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Bargaining power

Is it better to ignore “add-ons” and hope they somehow wither on the vine, or should employers look at how best to capitalise on these new consultation processes for the benefit of their business.


The 2014 changes to the treatment of collective agreements in a TUPE transfer situation mean that it’s more important than ever to ensure that employers understand, support and make the most out of existing employee bargaining units. So what exactly is a bargaining unit? For the purposes of UK employment relations, a ‘bargaining unit' refers to a group, or a number of groups, of workers covered by a recognition agreement such as through a recognised trade union or employee forum. It’s always been beneficial for employers and employees to work together efficiently with good communication and working practices, especially where these relate to employee terms and conditions. One of the main avenues available for this is through collective consultation, with recognised and established employee bargaining units. This is of particular value, if the structure and practice has been

Where a bargaining unit transfers, it can be forgotten that along with individual terms and conditions, some TUPE transfers may result in the transfer of an existing recognised bargaining unit. This applies if the business unit retains its identity distinct from the rest of the transferor's organisation. This may be unfamiliar territory for the employer, but making use of this forum presents a new opportunity to improve their staff engagement. Where no bargaining unit transfers, there may, on occasion, be no existing bargaining unit. This may have arisen due to no previous perceived need for collective representation, or because the transferring group does not maintain an identity distinct from the remainder of the incoming employer's workforce. This could mean that the recognition process needs to begin again. Employers can benefit from actively encouraging the establishment of such collective recognition arrangements, especially as there are often situations where representation is a legal necessity and a proactive approach will mean later, time-consuming setups may be unnecessary. If a transfer means that the recognition agreement, and therefore any collective bargaining arrangement, comes to an end, the new employer may find it surprising just how quickly they will need to set up an arrangement again.

For example; shortly after a TUPE transfer takes place, a large financial services employer secures a major new contract that does not involve the transfer of any further staff, and is completely unrelated to the original transfer. This means a new national management structure is required as soon as possible, and the recently transferred employees are among those who need to be consulted. A major update to the software used by an accountancy company specialising in the outsourcing of payroll systems means that many elements of the system are far less staff-intensive and there is now little need for work outside of core operational hours. Although the recent merging of a smaller company with the employer has brought in new teams, the software changes that affect them have nothing to do with the transfer itself. Nevertheless, they will need consulting over the change.

A charity who provide a mixture of advocacy and advisory services for vulnerable people recently received a number of council employees in a TUPE transfer and has received an unrelated, abrupt cut to their overall funding. They can afford to retain all their staff, but only if they agree a variation to employee contracts to move to advisory-only work. All staff are affected and will need consulting. Establishing productive relationships and processes with a recognised bargaining unit early will often be a vital part of these types of situations, as collective consultation requirements can be required in not only TUPE transfer situations, but also collective redundancy situations, variation of contract situations and for the purposes of the information and consultation of employees regulations 2004.

The very nature of TUPE transfers mean that a workforce is likely to encounter or perceive considerable upheaval even where the incoming employer aspires to retain existing business practices. So, making the most out of an existing bargaining unit not only assists employers in meeting their legal obligations and finding agreeable business solutions, it can also provide some familiarity and consistency for everyone in a time of change. This is compounded by the fact that there have been a number of changes to TUPE Regulations. While these are small, many have potentially significant impacts so the value of the bargaining unit increases. The bargaining unit, especially when it is represented by a recognised trade union, provides a golden opportunity for an employer to communicate and discuss any of these changes they or the representatives feel are relevant to the transfer in hand. Ideally, this will result in an agreed understanding of any changes, but even if this isn’t possible, it will provide the employer with advanced notice of any possible disputes at an early stage, where a quick response or legal opinion could resolve matters before positions become entrenched.

Some of the TUPE changes specifically alter the provisions around collective agreements themselves. Regulation 6 of the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014,allows for terms and conditions from collective agreements to be renegotiated after one year, provided that overall the contract is no less favourable to the employee. This change requires the representatives of the bargaining unit and the employer to negotiate and agree on any new terms and conditions. Importantly, this change is not one that can simply be taken advantage of by talking to/consulting with the bargaining unit, where employers are required to listen to the representatives and seriously consider their suggestions, but ultimately make the decisions themselves.

On the one hand, the chances of agreeing such a change with a bargaining unit that is underused, inexperienced or overlooked, are reduced. The process is likely to be an uphill struggle with the chance of procedural difficulties that could delay, hinder or prevent agreement. On the other hand, a bargaining unit that has enjoyed frequent engagement and feels valued is likely to be more open to such a renegotiation. The subtle but considerable requirement for the terms and conditions to be no less favourable to the employee, offers some reassurance that the renegotiation is not intended to achieve an advantage to the employer at the expense of the workforce.

Regulation 7 clarifies that contractual changes,agreed between the union and the outgoing employer after the transfer, do not apply where the incoming employer is not able to participate in the negotiations, because they are not party to the agreement. A superficial look at this provision may tempt employers to think that the bargaining unit concerned is likely to ‘miss out’ on the ability to secure improved terms and conditions as a result. However, the reality of the matter is that whilst this change guarantees the ability for the incoming employer to be involved in any agreements which affect their workforce, it also means that working closely with a bargaining unit is once again likely to become more necessary and beneficial. Terms and conditions that could have been previously revised under the collective arrangements with the outgoing employer may well need to change anyway, and now, to do that, the incoming employer needs to engage with the bargaining unit fully. Finally, one change that is not specifically linked to collective agreements is that Employer Liability Information (ELI), is now required to be shared at an earlier stage. This may mean employers have information indicating a need for collective bargaining earlier than was previously the case – so having a bargaining unit readily available will allow this to be used to everyone’s advantage. Whilst manageable, these and the other 2014 changes to the TUPE regulations are new and it can take time for procedures to be bedded in using these rules. Keeping fully engaged with the appropriate bargaining units, be they trade union or workplace representatives, will help ensure that any changes resulting from the new rules can be communicated through a familiar channel, which can in turn be used to ensure that both sides understand the reason for any changes.

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