Legal protection diluted for outsourced staff

Change in Tupe law means employers can offer new terms one year after move

February 6, 2014

Source: Alamy

Watered down? Concern over changes to legal protection for transferred staff

Outsourced university staff may face inroads on their pay and conditions after legal protections were watered down, unions have warned.

Until last month, employees transferred to a different employer were entitled to keep the same terms and conditions under legislation commonly known as Tupe (Transfer of Undertakings, Protection of Employment).

But changes that came into effect on 31 January mean new employers are now able to renegotiate conditions one year after the transfer of staff.

With many universities looking either to outsource cleaning, security and catering services  – and, in some cases, academic support staff, such as librarians or learning support assistants – or transfer them to “shared service” companies owned by universities, the updated Tupe rules could potentially affect thousands working in higher education.

Employers can impose new terms only if they are “no less favourable overall”, but that provision could still allow firms to lower wages by offering different benefits in return, said Shantha David, Unison’s legal officer.

“Comparing different employment packages is very contentious because you are comparing different things, such as pay, annual leave and sickness absence pay,” Ms David said.

“How would it work if someone on £10 an hour was told they would be offered £8 an hour, plus a free canteen – an employer could argue that [the] total package was just as generous, though it would cost them less to provide,” she added. With these types of issues now open to debate, staff may feel under pressure to accept worse terms and conditions, Ms David said. “It has created a lot of uncertainty as anyone who moves over to the private sector will be living in fear that their terms and conditions will be renegotiated,” she added.

Other changes to Tupe rules may also affect staff working in higher education, particularly those in “back office” roles which may be incorporated into shared service companies owned by universities.

Under old protections, any employee asked to move to a different place to work following a takeover could argue that this amounted to unfair dismissal. That protection has been removed.

“A university could easily say it was moving its IT services or payroll division to a shared service company,” said Ms David.

“You would then have to choose to move to another city or give up the job because the move is no longer a reason for unfair dismissal,” she said.

The Department for Business, Innovation and Skills, which consulted on changes prior to announcing the new rules in September, has said the “simpler, more flexible employment laws” are designed to “remove unfair legal risks from businesses…while protecting basic workers’ rights”.

However, Trades Union Congress general secretary Frances O’Grady said “watering down Tupe law means hundreds of thousands of vulnerable workers will lose out on vital protections at work”.

“Weakening guarantees on pay and conditions will encourage unscrupulous companies to compete for contracts based solely on low costs and not on the quality of service,” she added.

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