TUPE: Why a People-Focused Approach Can Pay Dividends

Kate Keaney

Kate KeaneyCEO of Connor

Wednesday, November 20, 2019

We live in interesting and challenging times. With business uncertainty caused by external factors such as Brexit, British organizations in particular are finding themselves divesting or relocating.

Article 6 Minutes

This represents an opportunity for businesses looking to grow by acquiring new divisions or entire organizations. And those transactions are likely to result in employees being transferred under TUPE.

If you’re planning an acquisition, a smooth and successful transfer will have obvious benefits for incoming employees, but will also help you maintain the morale of existing employees and ensure that your acquisition is a commercial success. So let’s take a closer look at TUPE —the good, the bad and the ugly — to see how you might go about optimising the process.

What’s up with TUPE?

TUPE regulations have protected transferred employees’ rights in the UK since 1981 (undergoing a major overhaul in 2006). With that in mind, you probably already have a well-established process in place for handling TUPE transfers, but in our experience, this is no guarantee that bringing people into the business under TUPE will be smooth and effective. Get it wrong, and people may choose not to transfer, or resign as soon as they’ve done so. Either way, you’re left with a business arm that isn’t operating as efficiently or effectively as it could be, making the deal your organization has just done less profitable.

It may seem obvious to say you need to make your new employees feel welcome, but in our experience, this part often gets forgotten as the organization focuses on the legal and commercial aspects of the acquisition.

So what can and should HR leaders be doing to maximize the chances of a successful TUPE process? In my mind, the answer is twofold:

  1. Map out and plan for as many potential threats to a successful integration as possible.
  2. To maximize the effectiveness of that activity, find ways of being present much earlier in the wider acquisition conversation.

Anticipate the pitfalls

Your first step, then, is to draw up a list of all the factors that might affect a new employee’s ability to settle in at their new place of work. And it’s worth approaching this task not just from their perspective, but also taking into account the viewpoints of people already at your organization — employees, new line managers and, where appropriate, customers.

Here are some potential issues you might want to consider:

Tension caused by differing terms and conditions

Because TUPE protects the terms of incoming people, you can end up with a disparity in your people’s packages. For example, your TUPE employees may all go home at 3 pm on a Friday while your current employees have to stay until 5 o’clock. Left unaddressed, this could quickly become a source of resentment for your existing employees.

Differing procedures and working practices

Booking leave, payroll, shifts, and so on. Alongside the general confusion of adapting to new systems, changing procedures can have unanticipated consequences. For example, if your TUPE employees were able to clock in and out of work remotely, but now have to be in the office to do so, then employees who may be used to working from home will find they’re no longer able to.

Difficulty protecting terms and conditions in the long term

This used to give TUPE a bad name: people would be promised that their terms were protected, they would transfer, and a week later they would find they were in discussion to change their contracts. Of course, we all know that sometimes the realities of the situation are that it’s just not going to be possible to keep the same terms forever, and you may need to harmonize, but if you’re doing it right away it’s better to be up front and to work with them towards a solution.

Other issues

It’s not always possible to predict what will be an issue. Uniforms, parking spaces, even the view from a person’s desk or distance to the photocopier have been major issues for transferring employees that I’ve seen in my time. Though many of these may seem trivial on the surface, it’s important to remember that they can have a profound effect on the way a person feels about their job. And it’s often these seemingly minor dissatisfactions that can turn into major gripes over time.

Plan ahead

Once you’ve mapped out the potential issues, you may feel as though you’ve opened a can of worms. A little creativity, however, can help you mitigate them. For example, if you know that your new people are used to leaving at 3 pm on a Friday, what could you do to prevent this causing resentment amongst current employees? Could everyone leave at 3, or will you need to say to your new people that this is no longer a standard practice? One way to ease the pain might be to offer all employees a new benefit that they might all value.

It’s also incredibly important to acknowledge the emotional side of the transfer. Small things like making sure meetings take place in a friendly setting and that cakes and drinks are provided at group meetings can go a long way to helping people feel that you care about them, and making them feel welcome.

Get involved in the wider acquisition process

Of course, you can’t plan for changes you don’t know about. That’s why it’s important to overcome the traditional perception that HR doesn’t need to be involved in the commercial aspects of acquisitions, beyond adding new people to the system. Not everything will be relevant, but keeping abreast of developments will help you prepare to deal with the impact of commercial and legal decisions on the workforce. You’ll also be able to jump on unexpected problems as soon as they occur.

I remember once being told I wasn’t needed in meetings relating to an important acquisition because it was “just about money, logistics, furniture and stuff”. I went anyway, and realised that while maybe 60% of it was meaningless to me, the other 40% was really valuable — both in terms of the insights I was able to offer around human factors and risk, and also what I was able to learn and incorporate into the HR team’s plans.

The other stakeholders soon realized that there’s a lot more to HR than payroll and P45s! They saw that HR can be astute, commercially minded and therefore valuable in the wider conversation around acquisitions. And as long as I wasn’t obstructive, I was able to build confidence and trust with other stakeholders that meant HR was much more likely to be represented at top-level discussions in the future.

It’s vital then to get a seat at the table early on in the acquisition process and demonstrate the value of your insights. Not only will the acquisition and TUPE go to plan and prove to be profitable, but the value of HR to the wider organization will be beyond doubt.

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