The TUPE regulations are causing confusion for many organisations. sara bean
examines how one company promotes best practice during transfers
The Transfer of Undertakings (Protection of Employment) Regulations 1981 is
a notoriously complex piece of legislation, demonstrated by the reams of case
law emanating from the higher courts, the Employment Appeal Tribunal and the
European Court of Justice.
Designed to protect the rights of staff – when the business in which they
are employed is transferred to another employer, or when part of a business is
‘contracted out’ to a service provider – the law has become so confusing that
it is often virtually impossible for a company to be sure if it applies in a
given situation. Change in this area is imminent, with the Government vowing to
make matters simpler for employers, but there is still doubt as to whether the
amendments will really deliver the changes needed.
One company routinely involved in managing outsourcing agreements, involving
the transfer of hundreds of people within different sites, is logistics company
Wincanton. It has devised a comprehensive strategy to help negotiate this very
difficult area of employment law and promote best practice.
Wincanton employs about 16,000 people across 160 locations, with services
that include supply chain systems, warehousing and fleet management. Its
clients come from a range of market sectors, including general retail, grocery
retail, food services, oil and petroleum and consumer goods.
The nature of its business means Wincanton has been involved in TUPE
transfers for many years. However, it is during the past 10 years or so that
TUPE has really come to the fore says Peter Nicol, personnel director, Consumer
Logistics Business, Wincanton’s consumer division.
"TUPE is driven so much by case law, it’s just not a black and white
subject," explains Nicol. "The problem is it’s so confusing and often
seems to be based on the latest decision in the European courts."
Nicol says his initial strategy is to first concentrate on the terms and
conditions that apply to the staff being transferred and then find ways to
harmonise these with those of Wincanton. But to do so within the terms of TUPE
requires extensive organisation.
As a change development manager at Wincanton, Kirstie Seddon has been
involved in many of its recent transfers, including a number of the high street
grocery retailers and food services providers.
She says: "Usually the timescales with TUPE are very short, with a
six-week period from the announcement to going live.
"During that time, the organisation must undertake careful due
diligence to identify all the transferring obligations and establish best
practice by consulting and informing those involved in the transfer. We take a
structured approach to the process – with HR ensuring that all personnel files,
union agreements and any other relevant documentation is thoroughly read and
The due diligence study is carried out using a very structured method, and a
multi-skilled team of Wincanton managers, drawn not just from HR but from a
variety of areas, including transport operations, fleet services management,
warehouse operations, stock control and businesses development.
Prior to its managers arriving, Wincanton ensures an announcement is made
about the transfer to the staff concerned and that they are consulted about the
changes that are to take place.
This not only helps to ‘lay the foundations for an open and trusting
culture’, but also ensures the company adheres to one of the key aspects of TUPE
– that staff are kept informed and consulted about the transfer.
The ‘due diligence’ process includes double checking when and if TUPE is
applicable. At one site takeover, for example,Wincanton had to determine
whether private health insurance benefit formed part of the employee contract
on transfer, despite the fact that eligibility was restricted solely to those
employees in the pension scheme (which did not transfer under TUPE). Wincanton
always keeps in close touch with its legal advisers to ensure any potential
issues like this are satisfactorily resolved prior to transfer.
While the terms and conditions of the incumbent employees are written, the
customs and practices or ‘culture’ of the site in which they work are not, and
it is here that changes may need to be made.
Wincanton has handled a variety of transfers, ranging from about 130 people
to more than 800, and sites that have been reasonably well maintained to those
with a history of poor management. The challenge is to redress any residual
problems, while keeping disruption to a minimum, because the client who has
awarded the contract to Wincanton not only expects service to be maintained
but, in many cases, is expecting improvements.
After the official transfer has been completed, a team of managers from
Wincanton with specific operational and functional responsibilities is seconded
to support the existing management structure, to help drive through the
cultural and organisational changes. These typically include:
– An assistant general manager
– Operations managers to cover the warehousing operation
– A regional personnel manager to support the need for any potential
industrial relations changes
– An accountant to audit accounts and assist the management in strategic
– A communications officer to review site communications and keep staff and
– A transport manager to work on best practice and assist in devising a
future transport strategy
– A project co-ordination manager to assist the team in constructing
individual action plans and integrate them into the master action plan
The existing site managers are introduced to the seconded team in small
groups to discuss how the two teams will interact in a less formal manner, and hopefully
to help reassure managers who are worried about the takeover implications.
"The quality of those who are seconded to the site is important,"
explains Seddon. "People are put in there to support, guide and coach the
existing managers. We might ask the question: has there been a lack of training
and direction before? And, will they be able to perform better once these
problems have been addressed?"
In order to ascertain the abilities of the incumbent management team, a
series of appraisals are arranged, which, says Seddon, "helps you get the
feel for the competencies of the team and what must be done for them. It also
helps determine if the right guidance will lead to you having a very good
manager. The key is to go in with an open mind."
However, in some cases, proactive steps such as improved training may be too
late. On one site with a history of weak management, a number of managers were
already absent on long-term sick leave due to stress, and no steps had been
taken to deal with the problem.
Not only must the incoming team handle this situation appropriately, they
must also have people ready to mobilise within the company if there is
substantial fallout in staffing levels.
This is particularly important in areas of high employment, where replacing
staff may be difficult.
Seddon says: "In this situation you have to be aware of the
sensitivities surrounding any possible recruitment needs and ensure that the
underlying principles of TUPE are not breached."
Wincanton has learned from experience with TUPE that communication is a
vital component in the change management process. In a recent TUPE transfer, a
communications helpdesk was set up from the day the transfer was announced to
the day it went live. This allowed people to talk to a Wincanton representative
about the implications of the transfer.
Questions ranged from whether the site football team would continue to how
pensions were affected by the change.
"We posted up every answer on a board dedicated to the transfer, and found
it helped much of the workforce put their minds to rest. Communications is
really all about gaining trust," says Seddon.
Once a site has been taken over and changes are in place, the ultimate aim
is to gradually withdraw the support team and allow the existing management to
take control and continue to drive change and grow a culture of continuous
improvement. The time it takes to fully migrate a site varies, depending on the
size and scale of the cultural differences, but the usual aim is to have a site
fully migrated within a year.
"No transfer is easy. Everyone goes through problems and there is an
element of thinking on your feet," explains Seddon.
"The key is to go in prepared, and give these sites some support, which
includes being able to move more people in to help handle any problems.
"We’ve learned through experience that we must also offer support
centrally, from within Wincanton. It’s important we get it right – after all,
there are not as many greenfield site opportunities left, so developing
brownfield sites is an important part of growing and developing our
business," she says.
The change cycle
Wincanton’s change management team
adheres to the ‘seven stages of change’ theory:
1. Shock: being made aware of the of
a mismatch between perceptions expectations and reality
2. Denial: believing change is not necessary
3. Awareness: understanding the changes that are necessary but
still not understanding how
4. Acceptance: accepting there is a need for change and room
5. Experimentation: testing new approaches and behaviour
6. Fuller understanding: understanding why some approaches and
behaviours work and others don’t, and realising the benefits of the change
7. Integration: incorporating new skills and behaviour into the
natural way of working