BIS has published a new guide on TUPE to replace the March 2007 guide. It reflects changes made to the nature of employee liability information outgoing agencies are obliged to provide to newly appointed agencies in the event of a TUPE transfer. Nicola Doran highlights these changes and the potential implications for the advertising sector.
Who: Department for Business Innovation & Skill
When: June 2009
Law stated as at: 27 July 2009
TUPE provides that, where there is a "relevant transfer" (either the sale of a business as a going concern, except for a share sale, or a "service provision change"), all employees engaged in the provision of services will transfer to any new service provider (i.e. a newly appointed agency) on the same terms and conditions of employment.
A "service provision change" applies where services out outsourced, insourced or assigned to a new service provider. Employees transfer under a service provision if they constitute an "organised grouping of employees…which has as its principal purpose the carrying out of the activities concerned on behalf of the client". This is particularly relevant to the advertising and marketing sector due to the tendency to have particular groups of employees working solely or predominantly for one client.
For more information on the effect of TUPE on business in the marketing and advertising sector, please see our previous article on this topic: http://www.marketinglaw.co.uk/articles/2008/9875.asp.
TUPE imposes a duty on an old service provider (the outgoing agency) to supply any new service provider (the newly appointed agency) with information about the transferring employees. This is known as employee liability information and includes information about disciplinary and grievance proceedings where the statutory dispute resolution procedures applied. However, 6 April 2009 saw the repeal of the much criticised statutory dispute resolution procedures, now replaced by the ACAS Code of Practice on Disciplinary and Grievance Procedures. Consequently, TUPE was amended on 6 April 2009 to require that the outgoing agency must instead provide information about disciplinary and grievance proceedings to which the ACAS Code applied.
Department for Business Innovation & Skill Guidance
The Department for Business Innovation & Skills ("BIS"), the new Government department created when what was previously known as the Department for Business, Enterprise and Regulatory Reform (BERR) merged with the Department for Innovation, Universities and Skills (DIUS) earlier this year, has published a new guide on TUPE to replace the previous March 2007 version. This new guide reflects the recent changes to the disciplinary and grievance employee liability information that must be provided. The BIS guidance (http://www.berr.gov.uk/files/file20761.pdf) summarises the main changes introduced under TUPE (in contrast to the 1981 regulations) and provides guidance in a useful Q & A format.
Why this matters:
It is important to understand whether this recent amendment to TUPE has significantly changed the scope of the information that an outgoing agency must supply. The BIS guidance does not focus on this issue in any detail.
It is possible that the new provisions under TUPE reduce the scope of the information to be provided by an outgoing agency to a newly appointed agency. This is on the basis that the ACAS Code and the statutory dispute resolution procedures do not cover the same types of proceedings. For example, the ACAS Code relates to misconduct and poor performance only, whereas the statutory dispute resolution procedure also covered capability. Therefore, would an outgoing agency now not be required to provide details of disciplinary proceedings taken on the grounds of an employee's capability due to sickness rather than poor performance?
In light of the uncertainty concerning the overlap between the old and new regimes, it would seem sensible for an incumbent service provider to specifically request information about disciplinary and grievance proceedings carried out in the two years before the transfer in circumstances where the statutory dispute resolution procedures and/or the ACAS Code applied.