Employees who TUPE from maintained schools to academies

Transcription

1 This document is a very basic outline of some of the legal risks and issues that schools wishing to convert to academies will have to consider. The areas of law involved are highly complex and this is by no means a definitive guide to all issues that may arise. Any school considering converting to an academy should consider obtaining independent legal advice. This document answers the following FAQs: Do existing staff of maintained schools TUPE to new academies? What exactly will the academy inherit in relation to the transferring staff? Will academies be bound by subsequent pay increases reached under collective agreements such as the Teachers Pay and Conditions and the Green Book? Will new starters at the Academy have to be employed on the same terms and conditions as the transferring staff? Can terms and conditions inherited from the maintained school be changed after the TUPE? Are academies at risk of equal pay claims, based on comparisons with groups of staff who remain employed by the LA? Pensions issues What are the school s consultation obligations? Do contractors transfer (e.g. cleaning staff e.g. KGB s staff) Insurance Do existing staff of maintained schools TUPE to new academies? Yes. When an existing school converts to an academy, TUPE law will apply and all existing employees at the maintained school will automatically transfer to become employees of the Academy Trust, on their same contractual terms and conditions. The employees who transfer across have special protections, including the right to not be dismissed or have their terms and conditions changed as a result of the transfer. Transfer arrangements do not, however, apply to people who are not employees (e.g. supply staff, self employed peripatetic staff, or consultants.) What exactly will the academy inherit in relation to the transferring staff? The academy will inherit all existing contracts of employment between the transferring employees and the maintained school.

2 The terms and conditions that the academy will have to recognise will also include: Any collective agreements that form part of the employees contracts of employment at the date of transfer, such as the School Teachers Pay and Conditions Document, and the Key National Provisions of the Green Book, which applies to support staff. (Note: the provisions of the Green Book that require schools to conduct local pay reviews and job re-evaluations for support staff are not regarded as contractually binding obligations and therefore do not transfer to the academy); Any HR policies and procedures that are incorporated into the contract of employment (e.g. standard support staff contracts currently incorporate the schools disciplinary, grievance, capability and sickness policies); and Implied contractual terms, such as the equal pay clause. The Academy Trust will also inherit liability for any claims relating to the pre-transfer employment of transferring employees (e.g. disability discrimination, race discrimination, bullying, and harassment, personal injury claims), even if such claims are due to the actions of the maintained school. It is therefore important that the transferor maintained school provides as much information as possible about potential claims (particularly potential equal pay claims pertaining to Single Status). Will academies be bound by subsequent pay increases reached under collective agreements such as the Teachers Pay and Conditions and the Green Book? For support staff Under current law, unless the academy has specifically agreed to abide by subsequent collective pay negotiations, it is likely that the academy will not be bound by subsequent pay awards negotiated with unions. The academy should only be bound by the terms and conditions of the collective agreement at the time of the TUPE transfer, until collective agreement expires, terminates or is replaced. (Note: this law is currently being challenged in the UK Supreme Court so this position may change). For teaching staff Current law suggests that the academy may be bound by subsequent changes to the Teachers Pay and Conditions Document (TPCD) in relation to those staff who have TUPE d from a maintained school, as the TPCD contains statutory conditions of employment (Worrell v Birmingham City Council.) Will new starters at the Academy have to be employed on the same terms and conditions as the transferring staff? No.

3 There is no obligation to engage new teachers on the terms of the TPCD, or support staff on the term of the Green Book. However, if you engage new joiners on less favourable terms and conditions than transferring staff, there is a risk of equal pay claims if it transpires that there are groups of women on lower pay than groups of men performing comparable work. Can terms and conditions inherited from the maintained school be changed after the TUPE? That depends. Any changes to terms and conditions of employment of transferring staff will be void, and dismissals will be automatically unfair, if the sole or principal reason for the change is a reason connected with the transfer. However, it may be possible to make changes to employment terms after a transfer if there is an economic, technical or organisational reason necessitating changes in the workforce (for example, if an Academy school s pupil roll significantly decreased, there would be a genuine need to make redundancies.) Are academies at risk of equal pay claims, based on comparisons with groups of staff who remain employed by the LA? Yes. The Equal Pay Act 1970 implies an equality clause into every contract of employment in the UK, which gives all women the right to be paid at the same rate as men who are doing comparable work for the same employer. In a TUPE situation, the implied equality clause transfers to the new employer. This means that if there was a breach of the equality clause at the date of transfer, the right to have that breach remedied will transfer to the new employer. Current law says that transferring employees can continue to compare themselves to groups of men who are employed by the former employer, the local authority, in order to establish what should have been the correct rate of pay at the date of transfer. Due to complexities in the law, there are two types of equal pay claims a transferring employee may bring against the new employer. Within the first six months after the date of transfer employees may make equal claims against the new employer (the Academy Trust) for up to six years back pay. This is because employees have six months after their employment ends with an employer to bring an equal pay claim. Clearly this period is when academies are most vulnerable to big claims, particularly if Single Status pay evaluations have not been carried out by this time. After the date of transfer claims for ongoing unequal pay that persist with the transferring employee s employment with the academy can be made at any time whist the employee remains employed, and up to six months after termination of employment with the Academy Trust.

4 Example scenario: A school converts to an academy on 1 September 2010, before Single Status job evaluations have been completed. Ten teaching assistants transfer their employment on their existing contracts, under which they are paid at Scale 2. These workers realise that there is a group of predominantly male workers employed by the Council (e.g. refuse workers), who are paid at a higher scale. These workers could theoretically make an equal pay claims against the academy until March 2011, on the basis that they have been paid less than men who perform comparable work for the same employer. The academy is at risk of being held liable for the difference between scale 2 and scale 4 plus bonus, for up to six years per employee. After that six-month period the TAs could still bring claims, but the academy would only be liable for the underpayment from the date their employment with the academy commenced. Both types of claims are made directly against the academy. The local authority has no liability post transfer. Pensions issues Academies are scheduled bodies for the purposes of the Local Government Pension Scheme (Administration) Regulations 2008 (LGPS Regulations), which means that: existing members who transfer to the academy continue to remain in the scheme; the academy has a statutory obligation to enrol new support staff into the scheme (although the employees can later opt out if they so wish); and the academy must comply with LGPS rules to maintain the fund. The DFE s latest guidance dated 10 August 2010 states that if a school is about to convert to academy status, the relevant pension authority should be contacted at the earliest possible stage, for a calculation of the employer contribution rate. Most pension funds are currently managing a deficit. The deficit in respect of pensionable service prior to conversion transfers from the local authority to the academy. The actuarial calculation of the employer contribution rate will take into account the amount needed to pay off any past service deficit and meet future accruals over a specified period, which is normally taken to be 20 years for academies, although it is for the actuary to take a view on this. A further issue for consideration regarding local government pensions is that The LGPS Regulations have recently been amended to clarify that back pay that is payable as a result of equal pay claims is pensionable. Additional pension contributions may therefore need to be made if equal pay claims arise post transfer. It is our understanding that all teaching staff continue to be entitled to membership in the Teacher s Pension Fund.

5 What are the school s consultation obligations? Consultation with appropriate persons The Academies Act 2010 now includes a requirement that, before a maintained school is converted into an academy, the governing body must carry out a consultation on the conversion of the school to an academy. The consultation must be carried out with such persons as the governing body deems appropriate, and must be on the question of whether the school should be converted into an academy. Although there is no strict requirement to consult with the Local Authority, common law may impose an obligation to consult given the long-established principle that the common law will supplement a statutory procedure in order to satisfy the requirements of fairness. Consultation with staff and unions In relation to existing school staff, the governing body will need to conduct a TUPE consultation with all staff and the unions about the transfer and any measures proposed to be taken by the Academy Trust. Although no minimum period for statutory consultation is prescribed under TUPE, sufficient time must be given for staff to consider the proposals and make representations. Do contractors transfer (e.g. cleaning staff e.g. KGB s staff) Schools will need to check their contracts with any third parties (e.g. cleaning or catering companies) to see if there is any requirement that a new employer is bound by the contract in a TUPE situation. If an academy does takes on these service level agreements, the Academy Trust should be mindful that if they wish to de-commission or re-tender the contract at a later date, there is an inherent risk that any workers whose principal purpose was to provide a service to the school will have TUPE rights to the new contractor or the Academy Trust (if the service is being brought in house by the academy). Insurance Schools must insure that adequate insurance cover has been arranged prior to transfer, to take effect from midnight at the date of transfer. Further information Please contact The Learning Trust Legal Team.