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The Retention of Employment Model
[ch 3: pages 29-30]One mechanism that has been used in local government, the NHS and the education sector to enable employees to remain employed by their employer under their existing terms and conditions even though they work for a different organisation after the transfer date, is known as the Retention of Employment Model (ROEM). This approach requires joint cooperation and high levels of trust between employer and union, as well as careful documentation and legal advice. It is vital that every step is followed strictly to avoid employment being transferred automatically to a new employer by operation of the law. The ROEM model involves the following basic steps:
• the parties follow the normal steps in relation to a TUPE transfer, including as to information and consultation;
• a date is fixed for the TUPE transfer;
• immediately before the transfer, the employees formally object to the transfer;
• immediately after objection, the employees sign new contracts with the transferor containing a secondment clause.
Simply leaving staff in place at the transfer date but assigning them to work for the transferee on a straightforward secondment model will not prevent the employment transferring to the transferee automatically on the transfer date. This is because TUPE operates automatically to transfer the contract of employment of any employee within the organised grouping on the transfer date, unless they object before the transfer. This is regardless of the parties’ intentions and can sometimes even happen without their knowledge. For example:
In 1990, three civil servants were sent to work for the Training and Enterprise Council (TEC) on what they (and their civil service employer) understood to be a “secondment” arrangement. For three years, they believed they were still civil servants employed by the Department of Education. However, the House of Lords decided, following a European Court ruling, that their employment had in fact transferred automatically to the TEC in 1990, even though nobody appreciated this at the time.
North Wales Training and Enterprise Council Limited t/a Celtec v Astley [2006] UKHL 29
Here is another example:
Ms McLean worked as an occupational nurse for the BBC. When the BBC’s personnel department was outsourced to Capita, Ms McLean did not want to transfer, but she, the BBC and Capita agreed that she would be “seconded” to Capita for a six-week trial period during which she would be paid by the BBC. She handed in her resignation to the BBC on this basis and worked her six-week secondment with Capita. Throughout this period, the BBC paid her salary believing she was still their employee. At the end of the six-week secondment, she issued a claim for unfair dismissal against the BBC and Capita.
The claim against the BBC was dismissed because the EAT decided her employment transferred automatically to Capita on the transfer date. The EAT said: “She was, clearly, only prepared to work for them for a limited period of six weeks but that being so, she cannot, at the same time, insist that she objected. What her approach shows is that she was in fact agreeable to working for the second respondents, albeit only for a short period.” The fact that nobody realised that the employment had transferred did not stop McLean losing her right to object to the transfer.
Capita Health Solutions v BBC [2008] UKEAT34/07
An employer’s failure to recognise that TUPE has transferred the employment until after the transfer has taken place will normally mean a breach of the information and consultation provisions discussed in Chapter 4 and the potential for a significant financial penalty, to be awarded to affected employees.