Ask the Expert: Practice merger

Q We have been considering merging with another practice so that we can offer a more comprehensive service to patients. I have heard that we need to harmonise all terms and conditions, which the practice is unable to afford. Is this correct?

A The short answer here is no. Terms and conditions can be changed if they are unconnected to the transfer or if there is an economic, technical or organisational (ETO) reason to do so that entails a change in the workforce. ‘Entailing a change in the workforce’ means that any ETO reason also needs to include a change in job function or a reduction in headcount.

The TUPE regulations do not provide a definition of what an ETO reason is, but some examples include:

  1. Economic – a cost saving reason, such as overstaffing
  2. Technical – this could be an increase in computerisation for certain tasks
  3. Organisational – this could be related to the new employer’s location.

TUPE (Transfer of Undertakings (Protection of Employment)) is a very detailed and complex piece of legislation but in reality, it does not need to be that frightening. However, it is essential that any practice faced with a TUPE situation seeks guidance on the process as failure to comply with the information and consultation requirements can lead to the employer paying a maximum of 13 weeks gross pay to each affected employee. This compensation payment is the joint responsibility of the old and the new employers so it is important that any discussions and documents relating to the transfer or service provision change states how liability will be shared.

Practices should note that the notion changes can be made to transferred workers’ contracts after one year comes with the caveat that this can only be done through a collective agreement. Generally speaking, there is no specified time limit to the protection afforded by TUPE.

Another risk for employers in a TUPE situation is that workers with over two years’ service may raise an unfair dismissal claim. The compensation here could be up to a year’s salary per employee. Remember that a dismissal will be automatically unfair if the sole or principal reason for it is the transfer. As explained above, there must be an ETO reason entailing changes in the workforce.

If you have a TUPE situation, contact MDDUS employment law advisers for guidance at advice@mddus.com

A factsheet regarding the basics of the regulations can be accessed by logging in to your MDDUS account and clicking on “employment law resources”.