Yes vote could prompt ‘transfer objections’ as organisations split
As polls show that the gap between the no and yes campaigns has narrowed ahead of Thursday’s vote, a law expert has warned that a yes vote for Scottish independence could cause TUPE problems for organisations currently spanning the union.
James Lynas, partner at law firm Winckworth Sherwood, told PM that employers like the BBC and Royal Mail, for example, could face problems under TUPE rules in the event of splitting across national borders.
He explained: “Assuming that the BBC splits into a ‘Scottish Broadcasting Corporation (SBC) and the ‘rest of BBC’ (rBBC), the staff who in effect transfer from the rBBC to the SBC would have their rights protected in the normal way. There is a little glitch, every employee who is subject to the TUPE transfer has the right to object.”
Although objections to transfer are usually rare they can be triggered when employees face “a substantial change in their working conditions to their material detriment,” Lynas said.
This would apply to a certain cadre of staff at the broadcaster because these individuals, when employed by the BBC, have a wide range of career options with such a large organisation. However, any Scottish version of the BBC would be considerably smaller with fewer opportunities for promotion.
“If you were at a high level of your career and you suddenly find yourself in the SBC, you can’t move to London because there isn’t a London office to move to anymore,” Lynas said.
“That could be a material change. There will be a certain level of employee in quite a lot of these organisations who will think: ‘My career path has now been completely destroyed.’ They may have planned to move around the country to build up their career but they can’t do that now without having to leave their employer and lose all their accrued rights such as length of service relating to redundancy and pension benefits.”
In addition to this any firms that split between Scotland and the remainder of Britain would also have to decide how to divide up their pension liabilities, which Lynas said “is potentially the largest problem”.
TUPE allows a ‘new’ employer to offer lower pension provisions, however, employers may want to put in a “mirror scheme” to retain employee benefits.
Any negotiations over scheme liabilities will be complex, Lynas said and may well be part of treaty discussions that could take up to 12 to 18 months. However, public authority employers like the Ministry of Defence, will not face the same issues.
Lynas explained: “For most of the public authorities that cross the border, like the MOD, TUPE won’t apply at all because there’s a specific exemption in TUPE for administrative reorganisation of public authority.
“They normally continue with their continuity of service protected because that’s how the crown has arranged it and I expect that is what would happen in relation to organisations like the MOD or the Department for Work and Pensions.”