Supplementary memorandum submitted by
Post Office Ltd (POS 4C)
POST OFFICE NOTE ON TUPE
THE CONTEXT
The Crown Office network as it stood before
the current partnership WHSmith was losing more than £1 million
every week—losses that simply cannot be sustained and which
threaten Post Office Ltd's ability to provide flagship branches
in the UK's towns and cities. The current strategy gives Post
Office Ltd the opportunity to put these branches on a stable financial
basis and to work with a single, high quality, committed retail
partner, rather than the more piecemeal approach which the company
had previously adopted.
Throughout the implementation of this part of
our transformation Post Office Ltd has been extremely aware of
the implications for our people, and we are exceptionally pleased
that we have continued to avoid compulsory redundancy and have
been able to accommodate the wishes of our people, whether their
preference has been to leave the company to take up an alternative
role.
POST OFFICE
LTD AND
TUPE
Post Office Ltd's approach to the implications
of TUPE for the conversion and franchise programme has been consistent,
fully compliant with the law and very openly shared and discussed
with the Trade Unions since the mid 1990's when the CWU successfully
argued that a conversion was a transfer of undertaking and that
it was entitled to be informed and consulted pursuant to TUPE.
In the more than ten years since, 273 offices
have been franchised affecting approximately 3,800 employees.
The union has always been consulted and Post Office Ltd has always
met the requirements of the legislation. No challenge to that
approach has been mounted by the CWU until now.
The CWU's argument is not that employees have
been transferred into the employment of WHSmith due to the operation
of TUPE but that there has been a failure to comply with the information
and consultation obligations. The reference to the compromise
agreement signed by employees taking voluntary redundancy is,
in this respect, a separate issue to that of TUPE, as the operation
of TUPE is a matter of law that cannot be avoided.
The purpose of TUPE (and the Acquired Rights
Directive from which it is derived) is relatively straightforward.
It is to ensure that employees caught up in the transfer of the
business between owners can continue in employment on the same
terms as before. Prior to TUPE, employees would automatically
be dismissed. That is why TUPE transfers the employment only of
employees whose contracts of employment would "otherwise
be terminated" by the transfer.
This is where Post Office Ltd's approach to
employees affected by a conversion is fundamentally different.
No employee's contract of employment is terminated by the transfer.
Everyone has been redeployed to other suitable employment in accordance
with their contractual terms, unless they wish to apply for voluntary
redundancy. Thus the need to protect them by the transfer of employment
provisions in TUPE need not, and does not arise.
Notwithstanding that, the information and consultation
obligations of TUPE do still arise (as there is a transfer of
an undertaking happening even if no employees are going with it).
Post Office Ltd has more than complied with those requirements
and are vigorously defending the proceedings currently brought
by the CWU.
Further, Post Office Ltd has been careful to
try to explain its position to the affected employees along with
the implications for them personally. Consequently there has been
a full communications process running alongside the information
and consultation exercise with the CWU. As part of that process
no employee has been informed of a right to transfer simply because
such a right does not arise on the facts. (Some of the employees
who accept voluntary redundancy may then choose to take up employment
with our partner—WHSmith in this case—but that is
independent of TUPE and they enter into a new contract of employment
on different terms, in most instances having already received
a redundancy payment from Post Office Ltd).
4 March 2008
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