My son is an independent cleaning contractor and has just successfully tendered for a local Cleaning contract, which is due to commence on 1st August. Yesterday, he received a letter from the Company that previously had the contract, advising him that their cleaning staff currently employed on the site will transfer to him. Is this correct, as we were unaware of such a law?Your advice would be greatly appreciated.Many thanks and best regards,XXXXX XXXXX
Province/Country relating to question: UK
This is the first enquiry
Hello and thank you for your question, which I will be happy to assist you with. Please let me know whether they mention TUPE?
Yes they do
Quote - 'Under the terms of the Transfer of undertakings (protection of Employment) Regulations 2006, known as the TUPE Regulations, the employment of the cleaners currently employed by XYZ Facilities Management at ABC Company, will automatically transfer to the new cleaning contractor under the same terms and conditions'
I am afraid that this is indeed the case and he is very likely to be affected by The Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE"). These apply when a business, or part of one, is transferred to a new employer or if there is a service provision change, such as a new service provider taking over an existing contract or an employer bringing the service back in-house. Simply put, if the 'activities' in question cease to be carried out by one employer and are carried out in future by another, TUPE would likely apply.
If TUPE applies to a transfer, then the affected employees will transfer to the new employer, preserving their continuity of service and their existing contractual terms and conditions (excluding pension rights), irrespective of whether these terms are written or implied. In addition, it is automatically unfair to dismiss a transferred employee if the sole (or principle) reason for the dismissal is the TUPE transfer.
So he would effectively step into the shoes of their old employer and will have a legal obligation to take these employees on, together with all liabilities that come with them. If he does not need these employees as part of his business he will have to consider making them redundant, however as he takes on all liabilities he would be responsible for any redundancy payments.
The previous Cleaning Company appears not to have had a formal Contract with the Client Company. would this affect my son's position?
No, a contract would have been implied in any event. A written or formal contract is not necessary as long as it can be shown that they had provided the services and a contract was implied in the circumstances, which is highly likely
Ok understood. Thank you Ben.
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So it seems if my Son wants to start a new Contract and he is legally obliged to take on the staff, then he needs to find a way to terminate their employment because it would not be commercially viable for him to retain their services. Their current Terms and Conditions of employment state that they are employed at the Company's address or any other address within a 10 mile radius that is required. They are not therefore employed to work exclusively for the Firm my son will be contracting with. Would this make a difference? Also my son would have to give them 2 weeks notice to vary their hours of employment. Presumably he could reduce the hours to make the job unappealing to them.
If he did have to make them redundant, is their a standard redundancy rate? And would they have needed to be employed for a minimum period beforehand?
is there a standard redundancy rate (correcting the spelling)
he can't simply reduce their hours to force them out. Any changes that are introduced purely because of the transfer are automatically void. Also if it is obvious the reasons behind the changes are these then they could simply resign and claim constructive dismissal and he would then be sued in the employment tribunal. If he wants to make them redundant then he needs to consider discussing this with the current employer and trying to come to an agreement to share the liability, otherwise he would have to make it clear he can't take on the contract.If he was to make them redundant then assuming their contracts do not allow them to get any enhanced redundancy pay, they would be entitled to their contractual notice period and the statutory redundancy payout, which can be calculated here:www.direct.gov.uk/redundancy.dsb
Thank you Ben. I much appreciate your input.
It seems the law has become absurd. Maybe Lord Denning had it right all those years ago when he said 'The Law's an ass'.
I agree to an extent. But then the lawmakers have a difficult task to ensure everyone has rights and they believed employees were unfairly prejudiced by constant changes of employers and this is why TUPE was introduced
Ok I accept that history caused this. From my son's point of view, he just wants to do a cleaning job on his own and in this case, is unable to.
Thank you again.
Signing off now. Good night.
Thanks good nithgt
Expert in UK Employment Law
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