Collective agreements TUPE transfers: Understanding the impact on your business
If your business is undergoing a transfer of undertakings, it’s important to understand the implications of collective agreements on your employees. When a TUPE transfer occurs, the new employer is legally obliged to honour the terms and conditions of the employees’ existing contracts. This includes any collective agreements that have been negotiated by unions or employee representatives.
What are collective agreements?
Collective agreements are legally binding agreements between employers and employee representatives, usually trade unions. These agreements outline the terms and conditions of employment, such as wages, hours of work, and holiday entitlements. Collective agreements can be company-wide or industry-specific, and are a way for employers to negotiate with their workforce as a whole, rather than individuals.
How do collective agreements impact TUPE transfers?
When a TUPE transfer occurs, the new employer takes over the existing contracts of the employees transferring to their business. This means that any collective agreements in place at the time of the transfer will also be transferred to the new employer. The new employer will be bound by the terms of the collective agreements until they expire, unless they are renegotiated with the employee representatives.
It’s important for the new employer to understand the terms of any collective agreements that have been transferred to their business, as failure to comply with these agreements can result in legal action. This could lead to costly compensation claims, as well as damage to the reputation of the business.
What should employers do?
Employers should carry out due diligence to ensure they are fully aware of the terms of the employees’ existing contracts, including any collective agreements. This will help them to understand the scope of their obligations under the TUPE regulations. Employers should also engage with employee representatives to ensure a smooth transfer process, and to discuss any potential changes to the terms and conditions of employment.
It’s important for employers to be transparent and open about any changes that are proposed, and to provide employees with adequate time to consider them before making a decision. This will help to build trust and goodwill with the workforce, and can also help to minimise the risk of legal action.
Conclusion
Collective agreements are an important part of employment law, and can have a significant impact on TUPE transfers. Employers should familiarise themselves with the terms of any collective agreements that have been transferred to their business, as failure to comply with these agreements can lead to legal action. By engaging with employee representatives and being transparent about any proposed changes to terms and conditions, employers can ensure a smooth transfer process and build trust with their workforce.