OTHER CHAPTERS
I. SETTING UP AN ORGANISATION
Ch.1: Trusts & unincorporated associations
Ch.2: Companies & other incorporated structures
Ch.3: Charitable status, charity law & regulation
Ch.4: The objects clause
Ch.5: The governing document
Ch.6: Setting up an organisation
Ch.7: Registering as a charity
Ch.8: The organisation's name
Ch.9: Branches, subsidiaries, partnerships & mergers
II. GOVERNANCE & MEMBERSHIP
Ch.10: Members of the organisation
Ch.11: Members of the governing body
Ch.12: Officers, committees & sub-committees
Ch.13: Duties & powers of the governing body
Ch.14: Restrictions on expenses, remuneration & benefits
III. RUNNING AN ORGANISATION
Ch.15: The registered office and other premises
Ch.16: Paperwork requirements
Ch.17: Meetings & decision making
Ch.18: Legal agreements
Ch.19: Organisational & personal liability
Ch.20: Insurance
Ch.21: Financial difficulties & winding up
IV. EMPLOYEES, WORKERS, VOLUNTEERS & OTHER STAFF
Ch.22: Employees and other workers
Ch.23: Rights, duties & the contract of employment
Ch.24: Model contract of employment
Ch.25: Equal opportunities in employment
Ch.27: Pay & pensions
Ch.28: Working time & leave
Ch.29: Disciplinary matters, grievances & whistleblowing
Ch.30: Termination of employment
Ch.31: Redundancy
Ch.32: Employer-employee relations
Ch.33: Employment claims & settlement
Ch.34: Self-employed workers & other contractors
Ch.35: Volunteers
V. SERVICES & ACTIVITIES
Ch.36: Health & safety
Ch.37: Equal opportunities in provision of goods & services
Ch.38: Confidentiality, privacy, data protection & freedom of information
Ch.39: Intellectual property
Ch.40: Publications & publicity
Ch.41: Campaigning & political activities
Ch.42: Public gatherings & entertainment
Ch.43: Food & drink
VI. FUNDING & FUNDRAISING
Ch.44: Funding & fundraising: General rules
Ch.45: Fundraising activities
Ch.46: Tax-effective giving
Ch.47: Trading companies
Ch.48: Contracts & service agreements
VII. FINANCE
Ch.49: Financial procedures & records
Ch.50: Annual accounts, reports & returns
Ch.51: Auditors
Ch.52: Corporation tax, income tax & capital gains tax
Ch.53: Value added tax
Ch.54: Investment & reserves
Ch.55: Borrowing
VIII. PROPERTY
Ch.56: Land ownership & tenure
Ch.57: Acquiring & disposing of property
Ch.58: Business leases
Ch.59: Property management & the environment
IX. BACKGROUND TO THE LAW
Ch.60: How the law works
Ch.61: Dispute resolution & litigation
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UPDATED INFORMATION FOR CHAPTER 26:
VOLUNTARY SECTOR LEGAL HANDBOOK
This page contains information that has appeared on Sandy Adirondack's legal update website for voluntary organisations at www.sandy-a.co.uk/legal.htm. For current updates, including potential changes that are in the pipeline, see the legal update website.
These websites for each chapter update
the 2nd edition of The Voluntary Sector Legal Handbook by Sandy Adirondack and James Sinclair Taylor (Directory of Social Change, 2001). The websites are not intended as a comprehensive update and should not be treated as such.
To order a copy of The Voluntary Sector Legal Handbook, print out the order form at www.sandy-a.co.uk/bookserv.htm or send an email order by clicking
. It costs £50 for voluntary organisations or £80 for others, plus 10% p&p. We expect the third edition to be published in 2007.
The information here covers the law applicable to England and Wales. It may not apply in Northern Ireland and/or Scotland. These news items are not a full or definitive statement of the law and are not intended as a substitute for professional legal advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be taken by the author.
Chapter 26
TAKING ON NEW EMPLOYEES
GUIDANCE ON ETHNIC MONITORING
Added 8/3/04. This information updates s.26.2.5 in The Voluntary Sector Legal Handbook 2nd edition.
The Office for National Statistics issued new guidelines in January 2004 for the collection and classification of information about ethnicity. The intention is to achieve comparability with census data and data from a variety of sources. The recommended form of words and categories are given for questions about ethnic group, national group and religion. The guidance is at www.statistics.gov.uk/about/ethnic_group_statistics/introduction.asp.
CHECKING RIGHT TO WORK IN THE UK
Updated 5/2/08. This information updates s.26.2.9 in The Voluntary Sector Legal Handbook 2nd edition.
From 29 February 2008, rules on people from outside the European Economic Area (EU + Iceland, Liechtenstein, Norway and Switzerland) working in the UK are significantly tightened.
Under the Immigration, Asylum and Nationality Act 2006, it is no longer enough for the employer simply to check and keep a copy of an employee's passport or other relevant documents at the beginning of employment. If a person who is hired on or after 29 February 2008 has limited leave to remain in the UK, the checks have to be repeated every 12 months. In addition employers have to take action if they become aware at any stage that a person is working illegally. An employer can be fined £10,000 for each person found to be working illegally, unless they can show that they saw and kept a copy of the relevant documentation. An employer who knowingly hires someone who is not entitled to work in the UK could be subject to an unlimited fine and prison sentence of up to two years.
Also under the new legislation the right to enter or remain in Britain will be based on a points system similar to Australia. The system will have five tiers: tier 1 for highly skilled individuals will be implemented in early 2008; tier 2 for skilled individuals with a job offer from an approved sponsor and tier 5 for youth mobility and temporary workers such as musicians, actors and sports people will come into effect in summer 2008; and tier 4 for students in early 2009. Tier 3 is a limited quota system for low-skilled workers to fill temporary shortages in specific industries. For employers who want to recruit under tier 2, the work permit system will be significantly changed and the employer will have to be licensed as a sponsor.
Information is available from the Border and Immigration Agency (formerly Immigration and Nationality Directorate) at www.bia.homeoffice.gov.uk and its employer's helpline on 0845 010 6677.
A website at www.employingmigrantworkers.org.uk takes employers step-by-step through the procedure for checking that job applicants are entitled to work in the UK, including explanations of acceptable documentation. Checks must be done before the person is employed, and to avoid allegations of racial discrimination should be carried out for all potential employees.
The Immigration, Asylum and Nationality Act 2006 is at www.opsi.gov.uk/acts/acts2006/20060013.htm.
WORKERS FROM BULGARIA AND ROMANIA
Updated 21/7/07. This information updates s.26.2.9 in The Voluntary Sector Legal Handbook 2nd edition.
Bulgaria and Romania joined the EU on 1 January 2007 but special rules apply to their nationals working in the UK and they are not subject to the worker registration scheme that applies to workers from countries which joined the EU in 2004. Employers who breach the rules can be fined up to £5,000 and a person who works unlawfully can be fined up to £1,000.
Workers from Bulgaria and Romania can work in the UK without additional documentation if they have completed on or after 31 December 2006 12 months continuous lawful employment in the UK; have leave to enter or remain in the UK with no restriction on employment; are married to a UK national or a person in the UK; or are family members of European Economic Area nationals who have the right to reside and work in the UK.
Workers under the highly skilled migrants programme can apply for a registration certificate to prove their status, as can students, who are entitled to work up to 20 hours per week.
Workers entering the UK under agricultural and food processing schemes, and workers on cultural exchanges such as au pairs, will receive an accession worker card. After 12 months continuous employment on one of these schemes the worker will be able to apply for a registration certificate and will be able to remain and work freely in the UK.
Self-employed workers must be registered with HM Revenue and Customs.
For details of the changes go to www.workingintheuk.gov.uk. A helpline for employers at 0845 010 6677 provides verification of Romanian and Bulgarian nationals' right to work in the UK.
INSTANT CHANGE IN HIGHLY SKILLED MIGRANT PROGRAMME
Added 3/12/06. This information updates s.26.2.9 in The Voluntary Sector Legal Handbook 2nd edition.
The government announced on 7 November 2006 that from 5 p.m. that day, the rules relating to the highly skilled migrant programme (HSMP) would be changed, and that consideration of applications and extensions would be suspended until 4 December. The number of HSMP points required for admission to the UK or extension of leave to remain has been increased, the criteria for points have changed, and proof of English language ability is now mandatory.
Employees approved under the HSMP scheme before 8 November may continue working until their leave expires. Those who want to continue working after their leave expires will need to meet the new HSMP criteria, or will need to qualify under another immigration programme such as ordinary work permits. If the employee continues working without having the right to do so they are in breach of their entry conditions, and the employer may be committing a criminal offence by continuing to employ the person.
Employers need to start now to assess an employee's likelihood of being able to continue working, and if necessary start a proper dismissal process. However, Personnel Today magazine warns (23 November 2006), "As immigration rules are subject to change at short notice, it is unwise to make a decision to dismiss on those rules until shortly before the existing HSMP approval expires."
For details of the changes go to www.workingintheuk.gov.uk and search for HSMP.
FOREIGN NATIONALS WORKING IN THE UK
Updated 11/7/04. This information updates s.26.2.9 in The Voluntary Sector Legal Handbook 2nd edition.
From 1 May 2004 new rules on preventing illegal working came into effect, amending s.8 of the Asylum and Immigration Act 1996. For employees who started work before 1 May 2004, employers had a statutory defence against prosecution for hiring an illegal worker if they saw an original of a specified document and kept a copy of it before the person started working. Under the new rules, which apply to employees who start work on or after 1 May 2004, there are two types of documents. If a document is on list 1 (the secure list) the employer only has to see and keep a copy of one document. If a document is on list 2, the employer has to see and keep copies of two of the documents.
List 1 includes a UK passport, a passport or other travel document showing the person has the right to remain and work in the UK, a passport or national identity card showing the person is a national of a European Economic Area country or Switzerland, or a resident permit issued by the UK to a national of an EEA country or Switzerland.
List 2 has two sets of combinations. One is based on an official document (P45, P60, national insurance card or letter from a government department) giving a permanent national insurance number, plus another document such as a UK birth certificate or naturalisation certificate or certain documents from the Home Office. The other combination is based on a work permit issued by Work Permits UK, plus a passport or Home Office letter showing the person can remain in the UK and take the employment in question.
For people who started work on or after 1 May 2004, a national insurance document on its own is no longer enough to provide the employer with a statutory defence if the person is subsequently found to be working illegally.
As with the previous rules, employers must avoid racial discrimination and must thus treat everyone equally. Documents cannot be requested only from people who are assumed not to be British.
There are proposals to increase the current £5,000 penalty for each person illegally employed.
From 1 May 2004 Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia have joined the EU and their nationals have the right to work in the UK. The employer has to carry out a check (as above) to show they are a national of the country. If they are from any of the countries other than Cyprus and Malta, the employer should advise them to register immediately with the Home Office's workers registration scheme. The employer must check within one month of the person starting work that he or she has registered with the scheme. A copy of the employee's registration certificate will be sent to the employer and should be kept. It is an offence for an employer not to comply with these rules.
The Home Office's guidance on employing foreign nationals--including nationals of the new EU member states--is at www.ind.homeoffice.gov.uk. A helpline is open from 5.45 a.m.-9 p.m. (8 a.m.-4 p.m. on weekends and bank holidays) on 0845-010 6677.
This information updates ss.26.2.9 and 35.5 in The Voluntary Sector Legal Handbook 2nd edition.
The Working in the UK website provides information for foreign nationals who want to work in the UK, and organisations who which want to employ them. (The website address is too long to include here, so click on the underlined link above.) For information specifically about volunteering, go to the website and search for volunteers.
FEE FOR WORK PERMITS
Added 25/3/03. This information updates s.26.2.9.1 in The Voluntary Sector Legal Handbook 2nd edition.
From 1 April 2003, organisations applying for a work permit for an employee from overseas must pay a fee of £95. Applications were previously free. Details are available on the Work Permits (UK) website at www.workpermits.gov.uk.
CHANGES TO WORKING HOLIDAYMAKER SCHEME
Added 30/8/03. This information updates s.26.2.9.3 in The Voluntary Sector Legal Handbook 2nd edition.
The working holidaymaker scheme allows Commonwealth citizens to work in the UK. From 25 August 2003 for new applicants, and from 20 June 2003 for working holidaymakers already in the UK:
- the upper age limit is raised from 27 to 30;
- the employment restrictions are removed, so there is no longer a limit of 25 hours per week;
- working holidaymakers who meet the necessary criteria will be able to apply for a work permit after they have been in the UK for 12 months.
CRIMINAL RECORD CHECKS
Updated 3/2/08. This information updates s.26.3.3 in The Voluntary Sector Legal Handbook 2nd edition.
For 2008/09 the fee for higher level (standard and enhanced) Criminal Records Bureau checks remains £31 for standard disclosures, £36 for enhanced, and £6 for POVAFirst. The fee is waived for checks on volunteers, defined in the Police Act 1997 (Criminal Records) Regulations 2002 as "a person engaged in an activity which involves spending time, unpaid (except for travel and other approved out-of-pocket expenses), doing something which aims to benefit some third party other than or in addition to a close relative".
A standard disclosure (also referred to as a criminal record certificate) lists convictions which are "spent" under the Rehabilitation of Offenders Act 1974, unspent convictions and cautions. Where the work regularly involves caring for, training, supervising or being in sole charge of young people under 18 or vulnerable adults an enhanced disclosure (called an enhanced criminal record certificate) is available, listing in addition police information such as suspicions that did not lead to a caution or conviction.
Higher level checks are available only in relation to professions or positions specified in various exception orders made under the Rehabilitation of Offenders Act 1974 — mostly positions involving access to children or vulnerable adults, work in health or education, and certain professions such as accountancy. The Police Act 1997 (Criminal Records)(Amendment) Regulations 2006 clarifies positions for which enhanced disclosures can be obtained. These regulations are at www.opsi.gov.uk/si/si2006/20060748.htm.
Application is made to the Criminal Records Bureau by the individual, and is countersigned by a named representative of a body registered with the CRB. The only bodies which can register are those which involve professions or positions for which higher level checks are available, or umbrella bodies. Umbrella bodies can carry out checks on behalf of other organisations, but only in relation to professions and positions for which higher level checks are available.
Registration costs £300, plus £5 for each additional countersignatory (person able to sign applications on behalf of the registered body). Organisations can register only if they carry out at least 100 applications per year, and when registered must comply with the CRB code of practice. To assist organisations which are not themselves registered, the CRB has a database of registered umbrella bodies, at www.crb.gov.uk/Default.aspx?page=349.
The CRB does not support portability, under which an organisation accepts a disclosure previously issued to an individual for a post in a different organisation. The CRB states that where a person changes jobs frequently, or needs a disclosure for two separate purposes at more or less the same time, an organisation may choose to use a previously issued disclosure — and it is free to do so — but the CRB does not support it.
Detailed information is available on the CRB website at www.crb.gov.uk.
The CRB has a webpage outlining how to obtain information from 22 foreign countries, at www.crb.gov.uk/Default.aspx?page=2243.
For posts where a standard or enhanced disclosure is not available, individuals will in due course be able to obtain a basic disclosure (also referred to as a criminal conviction certificate), covering only unspent convictions. Introduction of basic checks has been postponed, and in the meantime individuals can obtain an equivalent certificate from a police station, showing unspent convictions on the police national computer.
CRIMINAL RECORDS INFORMATION FROM ABROAD
Added 1/5/06; link updated 30/4/07. This information updates s.26.3.3 in The Voluntary Sector Legal Handbook 2nd edition.
The Criminal Records Bureau has access only to information held on the Police National Computer, so cannot provide information from foreign countries. Information about how to obtain information from abroad has previously been available only through a premium rate faxback line, but from 1 April 2006 the CRB has a webpage outlining how to obtain information from 21 countries. It is at www.crb.gov.uk/Default.aspx?page=2243.
VETTING AND BARRING SCHEME
Updated 3/2/08. This information updates s.26.3.3 in The Voluntary Sector Legal Handbook 2nd edition.
Police information, the POCA and PoVA lists from the Department of Health, a list from Department for Children, Schools and Families, people banned by the courts from working with children and vulnerable adults... with all these sources of information, there are inevitably overlaps and, more significantly, gaps. Under a new vetting and barring scheme, expected to start coming into force in autumn 2008:
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The Protection of Children Act (POCA) list and the Department for Children, Schools and Family list will be integrated into a single list of people barred from working with children, and there will be a separate but aligned list of people barred from working with vulnerable adults. These lists will be operated by a new Independent Safeguarding Authority.
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A barring decision will be able to be made on the basis of an individual's criminal history, as well as on the basis of referrals from employers and other bodies. Decisions about barring will be made by a new agency, the Independent Barring Board (IBB). The government will issue regulations setting out which offences should result in automatic barring from working with children and vulnerable people and how long adults and young people who are barred should have to wait before asking for the bar to be removed.
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Barring decisions will be updated as soon as any new information becomes available, and if possible employers will be notified if any employee [which in this context presumably also includes volunteer] is considered unsuitable.
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All employers, including domestic employers (of nannies, private tutors and teachers, care workers etc) will be able to make secure, instant online checks on an applicant's status.
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More people will be able to apply for vetting and barring disclosures than can currently apply for enhanced disclosures.
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It will be an offence, with a fine of up to £5,000, for an employer to employ someone to work with children or vulnerable adults who has not been through the new central vetting system, or to fail to check the system.
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The Home Office and Criminal Records Bureau will improve and standardise police record-keeping and information sharing.
For information about the proposed scheme go to www.everychildmatters.gov.uk/socialcare/safeguarding/.
The Safeguarding Vulnerable Groups Act 2006, setting out the legislative framework for the scheme, is at www.opsi.gov.uk/acts/acts2006/20060047.htm,
with explanatory notes at www.opsi.gov.uk/acts/en2006/2006en47.htm.
REGISTRATION OF CARE WORKERS
Updated 3/2/08. This information updates s.26.3.3 in The Voluntary Sector Legal Handbook 2nd edition.
The government announced in February 2006 that all care workers in England looking after vulnerable older people, adults and children — whether in residential, domiciliary or day care settings — will have to be registered, trained and vetted. Following consultation, it was announced on 15 February 2007 that the first group to be registered will be domiciliary care workers, but no date has yet been set. Information is available from the General Social Care Council at www.gscc.org.uk. Different provisions apply in Wales, Scotland and Northern Ireland.
CHECKS ON PEOPLE WORKING WITH CHILDREN AND
VULNERABLE ADULTS
Added 3/2/08. This information updates s.26.3.4 in The Voluntary Sector Legal Handbook 2nd edition.
Charles Russell Solicitors have on their website a very clear explanation of the checks that have to be carried out on governing body (management committee/board) members and staff in organisations working with children and vulnerable adults. As well as summarising the statutory requirements of the Rehabilitation of Offenders Act 1974, Protection of Children Act 1999, Care Standards Act 2000, Education Act 2002, and Charity Commission requirements, it also sets out good practice and some of the issues with CRB disclosures.
"Checks and balances: How can charities check out the credentials of new employees" is on the Charles Russell website via tinyurl.com/2eg4zl.
WORK WITH VULNERABLE ADULTS
Updated 3/2/08. This information updates s.26.3.4 in The Voluntary Sector Legal Handbook 2nd edition.
The Protection of Vulnerable Adults (PoVA) list is similar to the Protection of Children Act list (POCA), but applies to disqualification of people who have harmed a vulnerable adult or adults in their care or have placed them at risk of harm. It is unlawful to hire anyone who is on the PoVA list, and for anyone on the PoVA list to apply for work in care positions — including providing care in people's own homes. Checks on the PoVA list are carried out as part of CRB checks. Further information about PoVA is available from the Department of Health at www.dh.gov.uk (search for PoVA) and at www.crb.gov.uk.
There is a statutory obligation to obtain certain information about all staff, paid and unpaid, in care homes, children's homes, health care organisations, residential family centres, voluntary adoption agencies, domiciliary care agencies and nurse agency staff. This includes not only standard or enhanced criminal records checks (depending on the nature of the work), but also proof of identity, qualifications and previous employment, and being satisfied that the person is fit for the position they hold or are applying for. For new staff, checks must be carried out before the person starts work. In exceptional cases, where a care worker may be allowed to start work in a care home, for a domiciliary care agency, or as an adult placement carer before a CRB check has been issued, a POVAFirst check can be done by the CRB separately (fee £6) .
For some posts (but not all) the organisation must obtain a birth certificate and current passport (if any), and a full employment history, with satisfactory written explanations of any gaps and verification (so far as reasonably practicable) of why previous employment involving work with children or vulnerable adults ended. The organisations must carry out checks on lists of people considered unsuitable to work with children maintained by the Department of Health and Department for Children, Schools and Families. (This is included in CRB checks.)
Where a person is employed by someone else (for example an agency worker or secondee) the receiving organisation must be satisfied that the employing organisation has obtained all relevant information. Agencies have a statutory duty not only to carry out criminal record checks on temps who work with children and vulnerable adults, but also to obtain copies of relevant qualifications and two references, and take all reasonable steps to confirm that an individual is not unsuitable for the work. If the agency discovers any new adverse information they must withdraw the temporary worker or, if the worker has been supplied on a permanent basis, inform the employer.
Information is available from the Criminal Records Bureau, www.crb.gov.uk, the Commission for Social Care Inspection, www.csci.org.uk/professional, and the Healthcare Commission, www.healthcarecommission.org.uk.
CIPD (the Chartered Institute for Personnel and Development) has guidance on employing people with criminal records, and risk assessment in relation to employing people with criminal records. These are at www.cipd.co.uk/subjects/dvsequl/exoffenders/crimrec.htm and www.cipd.co.uk/subjects/dvsequl/exoffenders/crimrecra.htm.
TUPE CHANGES
Updated 21/7/07. This information updates s.26.4 in The Voluntary Sector Legal Handbook 2nd edition.
Changes to the TUPE regulations are in force for transfers on or after 6 April 2006.
Many of the changes reflect case law, but other changes include:
- Introduction of a new category of transfer called service provision change, covering outsourcing, contracting-out or contracting-back-in (insourcing) situations which were not already covered by TUPE. This makes it much more difficult to argue that TUPE does not apply when a service is retendered and a new provider takes it on. The new rules do not apply for a service which is one-off or short-term.
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Provision for the transferor (old employer) or transferee (new employer) and employee to agree changes in terms and conditions that are connected to the transfer, provided that the sole or main reason is an economic, technical or organisational (ETO) reason requiring a change in the number of employees or in the work done. Under previous regulations, only changes unrelated to the transfer were allowed (such as unexpected loss of a grant). This provision allows harmonisation of terms and conditions of employment between existing and transferred employees, but only if there is an ETO reason. A change for any other reason is void (invalid).
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The transferor must inform the transferee in writing, at least 14 days before completion of the transfer, of the age and identity of all employees who will transfer; their terms and conditions, including details of any collective agreements; details of any disciplinary action or grievances in the previous two years; and details of any legal action brought by employees in the previous two years or anticipated legal action. In most cases the transferee will be able to claim a minimum of £500 per employee from the transferor if this is not done.
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The transferee and transferor are jointly liable for failure to inform and consult affected employees.
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Where the transferor is insolvent, unpaid statutory redundancy pay, pay arrears, payment in lieu of notice, holiday pay, and basic award for unfair dismissal do not transfer to the transferee if they are covered under the National Insurance Fund scheme (under which the Redundancy Payments Office, part of the Department for Business, Enterprise and Regulatory Reform (formerly DTI), makes some payments to employees of insolvent employers). Any additional payments due to employees transfer to the transferee.
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The transferor and employee representatives—not individual employees—can agree changes in terms and conditions in some situations where the purpose is to safeguard the survival of the organisation.
The new regulations clarified some points, but TUPE remains complex. The implications of failing to understand and comply with TUPE regulations are VERY SERIOUS. Legal advice should always be sought before taking on any work that has previously been done by another employer.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 are at www.opsi.gov.uk/si/si2006/20060246.htm.
The Department for Business, Enterprise and Regulatory Reform (formerly DTI)'s guidance on the regulations is at www.berr.gov.uk/files/file20761.pdf. Part 3 of the guidance was revised in March 2007 to make clear that contractual changes that are entirely positive (to the employee) are not prevented by the Regulations.
The Workforce Hub issued on 3 November 2006 an extremely useful summary of issues for transfers of projects to or from voluntary and community organisations, mergers and other TUPE situations, including taking on employees with public sector contracts of employment. Transferring projects to and from your organisation: Fact sheet for voluntary and community organisations is at www.ukworkforcehub.org.uk/Downloadfile.asp?file=26_14200614110306_13.pdf.
CONTRACT CHANGES AFTER A TUPE TRANSFER
Added 21/7/07. This information updates s.26.4 in The Voluntary Sector Legal Handbook 2nd edition.
Under the TUPE 2006 regulations (see above) an employee's contract can be changed only in certain circumstances relating to the transfer, and changes for other reasons are void (invalid). However the employment appeal tribunal said in Power v Regent Security Services Ltd on 29 January 2007 that the European Acquired Rights Directive, which TUPE implements in the UK, is not intended to protect employers, and that there is nothing to stop an employee enforcing new contract terms that are beneficial to him or her. This could include a situation, for example, where an employer wants to increase an employee's salary, holiday entitlement or other benefits to bring them in line with other employees.
This case was decided under the TUPE 1981 regulations, before the 2006 regulations clearly stated that all contractual changes are void unless they are for an ETO reason. However the decision opens the possibility for an employee to claim that this provision does not comply with the Directive, and that he or she should be able to take advantage of any beneficial change after a TUPE transfer. Needless to say this is a complex area and legal advice must be taken.
The EAT decision said that where some contractual changes were beneficial to the employee and some were detrimental, the employee could choose to enforce only the beneficial ones but not the negative ones. It would be up to each employee to decide which contractual changes he or she considered beneficial and wanted to accept.
The decision is at www.bailii.org/uk/cases/UKEAT/2007/0499_06_2901.html.
A useful short summary is at www.pinsentmasons.com/media/627585452.pdf.
TUPE AND PENSION RIGHTS
Updated 24/10/05. This information updates s.26.4.1 in The Voluntary Sector Legal Handbook 2nd edition.
From 6 April 2005 the Pensions Act 2004 gives pension protection to employees who transfer from a private employer (i.e. not public sector) under TUPE--the Transfer of Undertakings (Protection of Employment) Regulations 1981. Separate legislation applies to transfers from public sector employers.
Where a transferring private employer provides a final salary scheme, the new employer must provide a final salary scheme complying with the statutory reference scheme test or providing benefits equal to the value of benefits under the old scheme, or a money purchase or stakeholder scheme to which the new employer matches employee contributions up to 6%. Where the transferring employer contributes to a money purchase or stakeholder scheme, the new employer must provide a final salary scheme satisfying the statutory reference scheme test, or a money purchase or stakeholder scheme to which the new employer matches employee contributions up to 6%.
If the transferring employer does not make pension contributions, there is no obligation for the new employer to do anything other than offer a non-contributory stakeholder pension (if the employer has five or more employees).
The Transfer of Employment (Pension Protection) Regulations 2005 are at www.opsi.gov.uk/si/si2005/20050649.htm.
TLT Solicitors have a very useful website summarising the Act at www.tltsolicitors.com/resources/P4876.asp.
CODE OF PRACTICE ON PUBLIC SECTOR TRANSFERS
Added 21/3/05. This information updates ss.26.4.2.3 and 48.3.6.1 in The Voluntary Sector Legal Handbook 2nd edition.
The government's code of practice on the transfer of services from local authorities to private and voluntary sector contractors, issued in February 2003, has been extended from 18 March 2005 to the wider public sector. This will include transfers from the civil service, NHS and maintained schools. The code states that employees who join the new contractor after the transfer must be offered terms and conditions which are, overall, no less favourable than those of employees who have transferred from the public sector body. The public sector body must monitor compliance through its best value reviews.
For the Code of Practice on Workplace Matters click here (the website address is too long to include).
CONSULTATION ON TUPE TRANSFERS
Added 1/2/05; links updated 22/12/05. This information updates s.26.4.7 in The Voluntary Sector Legal Handbook 2nd edition.
Under the Transfer of Undertakings (Protection of Employment) Regulations 1981 both the transferor and transferee employers must consult the recognised trade union(s) or elected employees' representatives before effecting the transfer. A case in the Employment Appeals Tribunal in November 2004 has made clear that if there is no recognised union or employee representatives, the employer must invite employees to elect a representative or representatives for the purpose of conducting the TUPE information and consultation process. If the employees then fail to do so within a reasonable time, the employer must consult all the employees potentially affected by the transfer on an individual basis. Failure to consult the union or elected representatives, or to invite employees to elect representatives, or (if there are no representatives) to consult employees individually gives employees the right to claim a protective award. This is up to 13 weeks' pay per employee.
If a transferor employer (the one transferring the employees) fails to consult, the transferee (receiving) organisation can be held liable. So transferee organisations should ensure the transferor has met its obligations.
The case is Howard v Millrise Limited, trading as Colourflow (in liquidation) at www.bailii.org/uk/cases/UKEAT/2004/0658_04_0911.html.
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