Paul Housego – “Some more good news on TUPE”

Winning a contract is good news – but often the downside is the terms enjoyed by the employees you inherit, writes employment lawyer Paul Housego of Beers LLP who specialise in employment law in the outsourced services sector. In a previous piece on, Good news about tupe for a change! I described how the Parkwood Leisure case changed the law for employees whose contractual terms were varied by national renegotiation. In short they come with a snapshot of those terms, but there are no further automatic variations.

Now we have Nationwide Building Society -v- Benn in the Employment Appeal Tribunal, reported this month. What is says is that it is possible to change terms and conditions of employment to conform with the existing terms of the employees you already have. If the new people resign and claim constructive dismissal, they have no claim, for although this is a tupe dismissal it is not automatically unfair for it is an “eto” reason entailing changes in the workforce. (Economic, technical or organisational).

More, if you dismiss people who you bring in through a tupe transfer as they don’t fit with your job titles/roles that can be fair too.

But in my view the most significant part of this decision is that it is only the people tupeing in that you have to look at in these circumstances. Before this case it was essential to look at all the employees, both new and existing, if looking at organisational changes.

The case itself was about building society managers from the Portman who tuped into Nationwide. They had a changed and less desirable job role, and a substantial drop in their actual or potential earnings. They resigned and claimed constructive dismissal, and lost.

Nationwide escaped losing a failure to inform and consult claim on a technicality, and the case is also a reminder of the need to take a lot of care to inform and consult people tupeing in to you.

As always, these briefing notes come with a health warning:- they are very simplified, and the circumstances of each case are different and the cases are always fact sensitive. If you think this relates to you, then it would be sensible to take advice from a solicitor experienced in employment law. The benefits of a reorganisation on a tupe transfer are great – but so is the risk of getting it wrong, and the cost of doing so may be high.

The law continually develops, and often this is in pendulum fashion. It is possible that the pendulum is swinging back towards giving employers greater ability to manage their businesses positively, rather than being hamstrung with employees historic rights. Building on these two cases, and with some care and finesse, it should be possible to harmonise terms of employees that tuped in a while back, without everyone getting the best terms of any employee.”

Any reader who would like a more lawyerly exposition than this can obtain it without charge by contacting me.