January 11, 2012

2012 Employment Law Update: Part 2

Welcome to part 2 of our 3-part overview of some very recent important cases and the key employment legislation coming into force throughout 2012, what it all means and how employers can deal with it effectively.

Part 2 focuses on the issues of Bulgarian and Romanian workers; status of Methodist ministers, and; TUPE.

Bulgarian and Romanian workers

Restrictions on the rights of Bulgarian and Romanian workers to work in the UK have been extended until 31 December 2013.

What does this mean?

Bulgarian and Romanian nationals have no automatic right to work in the UK despite their countries being members of the EU. Those seeking to work in the UK are in most cases required to apply, before commencing work, for an ‘accession worker authorisation document’ and to work in accordance with the conditions in that document.

What should employers do?

Employers who wish to employ Bulgarian and Romanian workers should continue to comply with requirements such as work permits and, if necessary, take legal advice before doing so.

Status of Methodist Ministers

The Court of Appeal has held that a Methodist Minister is an ‘employee’.

What does this mean?

Previously it has been difficult for Ministers of religion to convince the Courts that they are employed. That old presumption that they could not be employees because of the spiritual nature of their work has now gone and they will be free to argue that they have rights as employees, for example, by bringing claims for unfair dismissal. The decision applies to Ministers appointed by one or more congregations, but there must now be a risk that Ministers of religion of other denominations may also be found to be employees.

What should employers do?

Employers who employ other Ministers of religion should review their practices and policies in light of the risk that their Minsters may be able to enforce their rights as employees.

TUPE

The Court of Appeal has held that a transfer on an administration maybe caught by TUPE rules, unlike on insolvency proceedings.

What does this mean?

Businesses who purchase companies who have been placed into administration will generally take on the liability under TUPE for the company’s employees.

What should employers do?

Businesses who are considering purchasing a company in administration should be aware of their potential liabilities in relation to staff and take specific legal advice where necessary.

TUPE

The Employment Appeal Tribunal has held that for there to be a service provision change under Regulation 3(1)(b) of TUPE, the activities carried out by different providers before and after the transfer must be for the same client.

What does this mean?

There will be no service provision change where there is not only a change in contractors, but also a change of client.

What should employers do?

Businesses who are considering selling should be aware that a change of client may mean TUPE rules do not apply and take specific legal advice as to their liabilities where necessary.

TUPE

The Employment Appeal Tribunal has held that there can be no service provision change under TUPE where the activities carried out by the subsequent contractor for the client are not fundamentally the same as those carried out by the first contractor.

What does this mean?

There will only be a service provision change where the activities carried out by an organised grouping of employees remain fundamentally the same.

What should employers do?

Businesses should be aware that TUPE may not apply where any service provided after transfer is fundamentally different from the one provided before transfer. If in doubt, specific legal advice should be sought.

TUPE

The Court of Appeal has held that a transfer does not need to be in contemplation at the time that a dismissal is effected in order for the dismissal to be caught by Regulation 7(1) of TUPE.

What does this mean?

Dismissal of staff by an administrator in order to achieve a sale of a company at a future date is sufficient for TUPE to apply and such dismissals will be automatically unfair as they will be for a reason connected with the transfer.

What should employers do?

Businesses who are considering purchasing another business from an administrator should take specific legal advice as to their liabilities under TUPE and consider what indemnities to seek.

For further information or advice on any of the issues outlined in this e-Brief, please contact a member of the employment team.