News / Press
August 2012 - Law protects staff in Branson’s West Coast pickle, says Lisa Marshall
The controversial government decision to replace Virgin Trains Limited with FirstGroup plc to operate the West Coast rail line (which affects long distance rail users travelling between both Glasgow and Edinburgh and London), has not unexpectedly been largely dominated by Virgin’s ebullient and flamboyant boss, Sir Richard Branson.
But what of the drivers, conductors, stewards and other train staff at Virgin Trains who – if Sir Richard’s reported court challenge fails - face the prospect of their roles going to another company?
The Transfer of Undertakings (Protection of Employment) Regulations 2006, commonly known as TUPE, is often thought only to protect employees when the firm they work for changes hands by transferring obligations from the old to the new employer. However, TUPE is also designed to apply to a "service provision change" where services transfer from one external contractor to a different external contractor. This affects a wide range of situations, such as if a school catering contract moves from the local authority to a private contractor, that private contractor would likely take over the employment contracts for all of the affected employees, who are solely or mainly engaged in providing the catering services.
Consequently, it would appear that the provisions of TUPE will have the effect that those working on West Coast services for Virgin Trains will have their employment transferred to the new company to be set up by FirstGroup with full employment protection rights in place if the transfer satisfies the test of a “service provision change”, which appears to be the case from what has been reported and indeed, FirstGroup’s website indicates all employees will transfer. The result is that all terms and conditions under the contract of employment (including pay and holidays), statutory rights and continuity of employment will need to be adhered to by FirstGroup in relation to the affected members of staff. This includes the rights of employees to bring a claim for unfair dismissal, redundancy or discrimination, unpaid wages, bonuses or holidays, etc. One exception is pensions, the new employer not being required to provide exactly the same benefits as those offered by the previous employer, although the ‘replacement’ pension scheme does have to meet a certain minimum standard.
In addition, employees are protected against any detrimental changes being made to their terms and conditions if the sole reason for doing so is the transfer and no Virgin Trains employee can be dismissed if the transfer is given as the sole reason; such action would be deemed ‘unfair’ by an employment tribunal. There is, as is often the case, an exception where the employer has an “economic, technical or organisational reason” for the change or dismissal but, on the face of it, the employees’ employment is protected and where there is little to no organisational change in the workforce by the new employer, they may find it hard to find an qualifying reason.
Employees who refuse to transfer are, of course, entitled to do so but taking such action can mean the loss of valuable legal rights, which among other things could affect the value of any redundancy settlement. Further, they would have no right to remain with the “old” employer and could, therefore, find themselves without work and without any entitlement to a redundancy payment.
The bottom line for affected employees is that in terms of working conditions, the only change should be that they will be swapping Virgin‘s yellow and deep red for First’s ‘Barbie’ colour scheme.
What all this may mean for passengers is, of course, a different matter entirely.
Lisa Marshall is a solicitor with Murray Beith Employment
August 2012 - Sarah Chilton: Discretion is best for bosses while Games are on
WHAT attitude should employers take towards staff who are desperate to see live Olympic events during normal working hours?
Unauthorised absence is, of course, a disciplinary offence at any time but in the case of the Olympics the best approach would be for employers to use their discretion; what is appropriate action will always be a matter of degree, depending on the specific circumstances, especially when involving something unique like a “home” Games.
If a request for time off to watch the Olympics proves inconvenient, the employer has every right to refuse.
Anyone watching events live on their computer or mobile phone at work may be breaching their contract of employment or internal IT policies but this might not stand up at a tribunal as a reason for dismissal so an informal warning is likely to be more appropriate.
If, however, a worker has “bad form” (say having taken time off with regard to other sporting events) and has already been formally warned about this, then taking action becomes much easier for an employer, although I still don’t consider that this constitutes gross misconduct.
Had a specific policy been issued for major sporting events the employer could more easily discipline employees who breached it, especially if, say, a reminder had gone out to workers before the Olympics.
Any firm without an IT policy will find it difficult to discipline staff in these circumstances, unless what the employee is viewing is totally inappropriate.
In general, employers would be advised to take a reasonable approach. While there will always be those prepared to push their bosses to the limit, most workers will respond well to being given a little slack and it could, and should, boost workplace morale in the longer term.
For many, the Olympics in Britain soil is a once-in-a-lifetime event and with Team GB including a 50-plus Scottish contingent, it could be argued that a draconian policy may have a negative impact on productivity as employees spend more time round the water cooler complaining about their boss!
• Sarah Chilton is an associate with Murray Beith Employment.