We reported in our 18 September 2013 blog ‘Government Rethink on TUPE changes’ on the Government’s publication of its response on the TUPE consultation. The resultant draft Regulations setting out the changes in the rules on TUPE transfers and associated rules on collective redundancy consultation have now been published.
The draft Regulations will be placed before Parliament in December and will come into force from January 2014.
Some key changes proposed to take effect from when the Regulations come into force are:
1. With the agreement of the transferor (the seller) the transferee (the buyer) can commence collective redundancy consultation pre transfer, providing that one or more of the transferring employees may be affected by the proposed dismissals or measures taken in connection with them.
2. Confirmation that in order for there to be a “service provision change” (e.g. a contracting out) the activities carried out by the provider that wins the contract must be fundamentally the same as those carried out by the provider that loses the contract. The more similar the activities the more likely it is that there will be a service provision change.
3. Removing the distinction between changes to contractual terms and dismissals made “by reason of the transfer itself” (which are presently void or automatically unfair) and those that are made “for a reason connected with the transfer” (which are presently capable of justification where the employer can show an Economic, Technical or Organisational Reason for making the changes that entails a change in the workforce (“an ETO reason”)). The reason for this change is that it was felt the wording ‘connected to’ was too wide and its meaning uncertain. Under the new Regulations the focus will be on whether the employer can show an ETO reason.
4. A change in an employee’s workplace can amount to an ETO reason capable of justifying dismissal, which is consistent with the ordinary rules of unfair dismissal.
5. Although collective agreements can transfer, transferees are not bound to implement changes to terms governed by those collective agreements where such changes are agreed post transfer and they have not been a party to the negotiations giving rise to those changes (i.e. confirming that collective agreements have a “static effect”)
Changes in force three months after the Regulations:
6. Employee Liability Information will be provided by the current to the new employer no later than 28 days pre transfer (currently this is 14 days) or, as before, if special circumstances make this not reasonably practicable, as soon as reasonably practicable thereafter.
Changes in force six months after the Regulations:
7. Micro businesses with fewer than 10 employees, at the time they are obliged to give TUPE information, can consult and inform affected employees directly where there are no appropriate representatives of a recognised trade union or elected employee representatives.
It seems as though the Government has restricted the changes to a few which largely codify recent case law decisions and others which should make a useful, practical difference to employers trying to navigate TUPE. As with all new legislation, however, it will take time to see what problems will arise.
If you would like any further information please contact us.