CHANGE IN PAY ARRANGEMENTS

Newbie Joined: Jan 12, 2005 Posts: 4 Location: Kent

My company recently merged with another. Through the grapevine it seems that this merger was in fact a takeover. Our contracts of employment are being rewritten to match those issued employed in the new company.

I have been informed in a memo sent with my payslip that our pay arrangements are to changed. At present (under my old company arrangements) I am paid on the last day of the month. In a couple of months time, I have been informed, my pay will be calculated to the last day of the month and the money put in my bank account the following week. that is the end of the first week of the new month.

I will now have to wait 5 weeks between paydays. I have not been given any incentive to agree to this i.e. compensation as I have no choice but to go along with the new scheme, nor was I consulted. My old company still holds a week in hand.

These new arrangements will of course cause financial problems as rent, council tax, loan, etc. are all arranged by direct debit to come out in the week following my old payday. Some of my direct debits can not be rearranged.

Can this be right? What is the legal position on this change of pay arrangements. I have never worked for a company that has this sort of arrangement, nor have any of my collegues or other friends. I would value an opinion or advice or comments on this matter.

Posted: Sat Jan 29, 2005 5:04 am

I am just about to leave the office but will certainly write a much fuller reply on my return.
The first point to I should make is that you are under no obligation to sign a new contract of employment unless your old company has actually terminated your existing employment.

Secondly, unless there is a clause in your existing contract which allows the company to change your contractual terms they cannot change your pay date without consultation.

Newbie Joined: Jan 12, 2005 Posts: 4 Location: Kent

Thank you John. I look forward to your fuller reply when you are able to do so. In the meantime the advice you have given has been most enlightening and I will be checking my existing contract.

I will keep you updated when and if matters change to that in my original posting.

Posted: Mon Jan 31, 2005 12:30 pm

I think I covered most things in my original post.
You may find this additional information usefull;
http://www.dti.gov.uk/er/individual/tupe-pl699.htm

In particular, this paragraph;

Quote:

Transferred employees retain all the rights and obligations existing under their contracts of employment with the previous employer and these are transferred to the new employer, with the exception that the previous employer's rights and obligations relating to benefits for old age, invalidity or survivors under any employees' occupational pension schemes are not transferred. If the new employer does not provide comparable overall terms and conditions, including pension arrangements, it is possible that an employee may have a claim for unfair dismissal, although this has never been tested in the courts.

And this one;

Quote:

Where employees who may be affected by the transfer are represented by an independent trade union recognised for collective bargaining purposes, the employer must inform and consult an authorised official of that union. This may be a shop steward or a district union official or, if appropriate, a national or regional official. The employer is not required to inform and consult any other employee representatives in such circumstances, but may do so voluntarily if desired. A trade union may be recognised for one group of employees, but not for another.

Where employees who may be affected by the transfer are not represented by a trade union as described above, the employer must inform and consult other appropriate representatives of those employees. These may be either existing representatives or new ones specially elected for the purpose. It is the employer's responsibility to ensure that consultation is offered to appropriate representatives. If they are to be existing representatives, their remit and method of election or appointment must give them suitable authority from the employees concerned. It would not, for example, be appropriate to inform and consult a committee specially established to consider the operation of a staff canteen about a transfer affecting, say, sales staff; but it may well be appropriate to inform and consult a fairly elected or appointed committee of employees, such as a works council, that is regularly informed or consulted more generally about the business's financial position and personnel matters. If the representatives are to be specially elected ones, certain election conditions must be met.

I would be happy to go over both contracts for you if you are able to post them to me and I could give you an overview of any significant diferences that might prejudice any exisitng benifts you have in your exisitng contract of employment.

Newbie Joined: Jan 12, 2005 Posts: 4 Location: Kent

Thank you John. Your additional information is most useful. When I get our new contract I will send a copy onto you.

A collegue contacted ACAS and they are of the opinion that although the change in pay arrangements is "shabby" if thats the word it is probably just within the law.

I am trying to contact the Financial director to see if the new company will included our "week in hand" when I joined, in the next pay packet to help bridge the 5 week gap. Will let you know what happens.

Richard

Posted: Sun Feb 06, 2005 6:44 am

Sadly it is unlikely the Financial Director will pay you your week in hand as this would transfer across as well.
If you current contract stipulates the duration of the pay period i.e. weekly, fortnightly etc then your new employer must adhere to that agreement, no if's or buts!
However, an emplyer MAY change terms and conditions of a contract if it can be proved that not doing so would finacially damage the company to the point where it might effect their viability to continue trading - I dont this can be proved in your case even though it would be a nightmare for the company to pay you at a diffrent schedule than everyone else, it should atleast come to some compromise with you.

With the exception of rent, if you are a private tenant rather than a council tenant every direct debit should be flexible enough to allow you to change the pay due date - even those that are unwilling will usually compromise if you explain the situation.

The only real pain is council tax if you are paying this monthly by direct debit as they will not change due dates for love nor money - however, as always, their is a loophole in their system, as their are with most and that is to miss a payment by cancelling the direct debit and then getting it set up again afterwards.

Honorary Member Joined: May 09, 2003 Posts: 45

I agree with all John says. What is not clear from your posting is the length of time you worked for the 'old' company before the transfer. This is a key element in preservation of rights as TUPE is a complex area of law and does not apply as a blanket provision to all.

Additionally it is a good idea to speak to the financial director, ask him to confirm the transfer of the week in hand payment in writing as part of the transfer. I would also point out that under the circumstances you describe you should have been consulted by the 'old' employer as to the nature of the transfer.

As for the new contracts, again you are under no obligation to sign without taking legal advice on the effects. Sounds very sloppy HR/employment law provisions. Worth checking the health and safety and other policies given the 'new' status of the company.

Let me know if you need any help.

Newbie Joined: Jan 12, 2005 Posts: 4 Location: Kent

Dear John & Limeone

Thank you for your replies. They have been most informative. Apologies for not replying sooner, but you know the sort of shifts we work!

The Financial Director has given a verbal answer about the transfer in the matter of the week in hand. It seems this will be transfering across. Nothing in writing yet of course. Secondly, he has offered a loan to all officers who require one payable back at £100 a month. It seems that it is likely to be in the region of a weeks wage. If we require one we have to apply to him again later next month.

It seems strange to be getting a loan on money that is being kept in hand in the first place, but there you are.

I am most interested in the contract input. The new company seems to be dragging its heels a bit in issuing one. My old company contract is incorporated in the Staff Handbook it seems. There we are just told that our wages are paid monthly into our bank account.

I feel it is the lack of consultation that is really upsetting everybody in my old company and the fact that no one is actually answering any questions.

I will keep you updated as the matter progresses.

Posted: Mon Feb 21, 2005 6:34 am

Thanks for the feedback.
Just remember to stick together on issues that affect all of you that have transfered.