Redundancy Question in relation to Bespoke Agreement

[TylerD]

Hi all,

I'm hoping someone can help me with some concerns I have - I'll provide some context first and then finish with my questions. I'm grateful to all that take the time to read this and provide me with feedback, as I know how busy life is.

Context:

The company I work for has a contract it delivers in Germany for a UK Client (I'll refer to this as a works contract going forwards) - I work for the company (not the client) on this works contract. My job title specifically reflects the German works contract and I spend 100% of my time on it. However, my employment contract with the company is UK based, i.e. I’m paid in GBP, my T&C’s are all in English and my line manager / place of work is in the UK.

Back in 2016, the works contract was going through a drawdown process to the point where all employees expected it to end in 2018 with the final closure of the estate. To retain staff, the company I work for offered a very generous severance and retention package. Without going into detail, the retention bonus was honoured and I received this over a year ago. In regards to the severance package, the Terms allow for a far more favourable payout than I would receive from a UK statutory redundancy payment. Specifically, the company have to pay me a 6 months notice period plus one months salary for every year of my employment (I’ve been with the company for 14 years so far) - they also have to pay a final redundancy support amount as a lump sum.

I am quite secure that the Terms I’ve signed are robust - one individual was made redundant just over a year ago and he received his full severance package (like me, he was UK based with a UK line manager etc.) so in my mind the precedent has been set. That being said, I do have some concerns, and whilst I’m quite competent with contractual agreements, I do not have a legal degree nor do I have experience in HR matters, so I’m hoping I can obtain some guidance/advice from any experts in these areas.

Questions:

(1) Our client is currently tendering the Germany works contract (as it is no longer ending) - if the company I work for is unsuccessful, I believe I will be afforded the right to TUPE, however, my line manager has already suggested that I may be needed to work on other works contracts within the business soon. They haven’t suggested new Terms to me, but If I work on these other works contracts, am I automatically going to void my current agreement… i.e. could it be argued that I am no longer working 100% on the Germany works contract? Equally, am I going to jeopardise my right to TUPE?

(2) If the business I work for chooses not to tender for the new Germany works contract, or fails to win it, and the company I work for now subsequently offers me a new role with new Terms, would I automatically be made redundant under my current Terms if I refused their offer, or could they argue that I’m making myself unemployed by not accepting and therefore am not being made redundant and thus not eligible for the agreed severance package?

(3) If I do end up moving to another company via TUPE, I understand they would have to honour my existing Terms… or, will the new company have a right to refuse my severance package if they choose to make me redundant seeing as they didn’t agree the Terms initially?

My Thoughts:

I would think that the law should protect me, as I shouldn't be forced to accept new Terms just to relieve a company of their obligation to pay me an agreed sum, nor should any company I TUPE to have the ability to circumvent this agreement regardless of the fact that they were not involved in setting the Terms in question. My fear is (a) that I'm wrong and I'm missing some legal precedent that would mean they could refuse and (b) that if I'm asked to help in other areas of the business then this could void my current agreement (or if I refuse to help in other areas of the business, I could be perhaps fired and then lose all rights).

I hope someone can help alleviate me fears?

Thanks in advance.

[ULA]

Without seeing the agreement I can only base my answers on the information you have provided.

1. What you need to check is whether the terms of the severance and retention package do not just apply for the specific contract and the drawdown process faced in 2016 which I presume was to keep retain staffing levels during the drawdown period and not to have staff leave. If the contract is not successfully retained and you are asked to remain in the company on other contracts it may be that the agreement is no longer enforceable ongoing because it only relates to that specific situation.

2. If another company wins the work then potentially, as you work 100% on the contract it will be a TUPE situation. If your company wants to offer you a position then yes they can be on new terms and you can choose to accept or be TUPE'd across.

3. Under TUPE, all “rights, powers, duties and liabilities under or in connection with” the contract of employment will transfer to the new employer. So it is not just the contract of employment itself that transfers, but also duties and liabilities connected with it. This would include any rights, duties and liabilities found in the employee handbook or any other agreement to the extent that they are incorporated into the employees’ contracts of employment. If this separate agreement is not considered to be incorporated into your contract of employment then potential it would not have to be paid if the new company makes you redundant.

Hope this helps but if you have any further questions just come back to this thread.

[TylerD]

Hi ULA - thank you for the detailed and helpful response.

I would comment as follows:

1. The Preamble makes reference to the ‘agreement’ being ‘entered into in order to secure business continuity for the (works contract) by retaining key staff’ together with ‘providing certainty regarding personal planning and finance for the involved staff’. It also recognises that the employee is in one or more of the group companies and has been ‘seconded’ to the works contract. Further on in the document, there is a clause that states that if the works contract or group company make an alternative offer of employment, and this is accepted by the employee, then the retention bonus will be cancelled (this isn’t an issue for me, as the retention bonus has been paid) - there is no such clause within the severance section.

2. You say that potentially it could be a TUPE situation - can I ask what could prevent it being a TUPE situation? I do know I’ve been included on the TUPE list that was sent to the client prior to the tender documentation being released… does this give me greater security?

3. How would I find out if this agreement is incorporated into my contract of employment? I assumed it was, as it imposes new Terms (a clear example being it’s changed my notice period from 3 months to 6 months)?

I appreciate that I haven’t shared the document, so it’s difficult for you to comment with certainty - I guess what I need is a legal expert to read the agreement and tell me where they feel I stand in regards to TUPE or taking on additional responsibilities outside of my core role… do you have any suggestions / recommendations of such a company or individual?

Once again, thanks for your help.

[ULA]

Thanks for the further information which is really useful.

1. As I suspected the agreement was to "lock staff in" working on the contract and try to ensure they did not leave during the drawdown period and the contract could still be serviced. If there is no clause specifically in relation to the severance section then potentially it falls into what was the purpose and intention of the agreement and the preamble may well be very relevant here. Without seeing it I cannot add any further thoughts on this.

2. Although it is a TUPE situation, if the company that won the contract decided it does not need all of the staff from the current organisation to fulfull the contract, then a redundancy consultation would have to take place with your current company rather than a TUPE transfer. For this not to be unfair there needs to be " an economic, technical or organisation reason entailing changes in the workforce".

3. Sorry but without seeing the documentation it would be hard to make an assessment of whether the agreement potentially forms part of your terms of employment.