Rights at work

Wherever reference is made to the possibility of a case going to employment tribunal it is automatically qualified by the requirement for early conciliation.

The rights individuals have at work depend on:

• their employment status
• their statutory employment rights
• their contract with their employer

Employment status

Not all individuals are entitled to the same statutory rights.

Instead, their employment rights will depend on their employment status. In the UK there are three main types of employment status:

• employee
• worker
• self-employed

All employees are workers, but not all workers are employees. The self-employed are neither employees nor workers. They have hardly any work rights at all. Someone’s employment status determines their ability to access statutory rights at work, including basic rights like the right not to be unfairly dismissed, to be paid the national minimum wage, or to be free to organise with co-workers to be represented by a trade union. A growing number of employers, especially in the ‘gig economy’, use employment status laws to gain a commercial advantage over their competitors. By presenting their workforce as ‘self-employed’, they can avoid statutory work rights altogether. This is a key battleground for trade unions.

Confusingly, HMRC uses different employment status rules to decide on liability for tax and national insurance.

Factors that determine an individual’s employment status

Employment status is decided by employment tribunals on a case-by-case basis, looking at the different facts of each case. This is one of the main reasons why there is so much legal uncertainty. When deciding someone’s employment status, a tribunal will not take the written contract documents at face value. Instead, they must look at all the surrounding facts to discover the true situation, always keeping in mind the employer’s superior bargaining position and their power to dictate what goes into the documents on a take-it-or-leave-it basis. Tribunals often contrast the contract documents the employer requires its workers to sign, designed to present their workforce as self-employed, with their promotional material, designed to persuade customers that they have a fleet of workers ready to be called on at a moment’s notice to respond to customer demands.

When it comes to deciding access to employment rights, the law says that an employee is someone who is employed under a contract of employment (whether or not it is written down). A worker is anyone else who agrees to work personally for someone who is not their “client or customer” (in other words, anyone who is not genuinely self-employed). Employment tribunal judges look for three key factors:

• a contractual obligation to do some work in return for payment
• personal service (that is, a contractual obligation to do the work yourself and no right to send someone else to take your place)
• control (the extent to which someone else can dictate when, where and how you do your work).

If there is no contractual obligation to do work at all, then you cannot be an employee, worker or self-employed. This is why true volunteers have no statutory work rights.

If there is a contractual obligation to work but no obligation to do the work yourself (that is, genuine freedom to send someone else chosen by you to take your place), an employment  tribunal is likely to conclude that you are self-employed, especially if you have a lot of control over how and when you do your work.

If all three of the above factors are present, a tribunal will need to decide whether you are an employee or a worker. It does this by looking at all the surrounding facts, to decide whether the relationship looks like one of employment. In an employment relationship, an employer is likely to have the right to control your working hours and the timing of holidays, to stop you working for competitors, to supervise and direct how tasks are carried out, and to discipline or dismiss you if you break the rules. Broadly, the more control the employer exerts over you, the more likely you are to be an employee.

Especially in low-paid sectors such as courier delivery firms, employers are increasingly likely to organise their work and to manipulate contract documentation to minimise their exposure to basic rights at work. Trade unions have fought many successful tribunal claims to challenge this kind of behaviour.

False self-employment

Just because someone’s contract documentation labels them as self-employed, does not mean they necessarily are.

One of the most widely used ways in which employers try to avoid employment rights is by inserting substitution clauses into contracts, stating that an individual can send a substitute to do their work instead of them. Individuals rarely send substitutes to take their place in the real world. In a notorious case, a substitution clause was used to prevent Deliveroo cycle couriers accessing the statutory recognition procedure that enables workers to compel an employer to recognise their chosen union, in this case, the Independent Workers of Great Britain union. The Central Arbitration Committee (CAC) said that, had the couriers been workers, they would have ordered a recognition ballot. An organisation that successfully uses a substitution clause to prevent their workforce having worker status deprives that workforce of all the most basic statutory worker rights. This includes the right to the national minimum wage, holiday pay, control over working hours, rest breaks, protection from discrimination (including the duty to make reasonable adjustments for someone who is disabled), health and safety protection, and access to pensions autoenrolment. They also lose out on state benefits that rely on national insurance contributions.

The May government promised to reform employment status laws, targeting the use of substitution clauses and focusing on the amount of real control over individuals at work, rather than a notional “right to send a substitute”, but that promise appears to have fallen by the wayside.

The TUC campaigns for all workers, including agency workers, zero-hours contract workers and casual workers, to be entitled to the same floor of rights as employees, and for all workers to be able to access a trade union at work and benefit from collective bargaining of their terms and conditions.

Zero-hours contract workers

Most zero-hours contract (ZHC) workers are entitled to statutory work rights, including the national minimum wage and holiday pay. The problem for these workers is the chronic insecurity and unpredictability that comes with being a ZHC worker. They face the constant risk of future work being withheld if they speak up. And as economic conditions worsen, they are likely to be first to have their hours cut. In a typical ZHC arrangement, the written contract terms say that the employer is not obliged to offer any work, and the worker is not obliged to accept work. The employer only agrees to pay for hours worked. Sometimes, instead of hours being set at zero, the contract is set at, say, three hours a week – so called “short hours” contracts.

Unions have led a long-running battle against zero-hours contracts. The TUC wants workers to get guaranteed hours so they can pay the bills and save for the future and a right to reasonable notice of shifts and compensation if they are cancelled.

TUC research shows that two-thirds of those on ZHCs have been stuck on them for over a year, suggesting that they are not really being used by employers just to provide short-term flexibility.

Agency workers

Agency working is different from other forms of employment, due to the tripartite employment relationship involving the individual, the agency and the hiring employer. Most temporary agency workers are likely to have “worker” status, although some will be direct employees of the agency, with employee rights.

Temporary agency workers have all the rights of a worker, including rights to the national minimum wage, working time rights and protection from discrimination. In addition, qualifying agency workers have extra rights under the Agency Worker Regulations, based on the principle of equal treatment with comparable direct employees of the hirer in terms of pay, hours and holidays. They also have some specific extra rights linked to pregnancy.

Umbrella companies

Increasing numbers of agency workers are made to work via an ‘umbrella’ company. This adds an extra layer of complexity, making it hard to work out the agency worker’s net wages and any deductions, who they are working for and who is responsible for paying them.

In April 2020, things improved a little with the introduction of a mandatory key information document, which must be given to every agency worker and to the umbrella company, before the agency worker agrees contract terms with an employment agency. It must set out the key terms, including a worked estimate of take-home pay.

Agency workers are protected by the Agency Worker Regulations even if they work via an umbrella company.

Statutory employment rights

Some statutory employment rights are based on EU law and are enjoyed by workers across Europe. This includes discrimination law, restructuring rights, including TUPE protections, collective redundancy rights and information and consultation rights for trade unions or worker reps; and equal treatment rights for part-time workers, those on fixed-term contracts and agency workers.

These rights are under threat as a result of the UK’s decision to leave the European Union. The TUC campaigns to keep all the hard-won workers’ rights that come from the EU, and to make sure that UK workers get the same rights as workers in the EU into the future.

Some statutory employment rights are based on UK law. They include the right to protection from unfair dismissal and to a redundancy payment.

In summary, the main statutory employment rights are:

A written statement of terms and conditions

The right to a written statement of terms and conditions changed in important ways from 6 April 2020. From this date, all workers, not just employees, must be given a written statement. Most of the statutory information required must be in a single document given to the worker on or before their start date.

A key information document

As well as a written statement, since 6 April 2020, all agency workers must be given a key information document before agreeing contract terms with an employment agency.

Pay-related rights from the first day of work

• All workers have the right to be paid at least the national minimum wage.
• All workers are protected from unfair deductions from their pay.
• All workers have the right to an itemised pay slip.

Working-time rights from the first day of work

• All workers have the right to 28 days’ paid annual leave (part-time workers have rights to holidays calculated on a pro rata basis).
• All workers have the right not to work more than 48 hours a week on average. It is possible for some workers to opt out of this limit.
• All workers have the right to daily and weekly rest periods.

Statutory family-related rights

Statutory maternity leave and shared parental leave

A woman who is an employee is entitled to one year’s statutory maternity leave following the birth of her child. This can be converted into shared parental leave (SPL) if she wants to share the leave with her partner or the father of the child, or if she wants to take the leave in the first year on a more flexible basis than one continuous block.

Statutory paternity leave

An employee who is a father or a partner with caring responsibilities for a child has the right to one or two consecutive weeks of statutory paternity leave and pay, to be taken after the birth or adoption of the child. A further period of shared parental leave and pay may also be available.

Statutory adoption leave

An employee who becomes an adoptive parent has a right to statutory adoption leave. Shared parental leave is also available.

Parental leave

Up to 18 weeks of unpaid leave is available to employees who are carers of children under the age of 18. This is not the same as shared parental leave.

Bereavement leave

From 6 April 2020, all employed parents are entitled, from the first day of their employment, to up to two weeks’ leave if they lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy.

Flexible working

All employees with at least 26 weeks’ service can apply for flexible working. They do not need to have caring responsibilities in order to apply.

Unpaid dependency leave

Employees have the right to take time off work in order to deal with unforeseen matters and emergencies related to dependants. There is no statutory entitlement to pay during this leave, but union reps should negotiate appropriate agreements to pay with employers. See also ‘Parental and Carers’ Rights’ later in the manual on all of these matters.

Equal treatment rights for ‘atypical workers’ from the first day of work

• All part-time workers have the right not to be treated less favourably than full-time workers on all terms and conditions of employment (terms and conditions can be provided on a pro rata basis). Any difference must be objectively justified.
• All employees on fixed-term contracts have the right not to be treated less favourably than permanent employees on all terms and conditions of employment. Any difference must be objectively justified.
• It is unlawful for an employer to dismiss or select an individual for redundancy because they are a part-time worker or are employed on a fixed-term contract.
• From day one of their assignment, agency workers have the right to equal access to collective facilities provided by the employer; and the right to be notified of all vacancies within a hiring employer’s workplace.
• After 12 weeks working on the same assignment for the same hirer, agency workers have the right to equal pay, holiday and working time, when compared with a direct employee of the hirer, as well as improved pregnancy and adoption rights.

Equality rights from the first day of employment

All workers have the right not to be discriminated against or to suffer harassment or victimisation, on grounds of sex, race, sexual orientation, gender reassignment, pregnancy or maternity, marital status, disability, age, religion or belief. Employers owe a legal duty to make reasonable adjustments for disabled job applicants and workers. See Section 3, ‘Equality’.

Job protection rights for employees

Employees have a right to statutory notice before they are dismissed, except in cases of gross misconduct. From day one of their employment, all employees have the right not to be dismissed or selected for redundancy:

• on grounds of sex, race, disability, age,
• sexual orientation, pregnancy, marital status, religion or belief
• for maternity-related reasons
• because they raised health and safety concerns
• because they left or refused to return to their workplace in circumstances of serious and imminent danger or took other appropriate steps to protect themselves or others
• because of their part-time or fixed-term status
• because of their trade union membership or activities
• because they have ‘blown the whistle’ over the employer’s failure to comply with their legal duties
• because they raised concerns about a suspected or actual breach of their employment rights.

Employees can bring a claim from the first day of their employment for unfair dismissal if they are dismissed due to their political opinion or affiliation. However, dismissals related to political beliefs are not automatically unfair. An employer will still be able to dismiss if they can demonstrate that they have a potentially fair reason for dismissal and that they have acted reasonably in the circumstances.

• Employees with two years’ continuous service with their employer have the right to a written statement setting out the reasons for dismissal.
• Employees with two years’ continuous have the right to protection from unfair dismissal. A dismissal will only be fair if the employer has a potentially fair reason (misconduct, capability, some other substantial reason, redundancy or to comply with a legal duty or restriction) and has acted reasonably in the circumstances, including by following a fair procedure for deciding to dismiss the employee.
• Employees with two years’ continuous service with their employer have the right to statutory redundancy pay.
• Fixed-term contract employees with two years’ continuous service are also protected from unfair dismissal (see below for more information).

Job protection rights for workers

From the first day of work workers are:

• protected from detriment for asserting statutory rights, such as the right to the national minimum wage or holiday pay
• protected from detriment if they blow the whistle on wrongdoing at work
• protected from detriment for being a union member, taking part in union activities or accessing union services at an appropriate time
• protected from discrimination, victimisation and harassment
• protected from less favourable treatment because of their part-time status.

Trade union rights from the first day of employment

• Everyone has the right not to be refused employment or offered an assignment by an employment agency because of their trade union membership or activities.
• Everyone has the right not to be refused employment or to suffer a detriment (including dismissal) because they have been ‘blacklisted’ because of their trade union membership or activities, including seeking or supporting union recognition.
• All workers have the right to be accompanied by a union workplace rep or a full-time union officer in all formal grievance and disciplinary hearings.
• All workers have the right not to suffer detriment, including dismissal, because of their trade union membership or activities or for refusing a financial incentive to opt out of trade union membership or collective bargaining.
• Trade union officials who are employees working in workplaces where their union is recognised have the right to reasonable paid time off for trade union duties and for training.
• Trade union members who are employees working in workplaces where their union is recognised have the right to time off for trade union activities with the agreement of the employer.
• Trade union members have the right not to be made an offer that is intended to stop their terms and conditions (or any of them) being negotiated by their union through collective bargaining.

The written statement of employment terms and conditions

Important changes were made on April 2020 to the right to a written statement of employment terms and conditions. In addition, the written statement must be given to all workers, not just employees. This is a change to the law. Before April 2020, only employees got a written statement. Most of the statutory information must be in a single document that employers must give to the worker on or before their start date (see the list below). However, some of the information can be contained in separate documents. All the information that must be included in the single document must be provided on or before the work start date, regardless of how long the work is to last.  Information about pensions, collective agreements, non-obligatory training and a note about disciplinary procedures can be provided within two months of the start date. The single document can be a letter of appointment or  for employees only) a contract of employment. Alternatively, a separate written statement can be provided.

Here is the information that must be included in a single document provided on or before the start date:

• names of employer and worker
• date employment or engagement begins
• for employees only, the period of continuous employment
• any probationary period, including how long it lasts and any conditions that must be satisfied
• pay scale and rate(s) of pay, pay intervals (for example, weekly or monthly), overtime and overtime pay (if any) and pay calculation methods
• any other pay, including in cash or in kind, such as vouchers or lunch and any non-contractual benefits
• hours of work, including normal working hours (for example, shift arrangements) and any terms as to normal working hours – the statement must state the days of the week the worker is required to work, whether their hours or days may vary and if so, how and how this is decided
• holiday entitlement and holiday pay, including public holidays, and rights to accrued holiday pay on termination
• length of notice needed from both employer and worker and any terms about how notice must be given
• job title or a brief description of duties
• whether the employment is permanent or, if it is fixed-term, the expected end date
• place of work and the employer’s address: if the worker is required or permitted to work at various places, confirmation of this
• if the worker is required to work outside the UK for over a month, arrangements for this.
• any compulsory training ›› any training the employer requires but will not pay for.

The following information must be provided but can be in separate documents, as long as they are reasonably accessible at work, such as in a staff handbook:

• rules about sickness or injury absence and sick
• pay – these must be provided on or before the work start date
• information about other kinds of paid leave, such as paid maternity and paternity leave – this must be provided on or before the start date
• details of pension contributions and pension schemes – this can be provided within two months of the start date
• details of any collective agreements that directly affect the contract terms – this can be provided within two months of the start date
• details of any non-obligatory training entitlement – this can be provided within two months of the start date
• details of disciplinary and grievance procedures, or information about where to find them – this can be provided within two months of the start date.

If there are no terms relating to any of the above items, this must be stated. In addition to the written statement, agency workers must be given a key information document containing the key contract terms that govern their relationship with the employment business or agency, including pay.

The contract of employment

All employees will have a contract of employment. A contract of employment is an agreement with an employer that sets out an employee’s terms and conditions of employment, and their duties and responsibilities. A contract of employment does not have to be in writing. A contract can also be an oral agreement or can be based on what happens in the workplace (ie custom and practice). The statutory written statement of terms and conditions (see above) is not an employment contract, but it can be important evidence of the terms of someone’s employment contract. A contract of employment can consist of:

• express terms, which are written in a contract of employment, a staff handbook or a collective agreement
• implied terms, which are not necessarily written down but are assumed by the courts to exist because the employee is providing a service for an employer – implied terms include duties on employees to obey and co-operate with the employer and duties on the employer to avoid actions that will undermine the mutual trust and confidence between themselves and employees
• terms set by custom and practice (which are also implied terms), which reflect the normal or regular practice in the workplace – for example, if employees are always provided with a Christmas bonus, this may become part of an individual’s contract.

An individual’s contract of employment often contains rights that exceed the statutory minimum. But a contract of employment cannot undercut statutory employment rights, and an employer cannot pressure an employee to agree to sign away their statutory rights. Any term in a contract of employment that does not meet at least statutory employment rights will be void and any waiver of statutory rights will not be effective.

Collective agreements

Wherever possible, trade unions will try to be recognised by employers for the purposes of negotiating terms and conditions of employment. Such negotiated terms and conditions are contained in a collective agreement. Negotiated conditions will form part of employees’ contracts of employment, usually as a result of a term in individuals’ contract stating terms and conditions that will be determined and changed by a collective agreement. Collective agreements do not apply only to members of the union; they also set the terms and conditions for employment for all employees in a bargaining unit.

Some parts of a collective agreement will not form part of a contract of employment, including, for example, agreements on how employers and trade unions will negotiate and consultation arrangements. Also, negotiated policies on the selection criteria for redundancies and sometimes redundancy pay will not form part of a contract unless there is clear evidence that the employer and trade union agreed that the policy was intended to create legal entitlements.

Role of the rep: Terms and conditions of employment Check that terms and conditions of work are clearly specified in writing in a staff handbook. Working conditions should be clearly set out but not specified in too much detail, so as to ensure that they are flexible enough to apply in a broad range of circumstances. Ensure that staff receive written copies of terms and conditions of employment. Try to ensure that all staff are provided with job descriptions that clearly specify work responsibilities. Resist the inclusion of flexibility clauses in contracts that permit employers to make significant changes to an individual’s responsibilities or conditions of employment, including change of work location without the need for agreement. Resist the inclusion of clauses that permit employers to change – and, in particular, cut employment conditions (including pay rates and holiday and sick pay arrangements) without the need for negotiation and agreement. Monitor the use of casual work and zerohours contracts and resist the inclusion of substitution clauses

Changes to the contract of employment An individual’s contract of employment can be lawfully changed only by agreement. Where terms are negotiated through collective bargaining, any change to those terms must be agreed with the union. It is unlawful for an employer to change or cut terms and conditions unilaterally, that is, without the agreement of a union or the employee. Any unilateral change in conditions is likely to be a breach of contract or an unlawful deduction of wages, which may be challenged in an employment tribunal or court. (Note that employment tribunals can deal with a claim for breach of contract only where an employee has left employment or has been dismissed. You should always seek advice from a full-time official or the union legal officer before considering any legal action.) Illegal contracts of employment

Contracts of employment are likely to be illegal if:

• the employee gets all or part of their wages as ‘cash in hand’
• tax and NI contributions are not paid ›› the employee knows they are getting paid in this way to avoid paying NI and tax.

Speak to a full-time official if you think a contract of employment may be illegal. It probably means that the member cannot bring an employment tribunal claim, but this will not always be the case.

In particular, the fact that someone’s immigration status does not legally allow them to do their job will not necessarily prevent them bringing a tribunal claim. It all depends on the facts.

Part-time workers – the right to equal treatment

Part-time workers have the right not to be treated less favourably than full-time colleagues. The Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 were introduced thanks to trade union campaigning in Europe. These equal treatment rights apply to all part-time workers, not just employees (see Employment Status above), from the first day at work. The rights apply regardless of the number of hours part-time workers work. Part-time workers have the right to compare themselves with someone who is a full-time worker doing a similar job for the same employer. Any less favourable treatment must be objectively justified. Part-time workers have the right not to be treated less favourably by their employer than their full-time colleagues on all terms and conditions of employment, or in any other way, simply because they are working part-time. This includes equal treatment on:

• pay – both in terms of basic pay rates and other pay-related benefits (such as access to performance- and profit-related pay schemes)
• holiday entitlement – on a pro-rata basis; employers cannot round down the number of days part-time workers are entitled to as this would be less favourable treatment, but fractions of days may be given as hours
• bank holidays and public holidays – where employers give full-time staff additional time off for bank holidays or public holidays, they should also provide part-time workers with additional time off, proportionate to their part-time hours, even though their normal working pattern does not always coincide with public holidays
• overtime – employers can apply the same hours threshold to part-time workers as to full-time workers; so part-time workers may only be entitled to overtime pay once they have worked in excess of the normal hours of a full-time worker
• pensions – part-time workers have the right to join any occupational pension scheme that is provided by the employer and that is open to comparable full-time workers, unless the employer can show that the costs of administering this would outweigh any benefits to the part-time workers. Any pension should be provided on a pro-rata basis reflecting the hours the individual works. (Part-time workers benefit from pensions auto-enrolment, but the employer is only obliged to enrol them automatically if they earn at least £10,000 (that limit set on April 2020) from one job, although they can ask to be enrolled.)
• sick leave and pay ››maternity, paternity, adoption and shared parental leave and pay, including workplace policies exceeding the statutory minimum
• training – which should be scheduled as far as possible to allow part-time workers to participate. While on a training course (including a union course), part-time workers should be paid the same as a full-time worker on the course if the length of the course means that it goes on past normal working hours
• redundancy – part-time workers cannot be selected for redundancy because they are parttime. They are also entitled to redundancy pay on a pro rata basis
• other workplace benefits – for example access to car parking, gym facilities, a canteen, a crèche or childcare vouchers. Part-time workers should not be excluded from these and should be entitled to access them on the same basis as comparable full-timers.

Zero-hours and short-time hours contract workers will be part-time workers and are entitled to benefit from protection under these regulations. To claim these rights, they must be able to point to a real full-time worker employed by their employer to compare themselves to, who is doing the same or broadly similar work to their own.

Pro rata rights

Part-time workers are entitled to contractual rights on a pro rata basis reflecting the hours that they work. For example, if an individual works 24 hours a week and similar full-time workers doing the same job are on 40 hours per week, the part-time worker will get 24/40 (or 3/5) of the full-time worker’s entitlement. Their weekly pay should be 3/5 of the full-time worker.

Making a comparison

To be able to claim rights under the Regulations, individuals have to show that they have been treated less favourably than a full-time worker who

• works for the same employer, and
• works in the same workplace (or, if there are no full- time workers in that workplace, a full-time worker in another workplace owned by the same employer), and
• works on the same type of contract, and
• is doing the same or similar work.

Tribunals take a broad approach when deciding whether two workers have the same type of contract. A mere difference in hours is not a basis for saying someone’s contract is not the same type. Otherwise, the whole purpose of the regulations would be defeated. This means that a zero-hours contract or casual worker can compare themselves with a full-time worker, as long as the work they do is broadly the same or similar.

Example 1: If an individual works part-time in a shop where every shop assistant is part-time and they find out that the full-time shop assistants in the shop next door are better paid, this is no help as they are not working for the same employer.

Example 2: Nor would it help to find out that a full- time manager is getting better sick pay – because they are not doing the same or similar work as the worker and so would not be considered a suitable comparison.

Example 3: Someone employed full-time by your employer at another location is carrying out the same job as you and is getting a better hourly pay rate. You may well be able to rely on the Regulations in these circumstances.

Workers who move from full-time to part-time work can make a comparison with their previous conditions to demonstrate less favourable treatment. This may particularly assist workers who were full-time but request part-time work when they return from maternity leave (but it only applies if the woman has returned to work within 12 months of her maternity absence beginning).

Employer defences to less favourable treatment

Employers can defend a claim by a part-time worker under these regulations if they demonstrate that the less favourable treatment is objectively justified. This means that the treatment is:

• to achieve a legitimate objective, such as a genuine business objective

• necessary to achieve that objective, and

• a proportionate way to achieve that objective.

Employers must provide equal treatment for part-time workers on each term of their contract. For example, they cannot argue that because a part-time employee’s overall terms and conditions are no less favourable than a full-time employee’s terms and conditions, it is acceptable to provide part-time workers with less sick pay entitlement than full-time workers.

Using discrimination law

As the majority of part-time workers are women, discrimination against part-time workers can often amount to indirect sex discrimination. In some cases, using sex discrimination law may be advantageous where there is no comparable full-time member of staff doing similar work in the workplace.

You would have to show that providing less favourable terms or treatment to part-timers puts women at a particular disadvantage when compared to men because women are the majority of the part-time workforce. The Part-time Workers Regulations do not apply to job applicants. However, employers may be guilty of in direct sex discrimination if they do not consider people who wish to job share or work part-time, as women are more likely to have primary caring responsibilities which may make it difficult for them to work on a full- time basis. Employers should review their recruitment policies and consider whether some jobs could be done by part-timers or job sharers. An employer is allowed to objectively justify any indirect sex discrimination by showing that the practice (in this case of a policy that means part- timers are treated less favourably) is a proportionate means of achieving a legitimate aim.

The right to request flexible working

All employees with 26 weeks’ service have the right to have a request to work flexibly considered by their employer. This includes requests to change hours (including a reduction from full-time to part-time hours), the times when these hours are worked and where the work is carried out, for example working from home some or all of the time.

The flexible working rights apply to those who:

•  are an employee but not an agency worker or member of the armed forces
• have worked for an employer continuously for 26 weeks before making the request
• not have made a request within the last 12 months.

Bear in mind that any change to contract terms will be permanent unless both parties clearly agree that it is to be temporary. If the member wants a temporary change, for example to deal with a period of study or a bereavement, there may be another, more suitable policy available, or it may be possible to deal with the issue informally. Any agreement should be clearly recorded in writing.

Making an application

An application must:

• be made in writing and state that it is being made under the statutory right to apply for flexible working
• set out the proposed change to an employee’s working pattern and explain what effect they think this will have on the employer’s business or organisation and how this might be dealt with
• specify a start date for the proposed change, giving the employer reasonable time to consider the proposal and implement it. This may take 12 to 14 weeks
• state if the employee has made a previous application under the right and if so when
• state if the request is in relation to the Equality Act 2010, for example as a reasonable adjustment for a disability
• be dated.

How should an employer respond to an application?

The Acas Code of Practice ‘Handling in a reasonable manner requests to work flexibly’ states that the employer must:

• consider the request
• not discriminate unlawfully
• inform the employee of the decision
• act promptly, this means a decision must be made, taking into account appeals, within three months of receiving the request.

The Acas Code of Practice says that employers should:

• consider the request carefully (this is not repetition, the key word is ‘carefully’).

• discuss it with the employee

• allow the employee to be ‘accompanied by a work colleague’

• inform the employee of their decision in writing as soon as possible discuss any amendments to the employee’s request

• discuss how and when the changes might best be implemented

• try and ensure that any discussion takes place in a private place

• allow the employee to appeal a decision.

The use of the word ‘must’ indicates a statutory duty. ‘Should’ indicates ‘good employment practice’.

On what grounds can an employer refuse an application?

Note that the right is to request flexible working arrangements; it is not a right to work flexibly. Employers can refuse applications but only for the following reasons:

• burden of additional costs
• inability to reorganise work among existing staff or to recruit additional staff
• detrimental impact on the ability to meet customer demand
• detrimental impact on qualify or performance
• insufficient work during the periods the employee proposes to work
• planned structural changes.

When making a request, it can be a good idea to suggest a trial period to test whether the member’s proposed changes work in practice and to iron out any problems. It is much harder for an employer to turn down a request on the basis of one of the statutory reasons listed above if the member has used a trial period to demonstrate that perceived challenges can be overcome. The Acas Code of Practice also says that employers should make clear to their employees what information they need to include in a written request to work flexibly. Union reps will want to raise this issue with managers to make sure that the process for making a request is clear. Reps will also want to advise members correctly and be able to support them in their applications for flexible working, including during discussions with managers.

Note that where a woman’s request to change her working hours is unjustifiably refused by the employer, she may be able to claim direct or indirect sex discrimination under the Equality Act. The same applies where a woman’s request to work flexibly on her return from maternity leave is refused by her employer. Where a man has a flexible working request rejected but a woman in similar circumstances had her request accepted (eg a father of young children compared to a mother of young children) then he could have a claim for direct sex discrimination.

Fixed-term employees – right to equal treatment

Employees on fixed-term contracts have the right to treatment equal to permanent employees working for the same employer. These rights are found in the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002. Fixed-term employees have the right to no less favourable treatment on most terms and conditions of employment than permanent employees, including:

• pay
• holiday rights, bank holidays and public holidays
• overtime
• pension rights
• sick pay and leave
• parental rights, including maternity, paternity, and adoption leave and pay
• redundancy pay
• workplace benefits, for example staff canteens, staff parties, car allowances, health care benefits, subsidised membership of gyms, staff discounts
• union representation
• access to training.

If any contractual terms rely on length of service, fixed-term employees will be required to meet the qualifying period in the same way as permanent staff. In order to qualify for rights to equal treatment, you must be an employee. These rights are not available to ‘workers’ or to agency workers. The employment contract must be for a ‘fixed term’ – meaning that it must end on a given date, or after a specific event or on completion of a task. For example, if an individual is employed:

• on a fixed-term contract to cover maternity leave
• for a fixed period to complete a project that requires specialist skills
• for a fixed period to cover a period of peak demand (for example retail or agricultural).

Making a comparison

To be able to claim rights under the Regulations, fixed-term employees must show that the employer has been treated them less favourably than a permanent employee who: works for the same employer and

• works in the same workplace (or, if there are no permanent workers in that workplace, a permanent employee in another workplace owned by the same employer) and
• is doing the same or similar work.

Fixed-term employees cannot make comparisons with former employees. This can be important in redundancy situations, for example, where an employer is making a group of employees redundant and permanent staff are laid off before fixed-term employees, the temporary staff will not be able to rely on
the Regulations if they receive less favourable redundancy pay than the permanent staff. If the fixed term employees are predominantly female and the permanent staff are predominantly male, there may be a claim for sex discrimination. 

Employer defences to unequal treatment

Employers can defend a claim by a fixed-term  employee that they have been treated less favourably than their permanent comparator by showing that the less favourable treatment is objectively justified. This means that the  treatment is:

• to achieve a legitimate objective, such as a  genuine business objective
• necessary to achieve that objective, and a  proportionate way to achieve that objective.

An employer is allowed to justify less favourable  treatment of a fixed-term employee in relation  to one contract term, for example holidays, by  proving that viewed overall, their package is  comparable to that of a permanent employee.

Pregnancy and maternity leave 

Employees on fixed-term contracts have the  same rights as permanent staff to protection from discrimination on the grounds that they are  pregnant or taking maternity leave. A fixed-term  employee must not be dismissed or refused  employment or renewal of contract on these  grounds.

Access to permanent  employment and job security

The Fixed-term Employees (Prevention of  Less Favourable Treatment) Regulations create important job security rights for  fixed-term employees.

Where an individual is employed on a  succession of fixed-term contracts and their  contract is renewed after four years of continuous  employment, they will become a permanent  employee, unless the employer can objectively  justify not making them permanent. In these  circumstances, employers will need a very good  reason to be able to justify not making the  individual permanent. The fact that an employee’s employment  is externally funded is unlikely to be a  sufficient reason.  Employers can agree with unions a different  period of time after which a fixed-term employee  will become permanent. Collective agreements  can also limit the use of successive contracts  and set a list of reasons to justify renewals of  fixed-term contracts.  Fixed-term employees also have the right to  receive information on permanent vacancies  within the organisation. 

Rights on termination of  contract: notice and dismissal

A fixed-term contract will terminate either on the  date specified in the contract or on the completion  of a specific task, set of tasks or project. An employer does not have to give separate notice to  end the contract. However, if an employer decides to end a  fixed-term contract early they must give notice.  The employee must be given the same length of  notice as a permanent employee would receive. As a minimum this will be statutory notice periods  (see below), although collective agreements may  provide for longer notice periods. Employees are also required to give one weeks’ notice if they want to terminate the contract early. However, if their contract requires them to give a longer notice period, they must comply with this. Where a fixed-term contract comes to an end  and the employer decides not to renew it, the law treats this as a dismissal. An employee with at least two years’ continuous service will be protected  by unfair dismissal law. The employer must have a  fair reason for not renewing the contract. In most cases, the reason is likely to be redundancy, due to the decline in demand for that type of work or due to lack of funding for on-going employment. They will have the redundancy rights explained below.

The employer must also provide the employee with a written statement of the reasons for dismissal. No service is needed where the fixed-term contract is not renewed for a reason that is automatically unfair (for example, because the fixed-term employee was pregnant or engaged in lawful trade union activities).

Employers must also follow a fair dismissal procedure. This will involve consultation meetings with the individual, at which the employer should:

• discuss the reason for not renewing the contract
• explain why the individual has been selected for redundancy (this will be particularly important where other fixed-term employees are having their contracts renewed)
• consider whether it is possible to redeploy the employee in suitable alternative employment.

Employers must not discriminate when selecting people for redundancy. In particular, it is unlawful to select an individual for redundancy on the grounds that they are employed on a fixed-term contract. The consultation meetings must take place before the employee is dismissed. If the employer does not start the consultation process early enough, they should extend the contract of employment until the consultation has been completed.

In April 2013, changes were made to the rules on collective redundancy consultation to limit an employer’s collective consultation obligations in connection with the ending and non-renewal of fixed-term contracts. As a result, dismissals due to the ending and non-renewal of fixed-term contracts will not trigger the duty to consult with unions, no matter how many such contracts are ended within a 90 day period, unless the contracts are ended prematurely for a reason related to redundancy (for example, a funding cut or the premature ending of a project). It is important to remember that this change to the law made no change whatsoever to the employer’s duty to consult individually with fixed-term employees at risk of redundancy, or to the rights of fixed-term employees not to be selected for redundancy because they have a fixed-term contract. A fixed term employee who is made redundant is entitled to equal treatment with a permanently employed colleague sharing the same employer as to redundancy pay and as to all redundancy processes, including selection, redeployment, and access to training.

Redundancy pay

As a minimum, after working continuously for an employer for more than two years, fixed-term employees will have the right to statutory redundancy pay. However, where employers have a redundancy policy that exceeds the statutory minimum, the employer must provide fixed-term employees with the same payments as any equivalent permanent employee who is being made redundant.

Agency workers – right to equal treatment

Thanks to trade union campaigning in the UK and in the EU, since 1 October 2011 temporary agency workers have had equal treatment rights. These rights are contained in the Agency Worker Regulations 2010. Agency workers who are supplied via a labour market intermediary such as an umbrella company or a payroll business are also protected by these regulations.

Rights to equal treatment

After working for 12 weeks in the same job for the same hirer, a temporary agency worker will have the same pay, holiday and working time entitlements as a comparable direct employee of the hirer doing the same job. The Regulations state that pay includes:

• basic pay rates, including hourly and weekly rates of pay and salaries
• overtime pay
• unsocial hours payments
• risk payments
• holiday pay
• contractual bonuses and performance-related pay that relates to an individual’s performance
• vouchers with a monetary value that can be exchanged for goods or services, for example childcare vouchers, luncheon vouchers and vouchers for eye tests.

The following are not covered by the equal treatment rights:

• occupational pensions (although agency workers are covered by pensions autoenrollment)
• occupational sick pay (although agency workers are entitled to statutory sick pay)
• redundancy pay
• maternity, paternity or adoption pay
• paid time off for trade union duties or training expenses
• performance-related pay that aims to reward an individual’s loyalty or long-term employment or organisational performance, including profit-related bonuses.

 Abolition of Swedish derogation contracts

On 6 April 2020, so called ‘Swedish derogation’ style contracts were abolished with immediate effect, in a major victory for the TUC and trade unions. There was growing evidence of widespread abuse of these provisions, and clear evidence that Swedish derogation contracts were rarely, if ever, entered into at a worker’s request. The ‘Swedish derogation’ was in regulation 10 of the AWR (now repealed). These arrangements became widely known as ‘Swedish derogation’ contracts because the exemption was permitted by the European Commission during the negotiation of the Agency Workers Directive, to accommodate working patterns peculiar to Sweden. Regulation 10 enabled agencies and hirers to escape their obligation to provide equal pay (but not equal treatment on holidays and working time) for any arrangements that met minimum criteria, including a permanent contract with pay between assignments. Since 6 April 2020, a permanent contract providing pay between assignments no longer allows an agency worker to opt out of their right to equal pay. Instead, all agency workers are entitled to the same pay as a permanent employee of the hirer after twelve weeks in the same role with the same hirer. Any Swedish derogation-style contracts that are in still in place after 6 April 2020 do not fall away automatically, but the agency worker has their right to have equal pay automatically restored.

Equal treatment on holidays and working time

 After 12 weeks in the same job for the same hirer, agency workers will be entitled to equal treatment on holiday entitlements, including:

• holiday pay
• the ability to take leave
• pay premiums for working on public holidays.

Holiday entitlements are not limited to statutory entitlements. Agency workers have the right to equal treatment on all contractual workplace entitlements. Agency workers should also receive holiday pay during any period of leave. Agency workers should not receive rolled-up holiday pay. Agency workers will also be entitled, after 12 weeks in the same job for the same hirer, to equal treatment on working-time entitlements, including:

• daily and weekly rest periods
• breaks
• overtime pay and access to overtime
•  pay during travel time or waiting time, where directly employed staff receive the same payments.

The hirer or agency is not allowed to justify unequal treatment by pointing to the overall value of the agency worker’s package. Instead, each term must be compared with an equivalent term in the contract of a direct hire. In other words, organisations cannot buy out these rights by offering premium rates of pay.

Pro rata rights and service requirements

Agency worker’s rights to equal treatment on pay, holidays and working time may be calculated on a pro rata basis where the agency worker works shorter hours than staff employed directly by a hirer. Agency workers with a zero-hours contract can rely on the regulations to compare their pay, holidays and hours to those of direct employees of the hirer. Where there is a service requirement for a benefit or entitlement, agency workers must meet that service requirement in the same way as directly employed staff. Agency workers can take their 12-week qualifying period into account when assessing how much holiday entitlement they have accrued. This is important in determining how much paid holiday an agency worker is entitled to above the statutory minimum.

Calculating the qualifying period

An agency worker will need to accrue 12 weeks’ service in the same job with a hirer in order to qualify for equal treatment on pay, holiday and working time entitlements. When calculating how much service an agency worker has accrued, any calendar week in which an agency worker has done any work will count towards the qualifying period, even if it is just one hour a week. An agency worker’s qualifying period will be broken and the qualifying stopwatch will be reset to zero where:

• an agency worker has six weeks’ absence or more from the hirer’s workplace (subject to certain permitted reasons for absence, including sickness and family-related leave –see below)
• an agency worker starts a substantively different job for the hirer.

Absences that don’t break an agency worker’s qualifying period

An agency worker’s qualifying period stopwatch will not be reset to zero where they are absent from a hirer’s workplace for one or more of the following reasons:

• absences of less than six weeks
• sick leave of up to 28 weeks
• holidays or other periods of absence agreed with the hirer
• jury service of up to 28 week
• where there is a temporary cessation of work, eg due to school holidays or a summer factory closure
• where the individual was participating in a strike or industrial action.

In these situations the qualifying stopwatch will be paused. When the agency worker returns to the same assignment, the qualifying stopwatch will continue from the point it was paused.

Absences where an agency worker’s qualifying period will continue to accrue.

An agency worker’s qualifying stopwatch will continue to accrue during:

• the first 26 weeks of maternity leave
• any period of maternity, paternity or adoption leave where the agency worker has a contractual or statutory right to the leave.

This means that agency workers who return to an assignment in the same job with a hirer after a period of maternity leave are likely to have qualified for equal treatment, provided their assignment would have lasted or was expected to last during their period of absence.

Substantively different job

An agency worker’s qualifying stopwatch will also be reset to zero where they move to a substantively different job with the same hirer. In order to be a substantively different job, it is likely that the main job duties or the skill-set required for the job change. The fact that an individual moves departments or locations but is still doing the same job is unlikely to be enough to break continuity of service.

Anti-avoidance provisions

The Agency Worker Regulations contain anti-avoidance provisions that aim to reduce the ability of agencies and hirers to rotate agency workers within an organisation or company or between different companies in order to avoid equal treatment rights.

Under the Regulations, an agency worker will be deemed to have qualified for equal treatment where:

• they have worked on more than two assignments with the same employer or an associate company, or
• they have worked in more than two different jobs for the same hirer,
• and the most likely explanation is that the agency, the hirer or the associated company intended to prevent the agency worker from qualifying for equal treatment.

Where an agency or hirer has breached the anti-avoidance provisions an employment tribunal can award compensation of up to £5,000.

Day-one rights for agency workers

Under the Regulations, agency workers will also have a right to the following from the first day of any assignment:

• equal access to collective facilities provided by the employer, such as transport facilities, staff canteens and childcare facilities
• information about vacancies in the hirer’s workplace.

Pregnancy and adoption rights for agency workers

Temporary agency workers also benefit from extra rights for pregnant women. After an agency worker has worked for 12 weeks in the same job for the same hirer:

• Pregnant agency workers have the right to paid time off for ante-natal appointments after 12weeks’ continuous service in the same job for a hirer.
• Pregnant agency workers have the right to be offered alternative assignments or to be suspended on full pay for health and safety reasons.
• Expectant fathers or partners of a pregnant woman have the right to unpaid time off to accompany her to up to two antenatal appointments.
• Prospective adopters can take time off for adoption appointments. An agency worker who is a single adopter or a ‘primary adopter’ in a couple can take paid time off for up to five appointments. A ‘secondary adopter’ can take unpaid time off for up to two appointments. Couples decide between themselves who is to be the primary and secondary adopter.

Note that employed agency workers have these rights from the first day of their employment contract. They do not need to build up 12 weeks of service in the same job working for the same hirer.

Making a comparison

The approach taken in the AWR to equal treatment on pay, holidays and working time entitlements differs from that used for other equal treatment rights. Under Regulations, agency workers are entitled to the same pay, holidays and working time entitlements as if they had been recruited directly by the hirer.

The key question for the purposes of the AWR is: What would the agency worker have been paid and what would their holidays and hours have been if they had been directly recruited by the hirer to do the same job?

Union reps should be aware that agency workers only have the right to equal treatment with terms and conditions ordinarily included in the contracts of the hirer’s employees or workers. This means that when assessing whether they have received equal treatment, agency worker’s pay and conditions should be compared with those contained in:

•  standard contracts given to the hirer’s employees or workers
• a collective agreement – whether a workplace agreement or a national agreement
• a staff handbook
• pay scales
• grading systems the going rate for a job
• custom and practice
• a review body award.

Genuinely individualised terms or purely discretionary bonuses and benefits will not normally be covered by equal treatment rights. But where a bonus or benefit is receive don a regular basis and has become custom and practice it will be covered by equal treatment rights.

Guiding principles for establishing equal treatment

• In workplaces with pay scales or clear pay structures, it should be relatively straight forward to identify the appropriate entry point on the pay scale, taking into account an agency worker’s skills, qualifications or length of service.
• In workplaces with no formal pay structure, but where there is a going rate for the job, agency workers will be entitled to the going rate after12 weeks.
• In workplaces with individualised pay rates, agency workers may not be able to claim equal pay, but if all the hirer’s employees are entitled to 30 days’ leave from the first year of employment, then agency workers will be entitled to 30 days’ holiday after 12 weeks.

If the hirer does not directly employ any workers to do the same job as agency workers in a particular workplace, the agency worker maybe able to compare their pay and conditions to those of employees or workers employed by the hirer to do the same or similar job in another workplace. Agency workers may also be able to compare their pay and conditions with those of a former employee.

Who is responsible for a breach in agency workers’ rights?

The Agency Worker Regulations state that the agency and the hirer will be held liable by employment tribunals for breaches of equal treatment rights on pay, holidays and working time to the extent that they are responsible for a breach of an agency worker’s rights. Agencies will have a defence where, after taking all reasonable steps, the hirer has failed to provide them with accurate information about pay, holiday and working time entitlements in the workplace. In these cases, liability passes to the hirer.

If filing an employment tribunal claim for equal treatment rights, it will be important to name both the hirer and the agency. Tribunal time limits are very short. Speak to a union officer if you are unsure.

For more detailed information about the equal treatment rights for agency workers, see the TUC’s Delivering Equal Treatment for Agency Workers: a TUC guide.

Role of the rep: Representing all workers Reps should use information rights to organise, represent and bargain for part-time, zero hours, fixed-term and agency workers, ensuring disclosure of information for collective bargaining. In recognised workplaces, union reps can use the right to disclosure of information for collective bargaining to: monitor levels of part-time, fixed-term and agency working in their workplace map where such workers are deployed in order to organise them request information about the pay and conditions of these workers request information about training and promotion opportunities for part-time, fixed term and agency workers use this information to bargain on equal treatment demonstrate the additional costs associated with the use of agency workers and to argue for increased permanent employment for agency workers as a cost-cutting exercise. Equal treatment questionnaires Union reps can use equal treatment questionnaires to access information about: less favourable treatment for part-time, fixed term and agency workers how employers seek to justify less favourable treatment and the comparators they may rely on Conduct of Employment Agencies and Employment Businesses Regulations Union reps can use information rights for agency workers under the Conduct of Employment Agencies and Employment Businesses Regulations 2003 to access written statements, including information about: pay rates and holidays for agency workers the location of assignments and skills and qualifications that agency workers require to work on an assignment, which can be used as evidence of attempts by hirers and agencies to avoid equal treatment rights.

The key information document

All agency workers who sign up with an employment business after 6 April 2020 must begiven a key information document (KID) before agreeing contract terms with an employment business or agency. They must also be given a written statement of employment terms and conditions. Where an intermediary or umbrella company is involved, the KID must be given to that organisation as well as the individual agency worker

The KID must include this information:

• exact pay rate, or minimum pay the employment business expects to achieve for the agency worker (for example, not less than the national minimum wage
• contract type
• pay intervals
• description of all pay deductions. Non-statutory deductions and fees such as the umbrella company’s ‘margin’ must be listed, stating the amounts to be deducted or explaining how they are calculated with illustrations using real numbers. Estimates are allowed as long as there is a realistic assessment of how deductions affect the pay rate and take-home pay
• any fees (such as the cost of a DBS check)
• any non-monetary benefits ›› contact details for the Employment Agency Standards inspectorate identity of the organisation the agency worker will be working for
• if an intermediary or umbrella company is involved in paying the worker, how the income passes from the employment business through the umbrella company before the worker gets the net amount, what deductions are made and why.

The KID must be easy to understand and no more than two A4 pages. Where terms change, a revised document must be provided within five days. Records must be kept for 12 months. The information in the KID should help agency workers to understand who is responsible for paying their wages and how their wages are worked out. It will also help union reps and advice centres trying to advise these workers of their rights and unions who are campaigning and supporting these workers.

Negotiating improvements

Union reps can seek to negotiate improvements with employers, including:

• access for union reps to meet agency workers, for example in induction meetings
• access to the hirer’s grievance procedures for agency workers – because effective grievance procedures will reduce the likelihood of employment tribunal claims involving the hirer
• equal treatment for part-time, fixed-term and agency workers
• access to permanent employment for agency workers and equal treatment from day one
• flexible working policies.

Protections for employees during transfers (TUPE): an overview

The Transfer of Undertakings (Protection of Employment) Regulations 2006 (known as the TUPE Regulations) provide some job security and protection for employees’ terms and conditions of employment where a business or part of a business is transferred to a new employer. The extent of that protection was significantly reduced as a result of changes to the regulations made in 2014.

Public sector employees have protection that is equivalent to TUPE protection under the Cabinet Office Statement of Practice ‘Staff Transfers in the Public Sector’, which was published in 2000 after a lengthy period of discussion and consultation with trade unions. All the rights in the TUPE Regulations apply only to ‘employees’. Generally, casual workers and agency workers are not protected by the Regulations.

When does TUPE apply?

The TUPE Regulations apply when:

•  A company or organisation sells either part or all of the business to another employer. This is called a business transfer.
• A service or service activities are out-sourced, in-sourced or reassigned to another employer. This is called a service provision change. This kind of transfer typically affects employees who work in labour-intensive services such as call-centres, catering, office-cleaning, refuse collection or security and need not involve a group of employees; a service provision change can occur even if a service is carried out by a single employee, for example, where a business employs just one person to clean offices.

When does TUPE not apply?

For TUPE to apply there must be a change of employer. Therefore, TUPE does not usually apply where:

• A company’s shares are sold to new shareholders – this is because there is no transfer of the business and no change in employer.
• The existing service provider successfully bids to retain the contract on a re-tender (there is no change of employer, so TUPE does not apply).
• There is a sale of assets, such as land and buildings, but no sale of the business as a going concern (such as the business’s brand name or reputation, its client data base or orders list).

TUPE also does not apply where:

•  A service is bought on a ‘one-off’ basis, for example from a solicitor or accountant.
• The contract involves the supply of goods or services to the client for the client’s own use.

Must an employee agree to work for the new employer?

Employees selected to transfer cannot be forced to work for the new employer. Employees who do not want to work for the new employer can object to the transfer by notifying the original or new employer before the transfer takes place. However, there are important legal risks to simply objecting to a transfer, so this step should only be taken after taking advice from a union officer. Specifically, when an employee notifies their employer that they object to a transfer, this is likely bring their employment to an end automatically, but the employee will not be treated as if they have been dismissed. They will have no right to claim unfair dismissal rights or a redundancy payment. The original employer can offer to re-engage the employee, but any offer can be on less favourable terms.

Who transfers?

TUPE says that employees who are “assigned” to the business or the grouping that is being transferred will transfer to the new employer. Determining exactly who is assigned either to part or the whole of the business is not always straight forward, particularly where employees have split duties and responsibilities. There are no hard and fast rules for selection under TUPE.

In some cases, employees will perform duties in the business that is being retained and in the business being transferred, so it is important that decisions about who is selected to transfer are not made by the employer in isolation but in consultation with union reps and with the employee themselves. The courts and tribunal shave adopted a practical approach, by asking whether the employee was actually working for the part of the business that transferred.

The following factors will also be relevant:

• how much time the employee spent in various parts of the business
• the terms of the employee’s contract
• how the business had allocated the cost of the employee’s service in the company accounts

How do the TUPE Regulations affect employees?

Continuity of employment

When there is a TUPE transfer, transferred employees automatically become the employees of the new employer on the same terms and conditions of employment, as though their contracts had originally been made with the new employer. The employee’s continuity of service will be protected, so an employee who has worked for the original employer for 12 years will still have 12years’ service when the new employer takes over. Also, any statutory employment rights that have accrued while working for the original employer will be protected. For example, a woman who is entitled to statutory maternity pay from her original employer will be able to claim the payment from her new employer after the transfer. The new employer cannot pick and choose which employees to take on. They inherit the contracts of employment for all employees falling within the “organised grouping” that transfers. The new employer will also inherit the liabilities of the original employer, including any outstanding claims that the employees may be pursuing to a tribunal or court.

Protection of terms and conditions

Employees who transfer to the new employer retain (almost) all of the rights and obligations that exist under their contracts with the original employer; those rights and obligations transfer to the new employer .A transferring employee will retain the right to accrued holiday, contractual pay increments and shift allowances, as well as their statutory rights such as a right to receive statutory maternity or paternity pay and the right to be accompanied by a union rep at disciplinary and grievance meetings.

Pensions

The main exception to the rule is occupational pension rights. Although occupational pension rights and benefits accrued before the transfer are protected, occupational pension rights generally do not transfer under TUPE. The new employer is not obliged to continue the original employer’s pension arrangements or offer an identical scheme. However, the new employer must offer one of the following for employees who were members of or eligible to be members of the original employer’s occupational pension scheme. Transferring employees must be able to join one of the following:

• a defined benefit scheme providing a specified level of pension that meets minimum quality standards
• a defined contribution (money purchase) scheme where employer contributions match the transferring employee’s contributions, up to a maximum of 6 per cent of pensionable pay; or
• if the transferor was required to make pension contributions solely in order to meet its pensions auto-enrolment obligations, by a defined contribution scheme where the transferee at least matches the transferor's contributions immediately before the transfer.

There is more information about how TUPE transfers affect pensions and about pensions auto-enrolment on the website of the Pensions Advisory Service which operates a specialist helpline providing free advice. The impact of TUPE on pensions is not straightforward, so speak to the pensions expert at your union and/or contact the Pensions Advisory Service as soon as possible if you are concerned. Even though occupational pension rights do not transfer, some important rights relating to pensions do transfer, as follows:

• early retirement rights do transfer, as long as they are not linked to ill-health – for example, rights to accelerated pension benefits on redundancy transfer
• contractual promises to make payments each month into a stakeholder, personal or group personal pension scheme do transfer – for example, an employer’s contractual promise to contribute a fixed percentage of your wages into a pension scheme run by an external provider will transfer and must be honoured by the new employer.

Early retirement rights linked to injury or ill-health do not transfer. Even though occupational pension rights do not transfer, the employer still owes a statutory duty under TUPE to consult over any planned changes to those rights, such as to pension contribution rates. Anyone who is already drawing their pension before a TUPE transfer should be wholly unaffected by the transfer.

Public sector employees’ pensions

In the public sector, pensions are subject to a non-statutory code known as Fair Deal for Pensions. Fair Deal sets out how pension issues are to be dealt with when public sector employees are compulsorily transferred to the private sector (public service outsourcing). As a result of changes negotiated in 2013 (called New Fair Deal), staff who are compulsorily transferred from the public to the private or voluntary sector must be offered continued access to their existing public service pension scheme, instead of a “broadly comparable” private pension scheme. The same applies to any later compulsory transfers to a different service provider (so-called “second generation” transfers). New Fair Deal applies to central government, agencies and the NHS. It also applies to maintained schools (unless covered by other local government arrangements), academies and any other parts of the public sector under ministerial control whose staff qualify for membership of a public service pension scheme. New Fair Deal does not apply yet to local authorities. Instead, they remain subject to the Best Value Authorities Staff Transfers (Pensions) Direction 2007 and the Welsh Authorities Staff Transfers (Pensions) Direction 2012 in Wales. Transferees on a TUPE transfer of local government employees must provide access to a “broadly comparable” private pension scheme. Many public sector occupational pension schemes include additional rights for employees made redundant. TUPE protects an employee’s right to redundancy compensation even if those rights are contained in the pension scheme.

Do collective agreements transfer?

Collective agreements and collectively agreed terms that apply immediately before the transfer and that cover the transferring employees will transfer to the new employer.

Does union recognition transfer?

Where a union has statutory recognition or has voluntary recognition with an employer that covers some or all of the transferring employees, then the new employer will be required to recognise the union (or unions) to the same extent as did the original employer. However, recognition will be retained only where ‘organised grouping’ of transferred employees maintains its identity after the transfer and remains distinct from the rest of the new employer’s business. Recognition will be lost if the new employer reorganises the transferred workforce and integrates them into the organisation.

The new employer may also decide to derecognise the union. Where the union has voluntary recognition, the employer should follow any de-recognition procedure contained in the collective agreement, for example by giving notice. Where the union has statutory recognition, the employer can seek de- recognition only via the Central Arbitration Committee (CAC). An application can be made to the CAC only where the union has been recognised for a minimum of three years. It is likely that the CAC will require a ballot to be undertaken for de-recognition (see the CAC website for more details).

Changing terms and conditions

One of the main aims of the TUPE Regulations is to protect the terms and conditions of transferred staff. The Regulations restrict the circumstances in which employers can vary the terms and conditions of employment. Since 2014, the rules are different depending on whether the term the employer wants to change is “incorporated from a collective agreement”.

Making changes to individual contract terms

In general, a change to a contract term in an individual employment contract (for example, a cut to pay rates) will be void if the sole or main reason for the change is the transfer, unless it is a valid economic, technical or organisational reason entailing changes to the number, functions or location of the workforce.

For example, simply cutting the pay of the transferred employees to bring it into line with the wages of the new employer’s workforce (known as pay harmonisation) is void and a breach of TUPE. Although the employer has an economic reason for making the change (saving money), that reason does not entail changes to the number, functions or location of the workforce. Instead, these all stay the same. The new employer just wants to pay the transferring employees less. This is unlawful. By contrast, where the new employer makes fundamental changes to job roles after a transfer (for example, because the new employer uses different production technologies) this can provide an organisational reason that does entail a change to workforce functions (different job roles). Cutting pay because someone’s job role after the transfer has fundamentally changed is unlikely to infringe TUPE.

Crucially, even if the employer can change contract terms without infringing TUPE, any such change must still be by agreement with employees, just like any other change to the employment contract. This is very important. Where a union is recognised, changes to the employment contract after a TUPE transfer should be negotiated and agreed with the union. Employers may be able to rely on a flexibility term in the employment contract to make changes without infringing TUPE. (This is a contract term that allows the employer to make future changes to contract terms without employees’ agreement.) Flexibility terms should always be resisted by unions.

Making changes to collective terms

Making changes to collective terms (that is, contract terms that are incorporated from a collective agreement) became easier for employers as a result of changes to TUPE made in January 2014.

Since January 2014, changes to contract terms incorporated from a collective agreement will no longer infringe TUPE provided:

• any change takes effect more than one year after the transfer date (it can be negotiated during the year); and
• the contract terms “when considered together” are “no less favourable” than those in place immediately before the transfer.

This does not mean that an employer has a free hand to change collectively agreed terms after a year. Any change must be by agreement. Where a union is recognised, that agreement must be reached through collective bargaining. At the same time, a second damaging change to the law altered the legal effect of contract terms that are agreed through national, sector or industry-level collective bargaining. In summary, the changes to TUPE made in 2014 have denied transferred workers the benefit of any improvements to contract terms, such as pay increases, that are negotiated at national, sector or industry-level after the transfer date, unless the new employer agrees to be a party to the collective bargaining machinery and to be bound by the new pay rates.

Instead, the employees’ contract terms remain frozen as at the date of transfer until they are changed by negotiation with the new employer. If that new employer succeeds in derecognising the union after the transfer, the danger is that pay cuts will be imposed top down on the transferred workforce, on a take-it-or-leave-it basis. Denying transferred employees the benefit of sector-level collective bargaining has led to steep declines in pay and conditions for thousands of low-paid employees outsourced to the private sector.

How long after a transfer must an employer wait before changing terms and conditions? Where contract terms are governed by a collective agreement, the new employer may be able to change these terms one year after the transfer date. Any changes must be by agreement and must be no worse overall than their existing terms. For other kinds of terms, in theory there is no time limit to the protection TUPE provides. Cutting terms simply to bring them down to the level of the rest of the workforce (so-called ‘harmonisation’) is never allowed, no matter how much time has passed. In practice, the more time that passes, the easier it becomes for the employer to provide a reason for cutting terms and conditions that is unrelated to the transfer and so not barred by TUPE, such as an economic downturn, change in the way the job is done, loss of a key customer and so on.

TUPE and dismissal protections

In order to claim unfair dismissal under the TUPE Regulations, employees must have at least 24 months’ continuous service. Where an employee is dismissed before or after a TUPE transfer by either the original or the new employer, the dismissal will automatically be unfair if the sole or principal reason for it is the transfer and the employer cannot point to a valid economic, technical or organisational (ETO) reason (such as redundancy) to justify the dismissal.

Dismissals before the transfer because the new employer refuses to accept some or all of the transferring workforce will automatically unfair.

Role of the rep: Transfers Consultation prior to transfers During the consultation process, union reps should request a copy of information supplied by the new employer to the original employer, in particular about proposals for restructuring or changes to terms and conditions. Union reps should request to see and agree the schedule of information the original employer plans to give the new employer: to ensure that the information is accurate to ensure that all liabilities, including all terms and conditions of employment, collective agreements, rights to trade union facilities and any outstanding employment tribunal and court claims are fully reported. This information can be used as the basis of future discussions and negotiations with the new employer. Union reps should seek advice from union legal officers where they suspect original employers have not fully complied with their information and consultation duties with a view to applying for protective awards for members. When an outsourced service contract is up for renewal or re-tender, reps should try to make early contact with the commissioning client, for example the local authority, to discuss the transfer, including the possibility of an in-house bid. Maintaining union recognition and organisation While union recognition and agreements relating to paid time for union reps transfer, new employers may seek to de recognise the union following the transfer in order to make it easier to cut terms and conditions of employment. This may include restructuring transferred staff so as to break up the bargaining unit. It is therefore very important for unions to maintain strong organisation within the workplace where staff are transferred. This might include: Considering reallocating union resources and adjusting branch structures to ensure transferred staff receive effective representation. Seeking early discussions with the new employer with a view to establishing a good working relationship and to entering into regular negotiations. Working with other unions that may already have recognition or represent members in the workforce. Where the new employer threatens derecognition, considering whether the union would be able to make an application for statutory recognition via the CAC. The union will need: at least 10 per cent membership in the relevant bargaining unit to be able to convince the CAC that a majority of the bargaining unit supports union recognition to be able to win a ballot for recognition, i.e. more than 50 per cent of the worker in the relevant bargaining unit, plus 40 per cent of those entitled to vote must vote for recognition. If the new employer threatens de-recognition, union reps might seek agreement from the employer that Acas should conduct a ballot to test levels of support for recognition, as a means of avoiding the need to use the CAC process. Union reps will want to be confident of winning such a ballot before making the proposal. Protecting individual members’ terms and conditions Before the transfer, consult members about the groups of workers that are likely to be transferred. Where an  individual indicates that they would not be willing to move to the new employer, advise them of their rights and where possible, seek to negotiate on-going employment with the original employer. Seek advice from a full-time union officer, as TUPE law on how to protect your rights while staying with your original employer is not straightforward. After a transfer, check transferred staff continue to receive all previous terms and conditions of employment Where the original or new employer attempts to weaken terms and conditions of employment, raise individual or collective grievances. Where the original employer attempts to lay staff off before a transfer, seek legal advice on whether they have a claim for unfair dismissal. Advise members not to sign any agreement that seeks to vary terms and conditions of employment without first consulting their union rep Remember that in order to vary terms and conditions of employment for economic, technical or organisational reasons, the new employer must also be proposing changes to the workforce and reach a collective agreement with the union or the written consent of all individual employees.

Resignation after a transfer

Where a transfer results in a substantial worsening of conditions, it is theoretically possible to resign and bring an employment tribunal claim under TUPE. In reality, this kind of claim is fraught with problems. The member loses their job, with no certainty that the tribunal will agree with their assessment of the situation – and the employer may be able to defeat the claim by pointing to a valid ETO reason for the changes they have made.

Similarly it may be theoretically possible for a member to resign and claim constructive dismissal. Again, there are serious barriers in the way of a successful claim, and any compensation – even if the claim succeeds – is likely to be disappointing.

Union reps should seek advice from a full-time union officer before advising members to take such an important decision.

Information and consultation rights under TUP

 Under the TUPE Regulations, the original employer is obliged to inform and consult the appropriate reps of employees affected by the transfer. In workplaces where a union is recognised, the employer must inform and consult the relevant unions. Where there is no union recognition, the employer must inform worker reps who have been elected or appointed by the affected employees (for example reps of an existing employee or staff forum).

Information rights

The original employer must inform the reps of the following: the fact that the transfer is to take place, the (proposed) date and the reason for the transfer

• the implications of the transfer for the affected employees, for example who will be the new employer, the effect of the transfer on terms and conditions
• any ‘measures’ that either the original or the new employer proposes to take that may affect the transferring employees (or, if no measures will be taken, confirmation of that fact)
• the number of agency workers, what they are doing and where they are working.

The employer should provide reps with this information long enough before the transfer as will enable the employer to carry out a full consultation and, where appropriate, negotiation with the union. It is also good practice for union reps to be provided with copies of any information provided to the original employer by the new employer. Union reps should also be provided with facilities and access to the affected employees throughout the consultation process.

Consultation rights

The original employer should also consult union reps with a view to reaching agreement on any proposed measures in connection with the transfer that the original employer envisages taking in relation to the affected employees (or where the employer is informed by the new employer of its intention to take measures). Planned redundancies is one example of a ‘measure’. There will therefore be a duty to consult where the new employer intends to, for example, change terms and conditions of employment or make redundancies following the transfer or to restructure the workforce. Where there is a failure to inform and consult with union reps, the recognised union can lodge a claim in an employment tribunal for a protective award of up to 13 weeks for each of the employees affected (90 days’ pay in respect of redundancies). Case law indicates that the new employer is not obliged to consult with the transferred employees after the transfer.

Pre-transfer redundancy consultation

Since 2014, the law has allowed prospective new employers to consult with the transferring workforce (with the consent of the existing employer) before the transfer – over redundancies planned for after the transfer date – and for this consultation to count towards the minimum 30/45 days of collective consultation that must precede collective redundancies. Union reps who are faced with this situation should speak urgently to a full-time union officer. Employers should be reminded that the law requires redundancy consultation to be ‘meaningful’ (that is, genuine and thorough). A failure to carry out meaningful consultation with a recognised union will leave them exposed to a large protective award. It is also worth remembering that under section 145B of the Trade Union and Labour Relations Consolidation Act 1992, union members have a legal right not to be made offers that are intended to end collective bargaining of their contract terms by their union. Any incoming employer under a TUPE transfer that offers new terms to a transferring workforce without engaging with their recognised union risks multiple tribunal claims for compensation that can add up to very large sums indeed.

TUPE and an insolvent employer

The TUPE Regulations also allow greater scope for both employers to reach agreements to vary the employees’ terms and conditions. The aim is to facilitate and encourage business ‘rescues’, and the affected employees will be protected from redundancy. Terms and conditions can be varied either before the transfer in order to make the business more attractive to a purchaser or by the new employer after the transfer. Note that any intention to change terms and conditions after the transfer should be made known to the original employer beforehand (to enable the original employer to consult with union or other employee reps about ‘measures’). Whether or not employees transfer to the new employer under TUPE depends on the type of insolvency proceedings affecting the employer’s business. Where the original employer is subject to proceedings that have not been started in order to liquidate the assets of the business, the employees will transfer automatically to the new employer in the normal way. Where there is no hope of the business carrying on, proceedings for bankruptcy or ‘any similar insolvency proceedings [that] have been instituted with a view to the liquidation’ of its assets, the employees will not automatically transfer to the new employer and any transfer-related dismissals will not be automatically unfair’. However, such dismissals are likely to be for redundancy and employees may be entitled to a statutory redundancy payment. Where businesses are insolvent, statutory redundancy payments are paid by the Insolvency Service Redundancy Payments Office.

More information

Acas

Central Arbitration Committee (CAC)
Email: enquiries@cac.gov.uk
The UK organisation that deals with trade union recognition.

Department for Work and Pensions

Employment Appeal Tribunal (EAT)
The court which deals with appeals from the decisions of the employment tribunals and Certification Officer.

Employment Tribunal Service
To obtain form RP1 if your company has gone out of business and cannot pay you.