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Guide to practice mergers: Managing staff through a merger

Practice mergers can create a lot of anxiety for staff. Dee Lynes explains how practices can ease the transition for employees and highlights employment law issues to address.

Staff should feel engaged with the process and have a say in designing their future (Picture: iStock)
Staff should feel engaged with the process and have a say in designing their future (Picture: iStock)

Often when practices decide to merge what really happens is that practice A agrees to acquire practice B. There can be compelling business reasons why this might be the best option for both practices.

Though technically an acquisition, it is still very much a merger in spirit as the two practices come together as equals with a joint say in how the larger practice will operate. I call this situation a ‘merger via acquisition’. It can be a confusing and anxious time for staff.

Here are my top ten tips for handling staff matters during a merger – with some specific issues to beware of if you are involved in a merger via acquisition:

1. Does TUPE apply?

Check whether the Transfer of Undertakings (Protection of Employment) Regulations 2006 - better known as TUPE – are relevant to your transfer. TUPE applies to organisations of all sizes and protects the employment rights of staff transferring to a new employer.

Read the ACAS guide to Handling TUPE Transfers. This is an excellent resource that explains what both the new and old employers’ responsibilities are.

2. Employer liability insurance

If TUPE does apply then both practices should make sure that their employer liability insurance policy covers them for TUPE claims. Some insurers will give you access to a specialist TUPE helpline that can help reduce legal fees significantly but they might not cover you retrospectively so arrange the insurance before you speak formally to staff.

3. Maintain staff morale

Staff morale often falls once a merger is announced. It is important to make sure that staff feel quickly engaged with the process and have a say in designing their future. Take time to plan a co-ordinated information and consultation strategy for both practices. It doesn’t have to be complicated but it does need to ensure that staff receive the right information at the right time and in the right way.

Don’t hide behind emails but have plenty of face-to-face opportunities for staff to share their views about any proposals you make (for example, staff-wide meetings, small staff working groups, site visits to new working locations).

4. Employee representatives

If your merger is a ‘merger by acquisition’ as discussed above, then staff at practice B have a legal right to elect employee representatives to consult about the transfer on their behalf (unless there are fewer than 10 employees overall).

Consider keeping employee representatives in post for a year beyond the transfer date. This will give both transferring staff and yourselves a focus group in which to sort out any problems that may arise. Consider letting affected staff at practice A have a representative group too because there may be changes for them as well.

5. Be open and honest

Be open with staff about the real reasons for merging and whether it is an acquisition or not. If practice A is acquiring practice B then only staff at practice B will be covered by TUPE. Both staff groups will quickly realise that practice B’s staff are being treated differently so be honest about why this is.

If you are in this situation, reassure staff that although the practices have decided to merge via an acquisition it is still very much a merger in spirit and an opportunity to share best practice and build a stronger team.

6. Ensure all HR documentation is up to date before the merger

Practices will need to share information about terms and conditions of employment (e.g. contracts, staff handbooks, job descriptions). Make sure these are up-to-date and don’t forget any implied terms that may have arisen through custom and practice but which might not be written down. You will need this information to help you compare the two practices’ terms and conditions of employment, identify any terms that may be problematic to maintain and then get legal advice about which terms TUPE allows you to change.

Try and avoid imposing a change by reaching agreement with staff through consultation instead. Where there are differences that you cannot change (e.g. pay scales), be open with staff about these. Not all practices can afford to increase benefits so their staff can enjoy the same terms so be honest about this and if you have a long-term plan to address the differences then share this too. Staff might not be happy but they usually understand financial constraints.

7. New organisational structure

Decide what organisational structure and staffing levels the new practice needs and then see how staff and managers from both practices map on to it. Don’t try and design a structure to fit the staff that you have; it invariably won’t give you the future-proof structure that the new practice needs and you could regret it in the long run.

As difficult as it is, don’t rule out redundancies if they are genuinely needed and always consult about any changes to roles.

8. Listen to staff

Practice staff are often very experienced and knowledgeable and will have good ideas about how to do things differently. Listen to them carefully and don’t be afraid to change your mind as a result of what you hear.

9. Encourage staff to work together before the merger

Create opportunities for staff from both practices to work together before the transfer on practical projects, not only will it help you align the two practices’ policies and procedures before the big day but when people meet people it can help alleviate anxiety.

10. Celebrate your new organisation

Mergers generate a huge amount of extra work at a time when staff can feel very anxious about their future. On the day of the transfer take time to celebrate – in whatever small way - what the two teams have achieved. Welcome all staff to the new practice and provide high quality induction sessions to get the new practice off to the best start possible.

Staff issues checklist
  • Make sure you are insured for TUPE claims.
  • Follow the ACAS Guide to Handling TUPE transfers.
  • Coordinate an information and consultation strategy between the practices.
  • Be honest with staff about the reasons for the merger.
  • Listen to staff and involve them in decisions about the new practice.
  • Create opportunities for staff to work together before the transfer day.
  • Remember to celebrate what you have achieved.

Guide to Practice Mergers

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