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STAFF TRANSFERS UNDER THE TRANSFER OF UNDERTAKINGS (PROTECTION OF EMPLOYMENT) REGULATIONS - FREQUENTLY ASKED QUESTIONS INTRODUCTION This FAQ document provides guidance relating to the initial transfer of MOD civilian employees to a new employer under the TUPE Regulations. It reflects current legislation, policy and best practice. The information provided is applicable to transfer situations generally. It is not possible to cover every issue in detail, and where more information is required on specific situations, this can be provided on a case by case basis. A. TUPE B. ABOUT THE TRANSFER C. PENSIONS D. CONSULTATION AND TRADES UNIONS

MOD PFU – TUPE FAQ Version 1.1 1 Dec 2005

TUPE A1. What is TUPE? TUPE – The Transfer of Undertakings (Protection of Employment) Regulations 1981 – is the UK Government’s enactment of the 1977 European Council Directive No 77/187 - The Acquired Rights Directive. In general terms, where there is a relevant transfer of an undertaking, the employees working in that undertaking transfer to the new employer. TUPE acts to protect the employment terms and conditions of the transferring employees. A2. Are the Regulations updated? Since the Regulations were introduction in 1982 they have been amended to ensure that they continue to comply with the way in which the European Court of Justice (ECJ) has interpreted the Directive. The original regulations have been amended by the Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1987 (SI 442), the Trade Union Reform and Employment Rights Act 1993, the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1995 (SI 1995 No. 2587), the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999 (SI 1925), the Pensions Act 2005 and the Transfer of Employment (Pension Protection) Regulations 2005. Following changes in the EC Directive in 1998, the Government have recently consulted on new draft regulations. It is currently intended that the final version of the new regulations will be available for implementation from April 2006. A3. What is a ‘transfer of undertaking’? The current Directive’s definition of a transfer is:

‘there is a transfer within the meaning of this directive where there is a transfer of an economic entity which retains its identity, meaning an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary.’

A4. When does TUPE have to be considered? The application of TUPE should be considered when an Undertaking or part of an Undertaking is transferred from one employer to another. Some examples of transfers are:

• where all or part of a sole trader's business or partnership is sold or otherwise transferred; • where a company, or part of it, is bought or acquired by another, provided this is done by the

second company buying or acquiring the assets and then running the business and not acquiring the shares only;

• where two companies cease to exist and combine to form a third; • where a contract to provide goods or services is transferred in circumstances which amount to

the transfer of a business or undertaking to a new employer; • transfer of a function from one part of the public sector to another, where there is a change

of employer, (for example, at transfer between the MOD and a National Health Service Trust). The Regulations need to be considered regardless of the number of employees that are assigned to the undertaking that is transferring. They may apply equally to the transfer of a large business with many thousands of employees or to the work performed by a single person. The Regulations are applied to all business sectors - public, private, voluntary and charities.


A5. When does TUPE not have to be considered? The Regulations do not apply to the following:

• transfers by share take-over because, when a company's shares are sold to new shareholders, there is no transfer of the business - the same company continues to be the employer;

• transfers of assets only (for example, the sale of equipment alone would not be covered, but the sale of a going concern including equipment would be covered);

• transfers of a contract to provide goods or services where this does not involve the transfer of a business or part of a business;

• transfers of undertakings situated outside the United Kingdom; • reorganisation and transfers between central government departments and agencies (i.e.

within the Civil Service) as there is no change of employer. A6. What happens if MOD is outsourcing work at its overseas sites? All countries in the European Community have had to implement the 1977 EC Acquired Rights Directive (ARD) (and its subsequent amendments) in to their national legislation. Examples include: Germany - Article 613 of the German Civil Code, Gibraltar – The Employment (Amendment) Ordinance 1999, the Sovereign Base Area, Cyprus Ordinance 8/2001. Differences do occur between the each country’s national legislation due to flexibility in interpreting the Directive. In countries outside the European Community the ARD has no effect. If MOD was transferring work that involved MOD civilians in countries outside the EC it would have to take account of the legislation of the host nation and the employment terms of the civilian employees affected. The wider implications that a decision might have on the host nation also need to be considered. MOD has particular policies relevant to the management of transfers that are situated overseas. Project Teams must consulted with Departmental Policy leads before commencing consideration of any projects that may result in the transfer of any employees. A7. Are there any Government policies that are relevant to a TUPE transfer? The main policies relating to the transfers of Civil Servants are contained in the following documents:

• Staff Transfers in the Public Sector – Statement of Practice (Cabinet Office January 2000) • Fair Deals for Staff Pensions (H.M. Treasury June 1999 and June 2004) • Code of Practice on Workforce Matters (Cabinet Office March 2005)

Additionally, the following policy guidance documents are used for transfers involving MOD civilians:

• Code of Practice for Staff Transfers in MOD Contracts (MOD PFU October 2003) • Commercial Managers Toolkit – TUPE Contract Guidance – (CSG July 2004) • MOD Personnel Manual – Trades Unions Consultation Agreements.

A8. How is it decided that TUPE applies to a transfer? The application of TUPE is a matter of law. The European Court of Justice has identified a number of factors to be taken into account (although not all necessarily have to be present) in deciding whether or not a business has transferred as a going concern:

• The type of undertakings or business in question. • Whether or not the tangible assets of the business (whether fixed or moveable) or the

entitlement to use such assets has been transferred (even if ownership is not). • The value of the intangible assets at the time of the transfer. • Whether the majority of the transferor’s employees are taken over by the transferee. • Whether the customers of the former business are transferred.


• The degree of similarity between the activities carried out before and after the transfer. • The period, if any, for which the activities were suspended.

The above list of factors is often referred to as the ‘Spijker Checklist’. While each case is dependent on its factors assessed against the ‘Spijker Checklist’, broadly speaking TUPE is likely to apply where:

• the new employer employs substantially the same employees to do substantially the same work as before, using the same premises and the same equipment for the work; or

• the new employer is unable to do the work in question without keeping on a group of key employees who can in themselves be regarded as an essential asset; or

• MOD makes it a condition of the contract; or • there is an understanding between the contracting parties that the new employer should use

the same employees for the work; or • where there is a transfer of use of significant tangible or intangible assets.

Although the application of TUPE will always be a matter of law, the Government’s policy is that public sector contracting-out exercises will be normally be conducted on the basis that TUPE should apply, except in situations where there are genuinely exceptional circumstances for it not to. A9. Who decides if TUPE applies? In outsourcing projects, in line with Government policy, MOD will give a view on the application of TUPE in the contracts information issued to companies competing for the contract. Unless there are exceptional circumstances this will normally be that TUPE should apply. Bidders may agree with the MOD’s view or offer an alternative view that takes account of the way they propose to deliver the services required. As the contracting authority MOD may accept a bidder’s proposal that would mean that TUPE did not apply, but there would need to be a robust case to justify that the delivery solution offered better value for money than any other options when all costs had been taken in to account. As the application of TUPE is a matter of law, challenges to its application can be brought by individuals in an Employment Tribunal and pursued (if allowed) through the legal system to the House of Lords and/or the European Courts. A10. What happens if only a smaller percentage of the work that a MOD employee currently does transfers to a contractor? The consequences and impact of the transfer of an Undertaking must be fully assessed by the MOD Business area(s) affected, the Project Team, and line managers, as part of the management of the whole Project. Managers must be able to advise the MOD employees on how they intend to organise and undertake the work that continues to be the responsibility of MOD. For example, this may be by reorganisation, creation of new posts possibly at a different grade, the reduction of posts and the management of any surplus employees that these actions create. There is no policy requirement to re-organise an activity to create a “post” made up of all the % parts of posts and to assign an individual to that post just so some one transfers with the Undertaking. A11. What happens if TUPE does not apply but the work still goes to a contractor? For TUPE not to apply the Bidder’s proposals would have to demonstrate a clear and genuine case either that there was no Undertaking to transfer or the Undertaking would not retain its identity after transfer. If it was decided that the option offered value for money then the work could be transferred but without a transfer of employees . Under the Code of Practice for Staff Transfers in the Public Sector the agreement by a Minister to exemption from the normal policy position of TUPE applying is required. The current MOD employees that undertake the transferring work remain in MOD employment. However MOD may need to apply its normal policies for managing surpluses of employees. MOD may consider the use of the redeployment pool arrangements in the first instance. Alternatively it may


consider it necessary to immediately to apply redundancy procedures. MOD will normally try to avoid or minimise compulsory redundancy if at all possible. There may be genuinely exceptional circumstances where TUPE will not apply, but the MOD as the contracting authority will not tolerate deliberate attempts to avoid TUPE. A12. Will MOD consider seconding employees to a contractor? MOD policy position is that it does not second its civilian employees to a contractor as an alterative to a transfer under TUPE. MOD will only consider relaxing this position when there are exceptional and significant business and operating reasons to do so, and then only when such action is unlikely to be judged as illegal. A13. Does TUPE apply to members of HM Forces working in the undertaking? No, it does not apply to regular members of HM Forces or to reservists serving full time with regulars for a predetermined period in a specific posting. For some contracts MOD may allocate HM Force posts to work with a contractor as an integral part of the delivery of the service requirements. A14. Does TUPE apply to individuals that are ‘Sponsored Reserves’. Yes, as a transferring Undertaking would cover their civilian employment. The requirement to be a Sponsored Reserve will form part of the individual’s employment terms. A15. What protection does TUPE provide? The new employer:

• takes over the “contracts of employment” of all employees who are wholly or mainly employed in the undertaking immediately before the transfer

• cannot pick and choose which employees to take on. • takes over all rights and obligations arising from those contracts of employment, except

criminal liabilities and rights and obligations relating to provisions about benefits for old age, invalidity or survivors in employees' current occupational pension schemes.

• takes over any collective agreements made on behalf of the employees and in force immediately before the transfer

• may not unilaterally worsen the terms and conditions of employment of any transferred employee

• the old and new employers must inform and consult representatives of the employees, • the old and new employers cannot fairly dismiss an employee because of the transfer or a

reason connected with it, unless the reason for the dismissal is an economic, technical or organisational reason entailing changes in the workforce. If there is no such reason, the dismissal will be unfair. If there is such a reason, and it is the cause of the dismissal, the dismissal will be fair provided that the employers act reasonably, for example, by following agreed redundancy procedures.

A16. How does MOD ensure that the new employer observes their obligations under TUPE? The new employer is responsible for ensuring they comply fully with their legal obligations under TUPE. MOD as the employer of the transferring employees ha legal obligations under TUPE and must comply with these. Additionally, the following elements form part of the procurement and delivery phases of contracts where MOD employees are transferred to provide an assurance that their interests are cared for.


• During the procurement process bidders must satisfy MOD that their views on the application of TUPE are soundly based. MOD will receive information explaining how the new employer will apply TUPE to the employment terms and conditions of the transferring employees and to Trades Union recognition and negotiating rights. The information will also explain how future methods of operation may affect employment terms and numbers of employees required. These are described in TUPE as “measures”.

• Prior to the actual transfer, in accordance with TUPE, MOD will provide information to the

MOD Trade Unions representing the transferring employees about the measures the new employer intends to take.

• Once the transfer has taken place, the new employer is legally responsible for meeting all

of the requirements that TUPE place on them and the Government policies that are applied through the terms of the contract issued by MOD.

• The Trades Unions acknowledge that the new employer is responsible for operating the

employment terms and conditions that transfer under TUPE. Negotiations about future terms and conditions of employment are the responsibility of the new employer. As recognition and negotiating rights transfer under TUPE, the Trades Unions will continue to be directly involved in these aspects.

• The Code of Practice for Staff Transfer in MOD Contracts requires that as part of the

normal reporting regime of the contract, the new employer must provide MOD contract monitoring teams with the following information:

o Proposed, agreed or imposed changes to terms and conditions of service in

respect of employees transferred to the contractor under TUPE. o Disputes relating to TUPE compliance that are regarded as unresolved by a

recognised Trades Union. o Any court action or tribunal proceedings relating to TUPE compliance. o Completed court action or tribunal proceedings relating to TUPE compliance. o Any “out of court" settlements relating to TUPE compliance.

• The information provided will be reviewed by the MOD contract monitoring team. If the

report contains issues that may directly or indirectly affect delivery of the services required under the contract the MOD contract-monitoring team may wish to consider with the contractor how the services will be maintained, while respecting the employer/employee relationship that cannot be interfered with.

A17. Could the new employer in some way ‘get around’ or avoid their obligations under TUPE? TUPE is just one regulation in the significant number of Acts of Parliament and Regulations that relate to how an employer can employ individuals. Additionally, cases brought before an Employment Tribunal create case law, (i.e. a legal ruling on how a piece of law should be interpreted or should be applied). If the new employer wants to make changes, for example, in the composition of the transferred workforce, employment terms, or number employed, normally these can only be properly achieved by adherence to the procedures and requirements of the law. Attempting to avoid or “get-round” TUPE would probably result in the new employer not properly complying with the law.


ABOUT THE TRANSFER B1. What are my terms and conditions of employment? The general terms and conditions of employment for Civil Servants are contained in the following: Civil Service Order in Council 1995 (as amended), and Civil Service Code 1996 (as amended) and Civil Service Compensation Scheme rules. MOD employs individuals in a wide range of grades, professions and specialists. In general, the employment terms and conditions of MOD employees are contained in, but not limited to the following documents: An individual’s appointment letter and statement of particulars, subsequent posting notices, MOD Personnel Manuals, Pay Manuals, Travel Manual and Transfer Manuals, national and local collective agreements that are in force in respect of the current employment. Also, changes or additions to employment terms of a temporary nature or early notification of changes to main reference document are published in documents, such as, Personnel Instructions (PIs) and Defence Instructions and Notices (DINs). B2. What happens to my terms and conditions of employment when I transfer? The new employer takes over all rights and obligations arising from those contracts of employment, except criminal liabilities and rights and obligations relating to provisions about benefits for old age, invalidity or survivors in employees' current occupational pension scheme and takes over any collective agreements made on behalf of the employees and in force immediately before the transfer. Essentially this means that current employment terms and conditions are retained. Examples of these include:

• Pay rates and allowances, • Hours (for example - 41/42 hours per week including meal breaks meal) • Leave (for example - an annual leave allowance of 25 or 30 days) • Sick Pay and Sick Leave • Notice Periods • Redundancy compensation • Trades Union Recognition • Collective Agreements (i.e. the terms of an in-year or extended term pay deal, locally agreed

flex-hour agreement) There are some Civil Service employment terms and conditions that cannot transfer in exactly the same form or are inappropriate to transfer to a private sector employer. Bidders are required to put forward their proposals for “replicating” (i.e. that provide comparable terms and conditions so that the substance of the rights and procedures are maintained) the following:

• Pensions – (See section below), • Medical retirements – pensions, medical retirement and appeals procedures, • Redundancy – Procedures for the management of surplus employees and redundancy, • Illness/Injury at Work, • Discipline/Restoring Efficiency and Grievance, • Performance and Development Appraisal, Grading and Promotion, • Welfare - Provision of occupational welfare services or employee assistance scheme, • Equal Opportunities/Diversity, • Professional Qualifications – support available for the attainment of relevant professional

qualifications by employees. • Training and Career Development - Training provision and career development opportunities

for employees. B3. Will my terms and conditions be protected in perpetuity with the new employer or could they be changed at a later date?


In the same way that MOD makes changes to employment terms every year, it is open to a new employer to propose and implement changes to the employment terms of their employees through consultation and negotiation with the employees and their representatives (the recognised Trades Unions). TUPE does not include a set period of time after the transfer date during which the new employer cannot propose new employment terms. TUPE does prevent a new employer from imposing changes that are significant and/or detrimental to the transferred employees current employment terms where the only reason for change is the transfer itself. Where the transferring employment terms include the ability for the employer to alter, amend or withdraw them, these arrangements are available to the new employer to use, in exactly the same way that MOD might have used them before the transfer. B4. Will existing attendance patterns, such as flexible working hours or shift rosters be maintained? Where attendance patterns like flexible working hours or shift rosters are the subject of collective agreements these will transfer under TUPE. However ad-hoc arrangements, for example, a manager that has allowed an employee to arrive late or leave early with compensating adjustments to meal breaks for a few weeks cannot necessarily be considered as transferable employment term. B5. Will there be annual pay awards and performance bonus awards? The arrangements that MOD have in place for increases in pay and determining bonus awards at the time of the transfer will transfer under TUPE. The new employer will need to continue to operate these arrangements until either they time expired and/or a new or revised system has been agreed by the employees and their representatives. Any revised arrangements made by the new employer do not have to be comparable to or reflect any future arrangements that MOD may make for its own employees. B6. I am in receipt of allowances associated with a PPI move (such as Excess Fares Allowance, Additional Housing Cost Allowance, Assisted Mortgage Scheme, etc). Allowances will continue to be paid by the new employer. B7 I have had salary advances, loans, etc where the repayments are recovered each month directly from my salary. Do I have to refund all outstanding monies before I transfer? No. The new employer will continue to recover advances/debts in accordance with the terms and at the rate agreed between MOD and the individual. MOD will make contractual arrangements with the new employer, who will either buy out the total indebtedness of all the transferring employees at the point of transfer (and subsequently keep the sums collected from transferred employees), or alternatively make periodic payments to MOD as monies are collected from transferred employees, until the total of the debts are cleared. B8. I will be on maternity leave when the transfer takes place, do I transfer? Normally a woman is entitled to return to her previous post on exactly the same terms and conditions under which she had previously been working if she returns at the end of 26 weeks’ paid leave. Beyond that she will normally be employed in the same grade and location as before with the same conditioned hours and in any event should be treated for posting and transfer purposes no less favourably than if she had not been absent. If the post that you are in immediately prior to going on maternity leave is amongst those that transfer, then you will transfer to the new employer while on maternity leave and you will return to the post that has transferred. While on maternity leave you will be fully notified of a project’s progress and must receive all information that is made available to other employees and be invited to attend any briefings provided.


B9. I will be on special paid or unpaid leave when the transfer takes place, do I transfer? Special paid or unpaid leave can be granted for a variety of reasons and purposes (too many to list here). This can affect whether an individual is considered to be assigned to an Undertaking and therefore whether they transfer. It is necessary on each occasion to review an individual’s situation against the MOD’s policy and legal position. B10. What happens if the new employer’s existing employees are paid more and have better employment terms and conditions than those of the transferring MOD employees? Nothing, unless following the transfer the new employer wishes to harmonise the employment terms across their workforce. If this is the case any changes would need to be agreed by the employees and their representatives. B11. Do the employment terms of new joiners recruited by the new employer have to match those of the transferred MOD employees? The Code of Practice for Workforce Matters requires that new joiners employed on the contracted work, working alongside TUPE transferred employees, get employment terms that are, overall, no less favourable that those of the transferred employees. Additionally, the new employer is required to provide a pension arrangement, details of which are given in the Code. These arrangements apply to procurements where there is a TUPE transfer of Civil Servants or in the case of the relet of contracts former Civil Servants where the procurement action commenced after 18 March 2005. The Code does not require the new employer to maintain parity between the employment terms of MOD employees and those of the transferred employees and any new joiners after the transfer. B12. What happens if the new employer offers me the option of a new employment contract with different terms to those on which I transferred? There may be a number of reasons why a new employer may take this action. The most likely situation will be if you successfully apply for a different job, possibly a “promotion” in other parts of the employers business. An employment contract is an agreement between 2 parties and can be altered or replaced if both parties agree. It is possible that a transferred employee may be able to rely on their former TUPE employment terms if the new employment terms offered in part, or as a whole, are found to be detrimental. Determining this may only be as a result of action at an Employment Tribunal. Either by individual agreement or as a result of collective negotiations by the TUs, changes in the employment terms of transferred employees may occur over time after the point of transfer. Agreeing to change a single employment term or condition does not affect others (or the TUPE protection attached to them). B13. Is there any way I can be transferred on employment terms that are significantly different from those which I currently have as a Civil Servant? No. B14. What information does MOD give to bidders during the procurement process about the assigned employees? The following general information will be provided:

• The total number of individual employees that currently undertake the work covered by the requirements of the tender that MOD has identified may potentially be transferred.


• The total number of posts or proportion of posts (military and civilian) expressed as a full-time equivalent value, which currently undertake the work covered by the requirements of the tender.

• Preceding 12 months total pay costs - Pay, employee/employer ERNIC and Overtime. • Total redundancy liability. • Additional information about factors influencing staffing levels and costs. (For example where

there is a high level of Territorial Army membership amongst the transferring employees and therefore an increased requirement for special paid or unpaid leave).

This information may be broken down, for example, to show different branches in an establishment or functions, if this helps the information to be understood in comparison to requirements of tender or other information provided for the tender. The following information is provided about the employees that may transfer. This information will not identify an individual employee by name or other unique personal identifier either directly or indirectly. Where it is broken down, for example, to show different branches in an establishment or functions care is taken so that an individual is not inadvertently identifiable.

• Age in years (not date of birth). • Employment Status (i.e. Fixed Term, Casual, Permanent). • Length of current period of continuous employment (in years, months). • Weekly conditioned hours of attendance (gross). • Standard Annual Leave Entitlement (not the “in year” leave total that may contain carry over

or deficit from the previous leave year). • Pension Scheme Membership (For example: PCSPS-Classic, Premium, Partnership, NHS, TSS). • Pension and Redundancy Liability information. • Annual Salary. • Details of any regular overtime commitments (These may be weekly, monthly or annual

commitments for which employees may receive an overtime payment). • Details of attendance patterns that attract enhanced rates of pay or allowances (i.e. shift or

rostered attendance). • Regular and recurring allowances. • Outstanding financial claims arising from employment (i.e. season ticket loans, transfer

grants – noting that these will only give an indication of the type and value of loan balances and that these will change during the bid period.

Bidders are also given access to reference documents, notices, handbooks, instructions, or electronic media that contain information about the current employment terms of MOD employees. B15. What information about me will be given to the new employer before I transfer? When TUPE applies, MOD will provide the information in the table below for each transferring employee following the award of the contract. The information is required by the new employer to transfer the individual properly and to continue to apply correctly the transferred employment terms. The transfer of information can be made within the provisions of the Data Protection Act 1998, without the need for the specific agreement of the individual concerned. Personal, Employment and Career Employee’s full name Date of birth Home address Security Vetting Clearance

Performance Appraisal The current year’s Performance & Development Report (PDR) and Personal Training Plan (PTP)(The employee that is transferring will hold these)

Superannuation and Pay Maternity leave or other long-term leave of absence Annual salary and rates of pay band/grade Shifts, unsociable

Medical Sickness and absence records for the immediately preceding four-year period Details of any active restoring efficiency case for health purposes

Disciplinary Details of any active restoring efficiency case for reasons of performance Details of any active disciplinary cases where corrective action is on going


Job title Work location Conditioned hours of work Employment Status Details of training and operating licensing required for Statutory and Health and Safety reasons Details of training or sponsorship commitments Standard Annual leave entitlement and current leave year entitlement and record Annual leave reckonable service date Details of grievance proceedings where the outcome may have an effect or require action by the new employer. Information of any active legal proceedings between employees and MOD Issue of Uniform/Protective Clothing Working Time Directive opt-out forms Date from which the latest period of continuous employment began.

A copy of the last 2 Performance and Development reports. PDR’s

hours or other premium rates of pay Overtime history for the preceding 12-month period Allowances and bonuses for the preceding 12-month period Details of outstanding loan, advances on salary or debts Bank/building society account details for payroll purposes Tax Code Cumulative pay for tax and pension purposes Cumulative tax paid National Insurance Number National Insurance contribution rate Other payments or deductions being made for statutory reasons Any other voluntary deductions from pay Civil Service Pension Scheme Membership (Opt-out of Civil Service Pension Scheme, Classic, Classic Plus, Premium, Partnership – Stakeholder defined contribution scheme) For pension purposes, the notional reckonable service date Pensionable pay history for 3 years to date of transfer Percentage of any pay currently contributed under additional voluntary contribution arrangements Percentage of pay currently contributed under any added years arrangements


B16. Special adjustments have been made to my workspace because of my disability. Will the new employer be told about these? Due to the Data Protection Act, personal information that it is considered may assist the contractor to more fully understand the circumstances that affect an individual’s employment can only be provided with the positive agreement of the individual employee concerned. Where specialist equipment has been provided, MOD will normally arrange for this to be transferred or loaned to the contractor for the use by the transferring employee. B17. What happens if my personal information has been passed to the new employer but I do not transfer? If an individual who was to have transferred but is subsequently withdrawn and retained in MOD then any information about that individual which had been passed to the new employer will be returned to MOD or the new employer will be required to certify that the information has been as deleted from any of their recording systems. B18. What happens to my personal file? Personal files will be retained by the Department. B19. Will the new contractor be allowed access to my MOD Personal File? The Department's general rules on disclosure will be applied and, other than in the course of a legal action where the contents of the file may be relevant to the issues to be determined in the case or a Court orders its disclosure, nothing will be released without the written consent of the individual concerned. B20. Can I be made redundant as a result of a transfer? Under TUPE employees cannot be fairly dismissed if the transfer is the principal reason for dismissal. However, under TUPE employees can be fairly dismissed for one or more of the following reasons that require a change in the workforce:

• Economic reasons – for example, business has reduced; • Technical reasons – for example, new working methods or technology is introduced which

require fewer employees; • Organisational reasons – for example, a reorganisation takes out a layer of management, or

the way services are delivered or a change in the location where the service is delivered from. These have to be demonstrably essential and, if tested at an Employment Tribunal, an employer would have to show that redundancies were necessary and were applied reasonably. B21. What happens if the new employer is proposing changes in the workforce for economic, technical or organisation reasons? MOD will not make employees redundant in advance of the TUPE transfer, where the new employer proposals include this possible action. Following the transfer, the new employer may take redundancy action under the procedures that will have transferred to them (or their replication of the arrangements). Such actions may include pre-compulsory redundancy measures of identifying alternative employment opportunities elsewhere in the company and calling for volunteers. B22. Would redundancy compensation remain the same as that provided by the Civil Service Compensation Scheme (CSCS)?


TUPE has the effect of protecting the value of redundancy benefits that would be payable to transferred employees under the CSCS. Redundancy benefits are determined by length of service, age and the terms applied to the actual redundancy action. As part of the redundancy “package” some payments due under the PCSPS are brought into early payment. Due to Inland Revenue restrictions it is not currently possible for a contractor replicate all the elements in their pension scheme arrangements as are available under the PCSPS. Therefore, particularly where a transferred employee has chosen to preserve their PCSPS pension benefits (which will only come into payment at Normal Retirement Age) the new employer may have to repackage and include different elements to compensation payment to ensure that overall the transferred employ is no worst or better off than had they received a payment under CSCS and PCSPS. B23. Will MOD ensure that the contractor introduces a comparable redundancy scheme? MOD make it a condition of the service contract that the new employer does pay compensation to the value of which would have been due under the CSCS terms. B24. If I do not want to be transferred, what happens? Where TUPE applies, your employment will automatically be transferred to the new employer. A refusal to transfer may be deemed as a voluntary termination of employment. Under these circumstances you would have no right to redundancy compensation and the question of unfair or constructive dismissal could not arise. B25. I am in a post identified to transfer under TUPE. I don’t want to transfer, can I be placed in the Redeployment Pool or just move to another post in MOD? No – The Redeployment Pool has been introduced to ensure that MOD employees who are without a post or will shortly be without a post are given priority consideration for any suitable vacancies. Where posts are identified as assigned to an Undertaking and may transfer (subject to the outcome of the procurement action) to a new employer, the posts will need to filled up to and beyond the point of transfer, irrespective of the new employer’s intentions post transfer. Therefore the employees in those assigned posts will not be placed in the redeployment pool. B26. Within the business area the work being transferred is currently spread between a number of posts. The same posts are also responsible for work that is not transferring. Do employees transfer or do they stay with MOD? This is a difficult situation to manage and one where care needs to be taken to ensure that any actions taken in respect of employees are transparent and justifiable. Business areas will need to consider the current organisation and the Undertaking as a whole, as well considering the content of individual posts. TUPE refers to individuals being assigned to the Undertaking where they are wholly and mainly involved with the work being transferred. As a very rough guide only ( and not fully defined by case law), it is reasonable to assume that “ wholly or mainly” could be taken to mean the work performed or value of the output of an individual post is more than 50% towards the Undertaking therefore the post should be considered as “assigned”. Conversely where the content of the post work is below 50% towards the Undertaking it should be considered as not “assigned”. Project Teams and Business areas are strongly encouraged not to attempt to try to undertake the assignment of posts where they do not have experience of doing such assessments particularly where superficial consideration suggests that the work content is in the 40% to 60% coverage. MOD has dedicated Legal Advisors who, when given necessary information, will advise on these matters. There are various options for business areas to consider and implement (in consultation with the TUs as necessary) during the procurement process before Vesting Day. These may include reorganisation of the work of actual posts and the creation of new/different posts. The aim of any reorganisation should be to ensure that the work of posts that remains in MOD can continue to be performed and not specifically aimed to place employees in the position of transferring where they had not originally been so. The main means for employees to move to posts that are not affected by the outsourcing


activity will in the future be by JOB applications. There is no policy requirement on MOD business areas requiring them to try to align the current organisation with the way that activities could be undertaken by MOD and the new employer in the even if this does cause a surplus of employees for either MOD or the new employer. B27. Can I continue to apply for Job Opportunity Bulletin vacancies before the TUPE transfer? Yes – Employees are eligible to apply for JOBs up to the date of transfer. However, only where the individual has been interviewed, offered and accepted the advertised JOB prior to the transfer date will they regarded as not transferring. All outstanding applications are cancelled on the date of transfer. B28. What happens to transferred employees if the contract fails? The failure of a contract or contractor is a significant event and, depending on (a) the reasons for the failure and (b) how it is determined to that services should be delivered, in the short or long-term will affect what happens to the employees that the contractor has assigned to the work or services being delivered. It is possible that TUPE would apply if MOD either decided to undertake the work itself, or to place it with a different contractor. In the event that TUPE did not apply then responsibility for the employees would remain with the failed contractor. B29. What happens if the new employer goes into liquidation during the term of the contract? If MOD still requires the work or services to be delivered MOD may decide to either undertake the work itself, or to place it with a different contractor. In this situation TUPE may apply. If the company is taken over by another, there are specific regulations in TUPE that refer to the treatment of employees of a company in liquidation. If the employees are laid off by the company in liquidation then redundancy compensation above statutory levels (which is the responsibility of the DTI’s Insolvency Service) would be a matter between the individual concerned and a Liquidator appointed to manage the insolvency of the company. B30. Would my employment terms be protected if I receive and accept an unsolicited job offer from a bidder? There are a number of points to consider:

• Timing – If the job commences before the date of the TUPE transfer then to take up that new job you will need to have resigned from MOD. If the job will commence after the date of transfer, then provided you remain amongst those assigned to the Undertaking you will transfer under TUPE. Following the transfer, as an employee of the new employer, changes of this sort are a matter between you and your employer.

• Employment terms – Only where you transfer under TUPE would the legal protection given by that legislation apply. If you leave MOD before the transfer date to take up a new job then the employment terms for the new job are a matter only between you and the company making the job offer.

• Business Rules and Acceptance of Appointments – If you have been involved with the projects or the procurement process or have had access to information that would give a new employer a commercial advantage, if you resign from MOD to take up a new job with a bidder/new employer the MOD may impose some restrictions on you involvement on MOD work for a period time.

In any case, you should report any unsolicited job offers to line managers irrespective of whether you intend to act upon them or not.


B31. What relevance does anti discrimination have on a contractor’s ability to carry out the job in hand? Proper treatment of employees is one measure of a good contractor. Sound anti-discriminatory policies lead to a diverse, well motivated workforce, which gives good value for money in terms of reduced turnover. Any organisation that does not operate good employer policies and practices is unlikely to provide an efficient service (particularly over the longer term). B32. Will MOD specify in its tender documents a requirement for contractors to operate an anti discrimination policy? No – New employers have to comply with all UK anti-discrimination legislation. B33. Does this mean that a contractor's policies for anti discrimination will be disregarded when MOD evaluates bids? No - Information about a contractors anti discrimination policies is received as part of their bid information and considered as part of the evaluation process. B34. If discrimination occurs, who is liable? As the direct employer, it is normally the contractor, not the Department or Agency, who will be liable for the acts of discrimination perpetuated by any of its employees in the course of employment. B35. Can I apply for vacancies advertised in the Job Opportunity Bulletin after I TUPE transfer to a contractor? No - the JOB system is internal to MOD and only currently employed civil servants are eligible to apply for vacancies advertised in the bulletin. However, if MOD vacancies were advertised externally then ex-civil servants could apply for re-instatement. B36. If the new employer cuts posts will they have to have Redeployment Pool arrangements like MOD? No. The Redeployment Pool arrangements are internal management arrangement in MOD. A new employer will have their own arrangements to manage surplus employees, ahead of any redundancy action. B37. Can I continue to be a member of organisations like Benenden Healthcare, Civil Service Sports Council and Civil Service Benevolent Fund? Generally the rules of the national organisations will give continuing membership to transferring employees in the same way that they will give membership to individuals that have been Civil Servants at sometime during their employment history. In some instances new employers may choose not to participate in arrangements for subscriptions for these organisations to be deducted from a transferred employee’s salary. In this situation the new employer must notify the transferred employee. However all of the organisations offer individuals several methods to pay subscriptions other than from voluntary payroll deduction so continued membership should be possible. B38. Can I continue to participate in the MOD Lottery? Yes. B39. As a MOD employee I currently use crèche facilities and, for example, can use the Forces Discount Brochure (FDB). Do these transfer under TUPE?


The ability to apply for a place in a MOD crèche or to obtain discounts on products and services contained in the FDB are not employment terms and do not therefore transfer under TUPE. They are social benefits that are derived from being employed by MOD. In respect of using crèche facilities their usage is governed by the MOD arrangements setting them up, which may limit their use to MOD employees only. Where transferring employees currently have children attending a MOD crèche transitional arrangements that need to be made are a matter for local discussion. In respect of the FDB access to this benefit ends on transfer however the new employer may have similar or alterative benefits that it makes available to its employees.


PENSIONS In this document reference is made to the Principal Civil Service Pension Scheme (PCSPS). Some MOD employees are members of other public sec or pension schemes, for example the Teachers Pension Scheme, and Nation Health Service Pension Schemes. The arrangements described for the PCSPS members will normally apply to members of the other public sector schemes.

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C1. Does the new employer have to provide a pension? Provisions in the Pensions Act 2004 and the supporting Transfer of Employment (Pension Protection) Regulations SI 2005/649 which came into effect from the 6th April 2005 ensures that, for the first time by law, transferred employees who had access to occupational pension provision with an employer contribution prior to a transfer must be offered employer pension provision following the transfer. The Pensions Act prescribes a level of protection that must be given to:

• active members of the transferor’s occupational pension scheme; • eligible to be members of a transferor’s occupational pension scheme; or • in a waiting period before becoming eligible to be a member of a transferor employer’s

occupational pension scheme. The new employer can offer transferred employees, as a condition of their contract of employment, membership of either a defined benefit pension scheme that meets a prescribed standard, a defined contribution pension scheme, or a stakeholder pension scheme. Where the scheme offered is a defined contribution or stakeholder arrangement, the new employer must match the employee’s contributions up to a prescribed level, set at 6%. C2. The pension schemes described in the Pension Act are not the same as the PCSPS. I thought any new scheme offered by the new employer had to be comparable? The long standing policy position of Governments has been to require new employers to provide transferring Civil Servant and other public sector workers with “broadly comparable” pension arrangements. The latest Government policy documents on pension provision are Fair Deals for Staff’s Pensions. C3. How will I know that the new scheme is broadly comparable to the PCSPS? The pension schemes that bidders propose to offer to transferring employees will be subjected to rigorous scrutiny and comparison by a professionally qualified actuary working for the Government Actuary's Department (GAD). C4. How is the proposed pension’s comparability assessed? The proposed pension schemes need not be identical to the PCSPS. To be broadly comparable the scheme must satisfy the condition that there would be no identifiable employees who would suffer material detriment overall in terms of their future accrual of pension benefits under that scheme. Amongst many aspects the Actuary will consider:

• The value of the scheme • The value to different types of individual • Level of Contributions • The range of benefits that the new scheme provides • The retirement age and effect on benefits payable • Membership – who is eligible to join • The administration of the scheme


• The type of pension scheme • The adequacy of contributions

(Note: The Government Actuary’s Department statement of practice for the Assessmen of broad comparability of pension rights can be found in the S aff Transfers in the Public Sector – Statement of Practice - Cabinet Office January 2000)

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C5. Do I have to join the new employer’s pension scheme? No – However, a condition of the GAD certification is that membership of the new employer’s scheme is automatic from the day of transfer. Transferring employees do have the option to opt out of the new employer’s scheme by notifying them. Employees that previously had opted out of the PCSPS are also eligible to join the new employer’s scheme. C6. What can I do with the pension I have already accrued under the PCSPS? Currently individuals with accrued pension rights will have the choice of:

• Transferring the value of the accrued benefits into the pension scheme run by the new employer, (provided that at the time of the transfer you have not reached Pensionable Age which for PCSPS is currently age 60) The option to make a transfer under the “Bulk Transfer Terms” is normally only available for a set period of time immediately following the transfer.

• Preserving the accrued benefits in the PCSPS. The preserved pension will be assessed using

final salary information at the point of the TUPE transfer and uprated by price inflation until it comes in to payment at Pensionable Age which for the PCSPS is currently age 60. (This option is only available to employees who have completed 2 or more year’s service).

• Employees that are over Pensionable Age but who have a Normal Retirement Age greater

than age 60, (normally age 65) at the time of the transfer, will not have the option to transfer accrued benefits to the new employer’s pension scheme. At the date of transfer, their PCSPS pension will come in to immediate payment, however receipt of this does not in anyway prevent the employee to continue to work for, and receive a full (unabated) salary from the new employer. Depending on the rules of the new employer’s pension scheme, membership of a pension scheme should be possible.

• Up until the transfer you continue to have the option opting out of the PCSPS and if you wish

transferring the value of the accrued benefits into a personal pension scheme that you chose from the many commercial providers of pensions. Under this option the transfer of accrued benefits will only be on a cash value basis, (i.e. they may not buy the same value of benefits in the new scheme).

C7. What are Bulk Transfer Terms? To transfer the value of accrued benefits from one pension scheme to another involves a payment being made from the current pension scheme to the new pension scheme. Current pension regulations provide a basis for calculating a minimum transfer value where the accrued pension benefits in one pension scheme are transferred to another. These arrangements may not necessarily result in identical credits in the new employer’s scheme, i.e. 1 year reckonable service in the current scheme may be worth less that 1 year in the new scheme. A “bulk transfer agreement” can be made between two pension schemes, that changes the basis for calculating the transfer value and typically will involve the current pension scheme making a higher payment to secure specific credits in the new scheme, i.e. 1 year’s reckonable in the current scheme may be worth 1year or very near 1year in the new scheme. These special arrangements are referred to as “bulk transfer terms”. The option to transfer accrued pension benefits under these better terms will be available to transferring employees only for a short period following the transfer date.


C8. Will MOD provide any advice on what I should do in respect of my PCSPS pension? MOD cannot provide employees individual advice on what to do with their PCSPS pension. However the Project Team will normally arrange for a presentation by either the Government Actuary’s Department or the Scheme Actuary for the PCSPS when the options available to transferring employees will be explained in detail. C9. What happens to pensions when the original contract is re-competed and a different contractor is selected? Under the Government’s policy, “Fair Deals for Staff’s Pensions”, the next new employer is required to continue to provide a pension scheme, assessed as “broadly comparable” to the PCSPS, to the former MOD employees that transferred to the current contractor and are members of that contractor’s “broadly comparable” pension scheme. The policy also requires that where a “bulk transfer” agreement was made for the initial transfer, the current contractor and the next new employer should agree similar terms for the transfer of the accrued pension benefits of the former MOD employees. Normally before a transfer employees will be given a presentation specifically on pension related issues. Additionally following the transfer, transferred employees will receive an “options pack” from MOD (PPPA) which will provide information on the option available in respect of transferring or preserving accrued benefits in the PCSPS. The FAQs above only p ovide r a brief summary of the main issues concerning actions on pensions at the time of the transfer. Employees may need o refer tothe pension scheme rules and guidance material for information on other matters concerning their membership of the pension scheme.

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CONSULTATION AND TRADES UNIONS D1. Does the new employer have to give recognition and negotiating rights to MOD recognised Trade Unions? TU recognition and negotiating rights transfer under TUPE. The general legal position is that following the transfer if the Undertaking maintains an identity distinct from the remainder of the new employer's business, the new employer will be considered to recognise the trade union, in respect of employees transferred, to the same extent that it was recognised by the former employer. If the undertaking does not keep its separate identity, the previous trade union recognition lapses, and it will then be up to the union and the employer to renegotiate recognition. Generally the new employers will continue to give recognition rights to the MOD recognised trade unions. Many of the Trades Unions now have a significant part of their membership working for private sector companies. D2. How and when are the MOD Trades Unions consulted? MOD has specific consultation agreement that cover all forms of outsourcing activity, and these can be found in the Personnel Manual Volume 12. These agreements require the TUs to be formally consulted and provided with specific information during the progress of the procurement. MOD also encourages an informal dialogue to be maintained between the Project Team and TUs to resolve issues of concern through out the procurement process. At the point when the contact is awarded there is a legal requirement under TUPE to inform and consult representatives of the transferring workforce about the transfer. As the employer of the transferring employees MOD must consult with the Trade Unions and inform them of the following long enough before the transfer to enable that consultation to take place:

• The fact that the relevant transfer is to take place, when it is to take place and the reason for it.

• The legal, economic and social implications of the transfer for the employees. • The measures which the employer envisages taking in relation to the employees, or the fact

that no measures will be taken. • If the employer is the transferor, the measures which the prospective employer envisages

taking, following the transfer, in respect of those employees who transfer with the Undertakings.

• The new employer will have given the MOD information necessary for it to perform its consultation requirements under TUPE.

MOD will:

• Consider any representations by the Trade Unions. • Reply to any representations made, and if the representations are rejected, state the reasons

for the rejection. D3. I am not a member of a Trade Union. Will I be able to conduct consultations with the Department on my own behalf? No. The Trade Unions that the Department has recognised to cover various employee grades will be the focal points for consultation. They will conduct on behalf of all employees affected. Information provided to the Trade Unions about the transfer will also be available locally for all employees affected by the transfer to see.


D4. What obligation does the new employer have to replicate the current Whitley system of meetings? Part of the information a potential new employer will provide to MOD will be their intentions and proposals to replicate the arrangements for consultation and communication with the Trades Unions. Any new arrangements should reflect the levels at which consultation takes place in MOD (i.e. not limited to local arrangements). MOD would normally expect the new employer to reach an agreement with the Trades Unions on how best to replicate the arrangement.


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