The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) protect employees when the business or undertaking for which they work transfers to a new employer. TUPE implements the Acquired Rights Directive (2001/23/EC) (ARD) in the UK.
Following responses to a consultation on proposed changes to TUPE, the government has decided to amend the legislation in certain areas to improve its effectiveness and flexibility and to align TUPE more closely with the ARD. The changes are much less extensive than initially anticipated and several key proposals have been abandoned. This article explains the main changes that are likely to be made.
Summary of the changes
On 5 September 2013, the government published its response to the consultation on proposed changes to TUPE.
In summary, the main changes that the government plans to make to TUPE are as follows:
- The rules on service provision changes will remain, but the legislation will clarify that for there to be a TUPE service provision change, the activities carried on after the change in service provision must be “fundamentally or essentially the same” as those carried on before it.
- The requirement to provide employee liability information will be retained, but the information will have to be given 28 days before the transfer, rather than 14 days at present.
- Transferees will be able to change terms derived from collective agreements one year after the transfer, provided that the overall change is no less favourable to the employee.
- Changes in the location of the workforce following a transfer will be expressly included within the scope of an economic, technical or organisational reason entailing changes in the workforce (ETO reason), thereby preventing genuine place of work redundancies from being automatically unfair.
- Regulation 4 (restriction on changes to terms) and regulation 7 (protection against dismissal) will more closely reflect the wording of the ARD and ECJ case law.
- The provisions in regulation 4(9) will not be changed. This enables employees to claim that they have been dismissed where there is a substantial change in working conditions to their material detriment.
- The legislation will not enable transferors to rely on a transferee’s ETO reason to dismiss an employee prior to a transfer (which had previously been suggested).
- The Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) will be amended to clarify that consultation which begins before the transfer can count for the purposes of complying with the collective redundancy rules, provided that the transferor and transferee can agree and the transferee has carried out meaningful consultation.
- Micro businesses will be allowed to inform and consult affected employees directly when there is no recognised independent union, nor any existing appropriate representatives. There will be no requirement to elect representatives in this situation.
- The government guidance on TUPE will be improved.
It is expected that the changes will come into effect in January 2014.