Mergers and TUPE - frequently asked questions
1. Rewriting staff contracts after a merger
Q. Another Practice joined us recently and we took on all the staff. We have to set up contracts with all the employees. What date should I put on their contracts? What happens to their previous experience?
A. If the Practices "merged" or came together in a similar way, staff terms and conditions are protected by what are called the TUPE regulations. This means that staff terms and conditions cannot be less beneficial than they were before the merger and any "previous experience" will count. In your case it would mean that the date that would appear on the contracts would be the date they first started their employment with the former Practice - in effect the only contract change for staff may be in the name of the employer.
2. Contracting out cleaning services
Q. We're thinking about switching from an employed cleaner to a contract company, due to difficulties in arranging cover for holidays and sickness. Can we offer her redundancy, or does the fact that a cleaning job will still remain preclude us?
A. The new TUPE regulations, which came into effect in April 2006, include situations where a service is contracted out. Where an employee or group of employees were engaged on that work, their employment automatically transfers to the incoming contractor, who is obliged to take them on at terms which are no less favourable. If you dismiss someone because of a TUPE transfer, that dismissal is automatically unfair.
3. Closure of a single-handed GP Practice
Q. Our GP is retiring shortly, and our Practice will be taken over by a neighbouring Practice - what will happen to the staff?
A. TUPE applies in such situations and consequently employees of your Practice will transfer to the other Practice at terms no less favourable (i.e. pay rates, holiday, sick pay etc. must all be as good or better than they are currently).
4. Employee objects to the transfer
Q. One employee says he doesn't want to work for the Practice we are merging with. What are his rights?
A. Under TUPE, contracts of employment transfer automatically to the new employer unless the employee objects to the transfer. The legislation states that the employee must tell the current employer or the potential employer of the objection before the transfer takes place, in which case the law regards the employee's contract as being terminated on the date of the transfer. This termination is treated as a resignation and not as a dismissal, which means that the employee is not entitled to claim redundancy pay, nor make any claim of unfair dismissal.