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The European Review has commented in many past issues about the vexed question of the Transfer of Undertakings (Protection of Employment) regulations as they are known in Great Britain or the Acquired Rights Directive, the European Union measure which they are supposed to implement. Now the British government is once more trying to clarify the mess, partly caused by ECJ decisions, into which they have got themselves. So come with us again as we tiptoe through the TUPE.
Originally passed in 1981 the TUPE regulations were often used when a public sector body was privatised to determine the status of workers transferred to the new enterprise. Supposedly based on EU legislation, trade unions ran into all kinds of problems when they attempted to use them to protect employees' terms and conditions. Revised in 1995, the UK regulations were still not thought to fully implement the directive, a view shared by the incoming Labour government which produced amendments in 1999 following the passing of another directive on Collective Redundancies by the EU. Whilst the amendments were useful in dealing with issues such as what to do if no union was recognised in a firm transferring workers and on paid time off for training of employees in consultations with employers, a full-scale reform was not attempted.
Further developments since 1999 have included several cases brought before the European Court of Justice which swung violently in their interpretation of the relevant EU directives. To take one example: a ruling had previously been established by Employment Appeal Tribunals in the U.K. that even if no staff or physical assets were being transferred TUPE still applied if the contract was passed on. However in a case ruling given by the ECJ earlier this year (see issue 15) two Finnish bus drivers were excluded from the Acquired Rights directive, even though they had been engaged by the company taking over a contract to run a Helsinki council bus route, because the new firm had used different buses.
Once again the British government are attempting to clear things up. They have initiated a consultation period, announced at the Trade Union Congress in September. They state that the object of it is to balance 'flexibility for business with fairness for employees' and to give 'assurance to and secure the commitment of employees' affected by change. The proposed new amendments would also seek to widen the definition of those changes to which TUPE would apply to whenever there is a 'service provision change'. It is thought that this would cover any kind of contracting out, subsequent re-tendering and work moving back to 'in-house'.
The Government is also considering how best to protect pensions rights which workers may have in their existing contract but which may not be honoured by the new employer. Their consultation document falls short of guaranteeing the automatic transfer of pensions from old to new employer but does seek to ensure that redundancy payment rights are protected even, as has happened in recent cases, they are seen as part of pension provision. This and other features of the consultation document have been generally welcomed but it remains to be seen if unions and others can remedy its weaknesses during the consultation period.
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The government consultation document can be viewed and downloaded at: |
We start with a case from a UK employment tribunal but instead of a referral to the ECJ, in this instance the UK decision has helped to clarify a European Directive. The Posted Workers Directive was designed to ensure that employees who were sent by a company in one Member State to work in another would receive the benefits of the host country's labour legislation. Topics covered included working hours, holidays, minimum rates of pay, health and safety and, most germane to this case, protective measures with regard to the terms and conditions of employment of pregnant women.
Four female flight attendants had been recruited in the USA under American contracts although they worked from Heathrow airport and lived in London. When they became pregnant they refused, on medical advice, to fly on long haul flights. The company claimed that this was permissible under American law but the women argued that they came under UK law and had therefore been sexually discriminated against. The tribunal found in their favour thus extending the directive to workers posted from anywhere in the world to the EU.
Two recent cases from the ECJ have cleared the air with regard to temporary, or fixed term workers, and their rights under the Pregnant Workers Directive. In Denmark, a Ms. Brandt-Nielsen was employed by Tele-Danmark on a six month contract and after two months informed her employer that she was pregnant. She was dismissed on the grounds that she had not told them at the time of recruitment. In Spain Maria Luisa Jiménez Melgar held that she had been unfairly dismissed by a town council because a series of fixed term contracts had not been renewed when the employer found out that she was pregnant. The employer contended that it was not clear that she had been dismissed due to her pregnancy as another contract, for a different post, had been offered to her.
In the first case the company was ruled to have acted unlawfully as any dismissal of an employee due to pregnancy is direct sex discrimination under EU legislation. In the second case, although the non-renewal of a fixed term contract could not be seen as dismissal, the court found that non-renewal due to pregnancy still constituted illegal discrimination.
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