Workforce reorganisation before a transfer 




Employers often use the run up to a transfer date to reorganise the workforce, making sure particular employees are (or are not) included in the group of employees who transfer.




Sometimes this is done to enable employees to remain with their existing employer after the transfer date. The BEIS TUPE guidance 2014 says: TUPE “does not prevent the transferor from retaining those individuals whom they had permanently reassigned to other work outside the organised grouping in advance of a transfer”. 




Regulation 4 of TUPE operates automatically on the transfer date to transfer the employment contract of any employee who remains inside the organised grouping on that date (Royal Mail Group Limited v CWU [2009] EWCA Civ 1045). To stay with their existing employer, the employee will need to agree with the employer a clear change to their contractual role before the transfer date that clearly and permanently removes them from the organised group of transferring employees. Alternatively, the employee can object before the transfer, but objecting to a transfer carries significant risks, as explained on page 427.




Employees must be informed and consulted in good time about any planned pre-transfer reorganisation. Where there is a recognised union, consultation must be with the union. The duty to consult under TUPE is explained on page 431.




One mechanism used successfully in the past in the NHS, local government, and the education sector to enable employees to remain employed by their existing employer on their existing contract terms (including pensions) even though they work for a different organisation after the transfer date, has been the Retention of Employment Model (ROEM), developed in response to campaigning by UNISON to preserve NHS staff terms and conditions.


This approach requires joint cooperation, high levels of trust between employer and union, and careful legal advice. Every step must be followed strictly to avoid employment being transferred automatically to a new employer by operation of law, and to avoid risks to employees’ contract terms. The ROEM model involves these basic steps:


• the parties follow all normal steps in relation to a TUPE transfer, including as to information and consultation;


• a transfer date is decided on;


• immediately before the transfer, the employees formally “object” to the transfer (see page 427);


• immediately after objecting, the employees sign new contracts with the transferor replicating their pre-objection terms and conditions, including as to pension, but containing a “secondment” clause;


• employees are seconded to work for the new service provider, but they retain the benefit of the terms and conditions they enjoyed before objecting to the transfer, with their continuity of employment preserved.


There is more detailed information about the ROEM in Appendix 3 of the UNISON TUPE branch guidance, updated in April 2014 and available from the union’s website.


Simply leaving staff in role at the transfer date but assigning them to work for the transferee on a straightforward “secondment” model will not prevent their employment transferring to the transferee automatically on the transfer date. This is regardless of the parties’ intentions, and can even happen without their knowledge, as the House of Lords (now the Supreme Court) ruled in this leading case:




Here is another example:



Where an employer fails to appreciate that a transfer has taken place until it is too late, they can be liable for a significant protective award for failure to inform and/or consult properly about the transfer (see page 434).