decisions.
Details of equal opportunity/diversity policies and any equal
opportunities monitoring or statistics about staff. Details of any
grievances involving discrimination, bullying or harassment in the last
5 years. Details of any job evaluation exercise. Details of any
adjustments made for any disabled employee under the Disability
Discrimination Act 1995.
3.4 Details of any court judgment or current employment tribunal award in
respect of any employee dispute.
3.5 Details, and, if available, copies, of any warnings given to employees
under the Council / Governing Body's disciplinary or capability
procedures.
4. Dismissals
4.1 Details of all dismissals/resignations within the last 12 months
including reasons for the dismissal/resignation.
4.2 Details of all employees recruited within the last 12 months.

5. Working Time Regulations 1998
5.1 Copies of any individual, collective and workforce agreements entered
into pursuant to the Working Time Regulations.
6. Health and Safety
6.1 Copy of Health and Safety Policy.
6.2 Details of any health and safety committees/representatives.
6.3 Details of any health and safety complaints or recommendations or
claims within the last 5 years.
6.4 Details of any prohibition or improvement notices or adverse visits by
the HSE.
7. Trainees/Consultants
7.1 Details of all individuals in the undertaking working on training, work
experience or similar schemes. Including NQT’s, UQTs, OTT, and
graduate teachers scheme.
7.2 Details of all consultancy agreements or self-employed personnel who
are or may actually be employees.
8. Absent employees
8.1 Details of all employees who have notified the Council / Governing
Body that they are pregnant or who are currently absent on maternity
leave.
8.2 Details of all employees on long term sick leave together with
confirmation of the nature of their illness and the duration and dates of
their absence(s) due to that condition.
9. Job Evaluation Scheme
9.1 A copy of any job evaluation scheme.
10. Contractor Employees
10.1 Details of any individuals employed by contractors working in the
school.
11. Pension
11.1 A list of all pension schemes (both occupational and personal)
applicable to the employees.
11.2 Details of any current or pending applications for early retirement.

12. Redundancy Arrangements
12.1 Including any redundancy agreements with recognised trade unions,
redundancy selection criteria, details of all redundancy programmes
over the last five years (classes of employees concerned, numbers of
employees concerned, timescale, level of severance pay), details of
any proposed redundancy plans.
12.2 Copies of all redundancy policies and redundancy pay terms
13. Tied Accommodation
13.1 Details of all persons entitled or required to occupy a flat and details
of any service occupancy agreements or other employees required to
/ permitted to remain living on company premises as a condition of
their employment.
14. Salary Reviews
14.1 Yearly review dates for each group of employees, current state of
negotiations, previous undertakings in earlier negotiations, and the
basis for salary reviews.
15. Lay off and guaranteed pay
15.1 Details of contractual rights and collective agreements,
15.2 Details of any previous lay-off or short-time working over the past five
years, e.g. types of employees involved, reason for lay-off etc.,
duration, levels of remuneration, etc).
16. Proposed Redundancies
16.1 Details of all staff to be made redundant before the transfer and
criteria for selection, payments to be made, and terms of any
compromise agreements.
17. Planned Early Retirements
17.1 Individual details of staff offered early retirement before the date of
transfer, to take effect up to and including 31 August 2008.
18. Restrictive Covenants
18.1 Who is covered by them, copies of covenants.
19. Disciplinary Rules and Procedure: copies
20. Grievance Procedure: copy
21. Retirement Policy and Procedure: copies
22. Trade union recognition and facilities agreements: copies

23. Disclosure of Information Policy: for both trade unions and
individual employees.
24. Disciplinary/Grievance proceedings taken against/by any
employee transferring: including any performance management
procedures and all live warnings on file at the date of transfer
25. Loaned/Seconded employees: from/to associated organisations,
including length and terms of loan/secondment
26. Transfer objectors: has anyone exercised their rights to refuse to
transfer under TUPE Reg. 4?
27. Any previous TUPE agreements and who they apply to.
Created September 2009