You’re a mid-sized retailer that has achieved growth both organically and through acquisition. Most of your total headcount are employees you’ve hired yourself while others you inherited through M&As. You’re about to begin implementing a new WFM solution across the company. That’s well and good, but it’s prudent to take a moment and reflect on a handful of key questions.
- How much contractual variation exists between your different groups of employees?
- How well have you documented the variety of employment terms that exist in your organization?
- Do you know how these variations will be modeled in your WFM system?
- Will any of the assumptions you make while configuring your WFM solution bring you out of compliance with TUPE?
Adding new employees to your organization can add levels of complexity to your labour planning processes, the configuration of your WFM solution, and of course, your policies. Without a regular review of your WFM configuration and labour strategy, you risk running afoul of key legislative requirements.
But hold on a second… what is TUPE? When businesses merge in the UK, employees aren’t left to wonder about what impact it will have on the terms of their employment. Transfer of Undertakings (Protection of Employment) Regulations (“TUPE”) is the legislation that protects an employee’s terms when all or part of the organization where they worked is transferred or sold to another. Prior to 2014, a change in workplace resulting from a TUPE transfer was considered an unacceptable and unfair change in employment terms. However, legislation passed in 2014 now means that a change of workplace resulting from ETOs (Economic, Technical or Organizational changes) is an acceptable reason for a change in employment terms.
What all this means is that after an acquisition or merger, Cindy from Company A should retain her terms (e.g., tenure, holiday entitlement, previous collective agreements) when she starts working for Company B. However, as Cindy’s new employer takes over her contract, they can change her employment terms and conditions if she agrees to work under the new terms. She can also object and appeal the proposal if the new terms aren’t favorable or resign on the transfer date.
In short, TUPE’d staff can’t be forced to take on new terms unless:
- The new terms are more favourable to the TUPE’d employees and are accepted by the incoming employees during a period of consultation.
- A year has passed following the transfer and the new terms are more favourable.
Based on these conditions alone, it’s clear why incoming terms and conditions for companies that have grown as the result of various acquisitions where such terms are sometimes unique to individual employees, can lead to a huge catalogue of disorganized and disconnected employee terms. With so many possible side effects of TUPE transfers, there are a few guidelines that Axsium recommends all employers in the UK adhere to.
- Inform employees who will be TUPE’d of their rights and your firm’s intention to adhere to the letter of the law. Being absorbed by a new parent company can be an extremely stressful and disorienting experience for a waged worker. Will they be laid off? Will they need to work longer hours? Put your new team members at ease and take a big step forward in engaging them by clearly communicating your firm’s intention to do right by its employees.
- Keep records of all employment contracts. While your business may have a well-maintained record of policies for all regular staff, and those documents might be updated periodically, it’s also wise to store the inherited contracts of any businesses you acquired, whether five, 10, or 15 years ago.
- Honor your agreements. It goes without saying, but failure to adhere to an employee’s terms and conditions can result in legal action and bad press.
- Most importantly, make sure you fully understand the terms of all employee contracts. Axsium recommends that you map out the finer details of each group of employee contracts and plot them into a matrix. On one axis, place the various groups of employee contracts — for example: 2018 Acquisitions, Pre-2015 Hires, and so on. On the other axis, place each area of their employment terms — things like days of PTO, bereavement, and sick-day policies. This matrix will become a powerful reference tool for all of your future contract and policy updates. Remember, a successful contract configuration in your WFM system will depend heavily on not only your accurate understanding of employment terms, but also on the quantity of different employment terms that must be modeled. It would not be uncommon to find that you have, for example, 16 different sets of employee terms, but only two variants of terms in an area such as holiday entitlement. Insights like this translate into a simpler configuration for your WFM software. A matrix like this can also help you uncover opportunities to bring TUPE’d employees in line with standard policy where terms are more favourable.
TUPE can be hard to navigate, but it is not unworkable. If you’re contemplating organizational changes that involve the transfer of employees within the EU or Britain, contact us to identify the risks and avoid the pitfalls of dealing with TUPE. And if you are in North America, consider approaching your labour terms with a similar level of care; employee-geared legislation is rapidly becoming more prevalent throughout much of the United States and will continue to do so in the years ahead.