GP consortia: Taking over staff from PCTs

The TUPE regulations apply to transfers of PCT employees to the new consortia.

Under TUPE, consortia must inform employee representatives about changes to working arrangements (Photograph: Istock)
Under TUPE, consortia must inform employee representatives about changes to working arrangements (Photograph: Istock)

Commissioning is to shift to GP consortia, as the White Paper proposals stand. However, very few GPs have hands-on experience of commissioning and additional management skills will need to be introduced into the new consortia.

An obvious solution is to employ the local PCT staff who, up to now, have been responsible for commissioning. However, the employment implications of transferring such staff must not be overlooked. Key to this is understanding the Transfer of Undertakings (Protection of Employment) Regulations 2006, known as TUPE.

Impact of TUPE
The effect of TUPE, where there is existing activity being transferred (for example, commissioning or provider activity in a PCT), is to scoop up the employees currently assigned to that activity and deposit them with the new employer while preserving their continuity of employment and contractual terms intact. The new employer receives all the employees - whether or not it wants them.

Under TUPE, consortia will be obliged to inform and consult employee representatives and provide information about employee liabilities and any changes to working arrangements.

Applying the regulations wrongly could result in substantial financial penalties. TUPE applies in an undiscriminating way, binding the current employer and the employer taking over and the employees.

If TUPE applies, employees are in a catch-22 situation. They can object to the transfer, but their objection operates as a resignation, and then they have no right to a redundancy payment from the new or old employer, nor any right to be redeployed.

It is sensible to assume that TUPE regulations will apply in most situations. However, if the current service or activity is fragmenting in several different directions, there is a possibility that TUPE might not apply.

Consortia (and practices) will need to be clear over which specific employees will transfer and should not automatically accept a list of employees provided by the PCT. A series of complicated tests apply to identify which employees do transfer.

Obligations and liabilities
It is worth noting that independent contractors providing services fall outside the protection of TUPE. Also, to be protected by the regulations, the staff must not be assigned on a temporary basis to the undertaking or activity that is transferring. The position of each individual needs to be considered carefully - for example, agency workers and those on career breaks.

The new employer acquires all the accrued liabilities attaching to the transferring staff. These can include employment claims or potential claims, personal injury claims and any collective agreements.

Where a practice or consortium is negotiating to take over an existing activity or contract, it is legally obliged to tell the current employer about any 'measures' it intends to take in relation to the transferring employees.

Such measures include changes in the work location, potential redundancies and any intended workforce reorganisation.

This information must be provided within a specific time frame, and failure to do so carries financial penalties.

The new employer often seeks to harmonise terms and conditions between current and newly acquired transferred staff. Frustratingly, any change is void if the sole or principal reason is the transfer itself. Or it is a reason connected with the transfer which is not an 'economic, technical or organisational' reason entailing workforce changes.

Harmonisation
To harmonise terms and conditions without falling foul of TUPE, new employers generally have to change the numbers or functions of the transferred staff. It may not be possible to alter terms and conditions quickly. If employment contracts are to be revised, the consortium should consider renewing the contracts of all existing and transferring staff.

If incoming staff are on less favourable contract terms than existing staff, this might expose the consortium to equal pay claims. It is advisable to move, over time, towards equality of pay, as citing TUPE as a defence will not work indefinitely.

Having acquired a tranche of staff, the new employer will often decide it does not need all of them. Dismissing employees for a reason connected with the transfer is automatically unfair.

The safest way to deal with post-transfer dismissals is to include the whole, enlarged workforce in the reorganisation exercise.

The Transfer of Employment (Pension Protection) Regulations 2005 brought in new obligations in relation to transferred employees who had actual or contingent rights under an occupational pension scheme - the NHS Pension Scheme, for example - immediately before the transfer.

This is a highly technical area and expert advice is essential. Note that although the new consortia are to be statutory bodies, it is unclear whether they can offer the NHS Pension Scheme.

Finally, an employee who considers that the transfer would be 'a substantial change to their working conditions to their material detriment' might have the equivalent of a constructive dismissal claim.

Whether a 'substantial change' is to the employee's material detriment is considered from the employee's perspective. For example, a change of work location might have implications for childcare, domestic arrangements and travel to work.

TUPE carries significant financial penalties. Practices and consortia are advised to seek early guidance on the potential liabilities and ways of minimising financial risk - and on whether the appointment of the local PCT's staff is necessarily the best option.

  • Jean Sapeta is partner and head of employment at solicitors Hempsons
TUPE points

The new employer:

  • Must accept the transfer of all employees currently assigned to the particular activity or undertaking that is moving.
  • Should note that employing incoming staff on less or more favourable contract terms than existing staff might expose the consortium or practice to equal pay claims.
  • Needs to get expert advice on the highly technical Transfer of Employment (Pension Protection) Regulations 2006.
  • Should be aware that employees considering their transfer to be 'a substantial change to their working conditions to their material detriment' might have the equivalent of a constructive dismissal claim.

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