TUPE Advice to Schools moving to Academy Status

UNISON
TUPE Advice to Schools moving to Academy status (July 2010)
1. This advice has been drafted specifically for schools that are moving to academy status as a result of the new Academies Act (which is yet to become law, but is currently going through Parliament).  Where employees working for schools are transferred to academies, such a transfer will be governed by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006).  TUPE 2006 operates to preserve an employee’s statutory and contractual employment rights that the employee had before the transfer.

2. TUPE 2006 provides that any contract of employment of any person employed by the transferor, in this situation the school, shall be deemed to have been made between the person employed by the school and the transferee, in this situation the academy (TUPE 2006, Regulation 4(1)).  Accordingly, the academy will take over all of the school’s rights, powers, duties and liabilities under the employment contract so that after the transfer, any wrongful act committed by the school is deemed to have been done by the academy.  Similarly, any breach of duty by the employee before a transfer is deemed to be a breach of duty to the academy (TUPE 2006 Regulation 4(2)).  The purpose of TUPE 2006 therefore is to preserve an employee’s rights rather than to create new rights.

3. All aspects of an employee’s contract of employment and rights connected with that contract of employment are transferred except for any criminal liability (TUPE 2006, Regulation 4(6)); and any rights concerning occupational pension schemes (TUPE 2006, Regulation 10).  However, as Academies are scheduled bodies under Schedule 2 of the Local Government Pension Scheme (‘LGPS’) (Administration) Regulations 2008 staff employed in Academies can join the LGPS. This applies to transferred staff and new staff.

Rights for transferred employees under TUPE 2006

4. Regulation 4(1) and (2) have the following effect:

(a) If the school fails to pay the employee’s wages, the employee can sue the academy to recover the underpayment.

(b) If the school dismissed an employee before a transfer because of the transfer or for a reason connected with the transfer which is not an economic, technical or organisational reason requiring changes in the workplace, an employee can claim reinstatement or compensation for unfair dismissal and any other outstanding liabilities from the academy (TUPE 2006, Regulation 4(3) and 7(1)).

(c) If the school has discriminated against an employee prior to the transfer even where the discrimination took place when he was employed under a previous contract of employment, liability for that discrimination will transfer to the academy.

(d) An employee is deemed to have continuous employment as far as his statutory and contractual employment rights are concerned.  These will include the right not to be unfairly dismissed, the right to redundancy or Statutory Maternity Payments and maternity rights.  This also applies to collective agreements (TUPE 2006, Regulation 5).

5. Automatic unfair dismissal under TUPE 2006, Regulation 7(1) (5) occurs when an employee who has worked for one year for either the school or academy is dismissed; and the sole or principle reason for the dismissal is the transfer itself or for a reason connected with the transfer which is not an economic, technical or organisational reason requiring changes in the workforce.  If, however, the dismissal is not for a reason connected with the transfer, but for a justifiable reason such as gross misconduct, it will not be automatically unfair.  A claim for a TUPE-related unfair dismissal must be brought within three months, less one day of the effective date of termination.

6. An employee can inform either the school or the academy prior to the transfer that s/he objects to the transfer. If so, the employee will not transfer.  Their employment will be deemed to terminate on the transfer of the undertaking, but that termination will not usually be regarded as a dismissal by the school (TUPE 2006, Regulation 4(7) and (8).  The exception to this is where the transfer would involve a substantial and detrimental change to the employee’s working conditions (TUPE 2006, Regulation 4(9)).  However such a dismissal will not necessarily be automatically unfair.  It will be for the employee to prove that it is and this is not always easy.  Furthermore, the employee will not be entitled to any damages from the employer for failure to pay the employee during the notice period (TUPE 2006, Regulation 4(1)).  This protection is in addition to the employee’s common-law right to claim constructive dismissal (TUPE 2006, Regulation 4(11)).

7. TUPE 2006 also protects employees where the school or academy varies the terms and conditions of employment of the employee.  Any variation of contract shall be void where the sole or principal reason is the transfer itself or a reason connected with the transfer that is not an economic, technical or organisation reason entailing changes in the workforce (TUPE 2006, Regulation 4(4)).  However, variations for an economic, technical or organisational reason entailing changes in the workforce or for a reason unconnected with the transfer will be valid (TUPE 2006, Regulation 4(5)).

Recognition Agreements with Trade Unions

8. TUPE 2006 transfers over any recognition agreement between the school and a recognised trade union (TUPE 2006, Regulation 6(1)).  

Duty to Inform and Consult

9. Both the school and academy must notify trade unions or employee representatives about certain information and if measures are to be taken which could affect the employees (TUPE 2006, Regulation 13).

10. Regulation 13 of TUPE 2006 sets out the obligations upon parties to a relevant transfer to inform and consult.  Regulation 13(2) places an obligation upon the school to inform the appropriate representatives of any affected employees of (amongst other things) the legal, economic and social implications of the transfer for any affected employees. This necessarily includes the question of the effect of the relevant transfer upon the contracts of employment of the affected employees and, in particular, whether the school considers that particular employees will or will not transfer.  That information must be provided long enough before a relevant transfer to enable the employer of any affected employees to consult with trade unions and the appropriate representatives of any affected employees.

11. Under TUPE 2006, Regulation 14(1), the school must inform trade unions of the following matters:

(a) The fact that the transfer is to take place;
(b) The approximate date of the proposed transfer;
(c) The reason for the proposed transfer;
(d) The legal, economic and social implications of the transfer for the affected employees; and
(e) Any measure which is envisaged the school or the academy will take as a result of the transfer, or if no such measures will be taken, this should be stated.  

12. “Measure” means an action which the school or academy intends to implement and it does not include a vague idea of future arrangements (TUPE 2006, Regulation 13(2)).  If measures are to be taken by either the school or the academy which may affect the employee, then the party which is to take those measures must consult with trade unions and consider the trade union’s view and seek their agreement before any final decision to implement those measures is reached (TUPE 2006, Regulation 13(6)).  This means that either the school or the academy must discuss these matters with the trade unions, This must be done with an open mind and the school or academy must make every effort to secure the trade union’s agreement as to what is being proposed and accommodate their objections.  The school or the academy must consider any representations, reply to them and if they are to be rejected, state the reasons for doing so.

13. If the school fails to inform the representatives of the material facts or if the representatives are not consulted about any measures which may be taken, then the trade union may bring a complaint in the Employment Tribunal, within three months, less one day of the transfer, for a declaration and compensation for a failure to consult.  The maximum award is 13 weeks’ pay for each of the affected employees.  An action can only be taken in the name of the trade union and the award is intended to be punitive, rather than compensatory.  An award for a failure to comply with the duties to inform and consult can be made against either the school or the academy.  Where an award is made against the school, if after being given notice the academy fails to provide information on time regarding any measures it proposed to take as a result of the transfer or fail to consult about such matters, the academy may also be liable (TUPE 2006, Regulations 15 and 16).  However, please note that there can be no obligation on the academy to consult after the transfer.  In any event, TUPE 2006 expressly provides that both the school and academy will be jointly liable for a failure to inform and consult (TUPE 2006, Regulation 15(7) (9)).  

Conclusion

14. Given the speed with which academy schools are to be implemented, and given the fact that schools are due to break up imminently for the summer recess, it is not conceivable that any meaningful consultation can take place between the coming into force of the Academies Act and any potential TUPE transfer.  Although TUPE 2006 does not prescribe the manner in which the information is to be provided and indeed does not provide any sort of timetable within which to comply, it is necessary for there to be meaningful consultation.

15. For further advice and assistance, members can refer to the Organising Guide to Transfers of Employment 2008 (17328) or contact UNISON for further advice.