Response to consultation on TUPE published
The Government has published its response to the Consultation on the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE Regulations) and with this, an indication of proposed changes which are expected to come into force in the New Year.
The Government has published its response to the Consultation on the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE Regulations) and with this, an indication of proposed changes which are expected to come into force in the New Year.
The Consultation came after the Government had promised to review the legislation which many consider to be overly bureaucratic.
A summary of the main proposed changes include:
- Service Provision Changes – the “service provision change” definition (i.e. where services are outsourced or outsourced services are brought back in-house) has not been removed, as many had expected. The Regulations will be amended however to clarify that, for a service provision change to have taken place, activities carried on after the service provision change must be “fundamentally or essentially the same” as those carried on before it;
- Employee Liability Information – the time limit for the transferor to provide employee liability information has been increased from 14 to 28 days;
- Post-transfer dimissals – under the TUPE (www.practicallaw.com/8-107-7424) Regulations, a dismissal for a reason connected with a transfer of a business will be an automatically unfair dismissal (www.practicallaw.com/4-200-3033) unless the employer can show that the dismissal took place for an economic, technical or organisational reason entailing changes in the workforce (ETO Reason). The Government has now indicated that changes to the workforce’s location following a transfer can now amount to an ETO Reason;
- Direct consultation – micro businesses will be allowed to consult with their employees directly where there is no recognised union or existing appropriate representatives. Currently, it is not clear how small a micro business is, but this Government has previously used the term when referring to businesses with less than ten employees;
- Collective Agreements – renegotiation of terms which transfer from collective agreements one year after the transfer will be allowed, provided the changes are no less favourable to employees.
These changes do not go as far as many commentators expected, most notably the decision to retain the “service provision” definition which the Government had initially suggested it would repeal. In practice, the guidance on the service provision point is not likely to provide employers with much more clarity and could invite further litigation on the issue in the Employment Tribunal.
BIS has indicated that the changes are likely to come into force in January 2014. We will of course provide you with further updates as they arise.
The full consultation response can be read here.