Our client, Avante Care & Support Limited, are a major regional provider of care homes for elderly and vulnerable adults.
In 2000, Avante acquired a number of care homes from Bexley Council together with their 470 existing staff. As the staff were transferred from one employer to another, their original terms and conditions were protected by the transfer. Such transfers of staff are known as TUPE transfers (TUPE is short for the Transfer of Undertakings (Protection of Employment) Regulations).
By 2014 Avante, like many other care providers reliant on more than 70% of their funding from local authorities, had come under increasing financial strain. In order to continue operating Avante made a number of changes including redundancies at its head office; reductions in its training budget; and the relinquishing of its lease cars amongst other things. However this still left Avante with a shortfall, and the company had to find other ways of reducing costs.
The staff previously employed by Bexley Council were on higher rates of pay compared to the rest of the Avante workforce doing similar roles. The company therefore proposed to reduce their hourly rate of pay by £1 per hour. The employees, advised by their union, did not agree to these changes and claimed that they were being unfairly singled out as ex-employees of Bexley Council with TUPE protected pay rates. As the staff would not agree to the changes they were dismissed, but they nonetheless signed the new contracts under protest.
Some of the staff then brought a claim against Avante on the basis that they had been unfairly dismissed for TUPE reasons i.e. because they were transferred from Bexley Council on favourable terms and conditions.
At the Ashford Employment Tribunal this argument was rejected. The Tribunal agreed that the reason the staff were dismissed was because of the financial difficulties Avante faced, and not because the staff had transferred from Bexley Council on favourable terms and conditions. Avante were motivated in the first instance by making efficiencies, and not in singling out the affected employees. The Tribunal agreed that Avante had made far-reaching efforts to make cost cutting measures across its business, of which the reduction in the staff salaries of those previously employed by Bexley Council was one small element.
This case should provide some comfort to employers who for financial reasons need to adjust wages for those employees who are on TUPE legacy terms and conditions.