Lisa Marshall: Rail franchise transfer has safeguards for staff

THE government decision to replace Virgin Trains with FirstGroup to operate the West Coast rail line has been decried by Virgin boss Sir Richard Branson.

But what of the drivers, conductors, stewards and other train staff at Virgin Trains who – if Sir Richard’s reported court challenge fails – face the prospect of their roles going to another company?

The Transfer of Undertakings (Protection of Employment) Regulations 2006, or TUPE, is often thought only to protect employees when the firm they work for changes hands by transferring obligations from the old to the new employer. However, TUPE also applies to a “service provision change” where services transfer from one external contractor to a different external contractor.

Consequently, it would appear that under TUPE those working on West Coast services for Virgin Trains will have their employment transferred to the new company to be set up by FirstGroup with full employment protection rights in place if the transfer satisfies the test of a “service provision change”. The result is that all terms and conditions under the contract of employment will need to be adhered to by FirstGroup. This includes the rights of employees to bring a claim for unfair dismissal, redundancy or discrimination, unpaid wages, bonuses or holidays, etc. One exception is pensions, though the new employer does have to offer a scheme that meets a certain minimum standard. In addition, staff are protected against any detrimental changes to their terms and conditions if the sole reason for theses is the transfer. If a Virgin Trains employee was dismissed and the sole reason given was the transfer, this would be deemed “unfair”.

Employees who refuse to transfer would have no right to remain with the “old” employer and could find themselves without work and without any entitlement to a redundancy payment.

In terms of working conditions, the only change should be that those who transfer will be swapping Virgin’s yellow and red for First’s “Barbie” colour scheme.

What all this may mean for passengers is, of course, a different matter entirely.

• Lisa Marshall is a solicitor at Murray Beith Employment.