Do directors get TUPED?

[997.1]

I am looking at bidding on an NHS contract and the staff who work for the current contract holder will be TUPED over to the new contract holder. This got me thinking about the directors of the current contract holder. Do they have e TUPE rights? I suspect not because they are office holders but do they have any rights with respect to ongoing employment with new contract holder?

[MustangGT]

With a director you have two different things:

Appointment to office

Contract of employment as an employee.

TUPE may have an effect on the employment contract, but the office appointment is solely with the original company.

[md_ph]

Are you a director with a contract of employment?

[997.1]

I am a director of my own company that I use to do contracting. There’s only me and wife as shareholders. Whilst I’m an office holder and the company bills for my work, I don’t pay myself from this company and rely on separate PAYE income

For this new entity, other shareholders would be current colleagues. We would all have an operational role in the day to day running of the business and would be office holders. Do we need two separate contracts of employment for this?

The operational roles could be done by anyone suitably qualified and experienced so I guess might be subject to TUPE stuff if the contract from the commissioners was not renewed in say ten years? Is this operational role contract separated from the office holder roles by a separate contract or is there a different mechanism?

[MustangGT]

TUPE applies at the point of taking over the workload from the previous company, in simple terms the staff from the previous company would transfer to the new company under the same terms and conditions.

E.g. Company A provides cleaning services for Company Z for a period of time. Company B wins the new tender for the next period of time. The staff of Company A would TUPE over to Company B.

A contract of employment is only applicable to one company, similarly an appointment to an office.

When setting up a new entity you would need new contracts of employment for all employees of the new entity (with reference to TUPE Ts & Cs).

Separately all individuals appointed to an office would need this documented as well, usually appointed by the shareholders. The company Articles of Association should cover this.

None of this need affect the existing documentation you have with your original company.

[997.1]

Thanks

The TUPE arrangements are a stipulation of the commissioners. Any new company winning the contract has to TUPE over the existing employees

And you are saying that they all need a new contract under the company that now has the contract? Makes sense too but presumably there’s not much room to change things?

[MustangGT]

997.1 said:

Thanks

The TUPE arrangements are a stipulation of the commissioners. Any new company winning the contract has to TUPE over the existing employees

And you are saying that they all need a new contract under the company that now has the contract? Makes sense too but presumably there s not much room to change things?

New contracts are required because they are now working for a new company. Terms and Conditions cannot be altered to adversely affect anybody. This is particularly onerous if the employee comes from local government and is on a local government pension scheme. These schemes can require the company to pay up to 25% of salary into them. Number of holidays also has to be honoured etc.