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UPDATED: PDA begins legal process in ex-Lloydspharmacy staff employment row

The Pharmacists’ Defence Association (PDA) has launched early conciliation on behalf of pharmacists formerly employed by Lloydspharmacy, the union has announced today.

The PDA said today (September 11) that employers “may not have undertaken” the consultative steps required under the Transfer of Undertakings (Protection of Employment) regulations – known as TUPE.

The pharmacists’ union said that some of its members had reported “changes to working practices” following the sales of pharmacies in the Lloydspharmacy estate in which they work. 

According to “expert legal opinion” obtained by the PDA, the transfers of the pharmacies to new owners “should have come under the protection of TUPE”. 

Read more: PDA issues advice as Lloydspharmacy moves ahead with divestment process

The PDA said that it has started a “legal process to protect the interest of its members” with the government’s Advisory, Conciliation and Arbitration Service (ACAS) against Lloydspharmacy, 63 subsidiary companies created by the multiple and 22 unnamed buyers of the Lloydspharmacy estate.

C+D has approached Lloydspharmacy for comment.

 

Share sales

 

 

The union claimed that Lloydspharmacy has sold some of its branches using share sales rather than asset sales – the “normal mechanism of disposal”.

 

It said that the multiple had set up “a series of newly created subsidiary companies”, transferred pharmacies and employees to these subsidiaries and then sold the subsidiaries to new owners.

 

Read more: Ex-Sainsbury’s Lloydspharmacy workers head to court over redundancy benefits

 

In an asset sale, TUPE regulations are used to “protect and preserve employees’ rights if the business that employs them changes hands and its identity”, according to the PDA.

 

These regulations require the new and original owners to consult with employees and “any recognised trade union”, it said.

 

The PDA added that Lloydspharmacy and new owners of its branches could avoid TUPE in share sales via subsidiaries as “there should be no change in the identity” of the pharmacies. 

 

Read more: ‘Hugely disappointed’: Lloydspharmacy rejects Sainsbury’s redundancy appeal

 

But according to the PDA’s general secretary Mark Pitt, the union has heard from some former Lloydspharmacy employees that “reporting lines, salary arrangements, supply chains, SOPs, and much more have all changed”.

 

Mr Pitt said that this signalled to the union that “a transfer that should have been protected by TUPE may have already occurred”.

 

 

“Early conciliation”

 

 

The PDA said that it has “commenced early conciliation involving 86 pharmacy companies to protect the interests of former Lloydspharmacy pharmacists”.

 

Under the process, ACAS talks to both parties to try to resolve a dispute but if unsuccessful, “claims may be lodged in the employment tribunal”, it added.

 

Read more: Lloydspharmacy branch numbers dropped almost 50% in nine months

 

If an employer “either deliberately or in error” fails to consult individually or collectively through a recognised trade union where a TUPE transfer occurs, an employment tribunal “can award up to 13 weeks of gross pay as compensation to affected employees”, it said.

 

This action is the “first steps” in the legal process and follows legal advice that the “changes to working practices being reported by some members mean the transfers that have occurred should already have come under the protection of TUPE”, it added.

 

 

Early warning system

 

 

In May, C+D reported that the PDA had flagged that some of its members had learned that the Lloydspharmacy branches they worked for were being “divested as part of a share sale”.

 

C+D identified dozens of newly created subsidiaries set up by Lloydspharmacy and each registered as a “dispensing chemist in specialised stores”, named LP SD One up to LP SD Fifty-Three, and LP North One up to LP North Twenty-Five.

 

Read more: Lloydspharmacy 'named and shamed' in government minimum wage probe

Since that story was published, more subsidiaries have been created and some have changed ownership, according to Companies House records. 

 

Lloydspharmacy declined to clarify in May whether these new vehicles would be used to sell the pharmacies in the divestment programme highlighted by the PDA. 

 

 

Selling season

 

 

C+D has also reported on a large number of Lloydspharmacy branch sales this year. 

 

Rumours were swirling that all Lloydspharmacy’s UK branches were allegedly “at risk of closure” as part of a strategic review of the business and in April, after months of speculation surrounding the future of its estate, Lloydspharmacy clarified its position, for the first time announcing that it was “selectively selling” some of its branches.

 

Most recently, C+D reported that Dears Pharmacy is set to acquire 12 branches from Lloydspharmacy, while Well Pharmacy also snapped up 11 Scotland branches from the multiple last month.

 

 

Enhanced redundancy row

 

 

Meanwhile, the PDA announced in July that it would be leading another set of ex-Lloydspharmacy employees to court as “almost 100” former workers in Sainsbury’s stores seek access to enhanced redundancy benefits. 

 

The multiple announced in January that it would be withdrawing pharmacy services from Sainsbury’s stores, which it had bought in 2015 for £125 million, in a C+D exclusive. And by June, after months of speculation and uncertainty, the multiple had closed all of its 237 stores in Sainsbury’s supermarkets for good, first revealed by C+D.

 

Read more: UPDATED: Lloydspharmacy ‘selectively selling’ branches to independent buyers

 

In May, the multiple had rejected these workers’ claims in an internal grievance process, telling them that the Sainsbury’s redundancy policy, from which the workers believed that they had a right to enhanced redundancy, “did not form part of their terms and conditions of employment”.

 

The PDA, representing these workers, lodged an internal appeal, but this too was quashed in June, when Lloydspharmacy reiterated that it would provide statutory benefits to workers that would be made redundant.

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