Tribunals to give Tupe guidance on transfers

Employers will be given access to fast-track advice from tribunals on
whether Tupe applies to staff transfers, under far-reaching proposals due later
this year.

The DTI is set to issue a consultation paper on Tupe over the summer which
many expect will widen its scope.

The paper will include a proposal to allow employers to be given direction
by tribunals about whether a transfer would be covered by the directive ahead
of the transaction being completed. This could create demands for such
directions to be legally binding.

The Government will also propose that Tupe applies to pension rights for the
first time, although a flexible approach is being taken. Firms will only be
required to provide "broadly comparable" rather than
"mirror-image" benefits. Employers may be allowed to make a cash
payment in lieu of pension benefits.

The broad thrust of the paper is also expected to widen the application of
Tupe. One source said it would apply "in almost all transfer cases."

John Twitchen, policy executive at the Environmental Services Association, a
founder member of the Tupe Forum, said, "For some of the smaller companies
dealing with local authorities it will be difficult because local authorities
provide very good pensions."

He added that fast-track rulings would be welcome in setting out ground
rules for employers, but that they are waiting for the consultation document to
find out how it will work.

John McMullen, head of employment law at Pinsent Curtis, said the DTI was
trying to achieve consensus and the extension of the scope of Tupe would make
the law more clear.

He added extra costs resulting from applying Tupe to pensions might not act
as an impediment to transfers as they might be passed on to customers.

By Tom Powdrill

www.dti.gov.uk

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